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Category: Government and Politics / States and Territories / Federal Government / Federal Parliament / Steel

Arrium support needed before Xenophon supports budget repairs

Thursday, 18 Aug 2016 04:50:23

Nick Xenophon and his team plan to overhaul government procurement laws. (ABC News: Nick Harmsen)

South Australian senator Nick Xenophon will not support the Federal Government's "budget repair measures" unless the future of steelmaker Arrium and the future of jobs in the state is "dealt with appropriately".

Key points:

  • Arrium was taken over by an administrator after struggling with $4.3 billion debt
  • Senator Nick Xenophon says if Arrium goes under welfare costs will spike
  • He said the administrator had asked for $300 million

The Nick Xenophon Team (NXT) leader said the Government needed to give the city of Whyalla, the home of the struggling steelworks, and the state certainty about the future of manufacturing in Australia.

SA continues to have the highest unemployment rate in the nation with more job losses on the way when Holden closes its site in Adelaide's northern suburbs in 2017.

Meanwhile, 6,000 jobs are in the balance after administrator KordaMentha took over Arrium earlier this year as the steelworks struggled with a debt of about $4.3 billion.

During the federal election campaign the Coalition promised to lend $42.9 million to the steelworks to upgrade machinery to help make the company attractive to potential buyers.

Senator Xenophon said if Arrium was to collapse it would signal the end of structural steelmaking in Australia and potentially affect thousands of flow-on jobs.

He said the administrator had asked for $300 million, in either loans or grants, which was "not unreasonable".

"The alternative, if Arrium falls over, is an environmental clean-up bill the State Government will need to meet that could total $150 million, a welfare bill in the region of $100 million per annum, a collapse in tax receipts in the region," he said.

He said the party, which has three senators and one MP, would push for reforms to the Commonwealth procurement laws to take into account social and economic impacts of buying local goods.

"I cannot in good conscience, support any of the Government's budget repair measures until the issue of the future of Arrium, and the future of thousands of jobs that will be affected by the closure of Holden as a car marker is dealt with appropriately by the Government.

"You cannot have a credible budget repair strategy if you will blow the budget on a spike of welfare costs and plummeting tax receipts by abandoning key parts of our manufacturing sector."

Prime Minister Malcolm Turnbull used his first keynote speech since the election to challenge the Federal Opposition to support more than $6.5 billion in budget savings.

AustraliaPlus


 

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