Why we need to nationalise the steel industry

Thousands of jobs are once against at risk in Australia's shrinking steel industry as Arrium, the company that owns the steelworks in Whyalla, South Australia, announced it was having difficulty servicing its more than $2 billion loan. The company wants the government to bail it out and that seems to be the only “solution” that the union movement and the major parties can imagine.

But will a bailout save jobs or even save what is left of the steel industry in Australia? The historical record suggests otherwise.

Despite hundreds of millions of dollars in government bailouts, jobs have continually been lost in the steel industry over the past three decades. In the 1980s there were 11,400 steelworkers in Newcastle — now there are just a handful. On the NSW south coast, the industry employed about 23,000 workers at the beginning of the 1980s.

The Hawke Labor government's 1983–1988 “Steel Industry Plan” subsidised steel companies by $500 million over five years and yet more than 30,000 jobs have been lost in the industry in the IIlawarra and Newcastle since the late 1970s.

In 2011, BlueScope Steel — one of the restructured companies to emerge from the Steel Industry Plan — restructured once again. The result was employment in the steel industry in the Illawarra, already down from 23,000 to 3000 jobs, was slashed by another thousand. BlueScope happily took a $100 million bailout while paying $3 million in bonuses to its executives!

The same happened when the automotive industry was gievn $30 billion in public subsidies between 1997 and 2012. Were jobs saved in the end? No. That industry has all but vanished in Australia now, while the massive state-subsidised profits the handful of multinational car corporations made have been siphoned out.

Rather than repeat this mistake, any government that seriously wants to save jobs and the steel industry should nationalise the steel industry and run it as a publicly-owned service in the interests of the people and the environment.

Over the next few decades, our society is going to have to make a massive investment in the infrastructure needed to shift to a renewables-based economy. Hundreds of billions of dollars need to be spent on building rail, public transport vehicles and renewable energy systems that harness solar, wind and wave power instead of fossil fuels.

A steel industry will be needed to supply materials for this transition.

History has taught us that the profit-driven corporations are not going to make this switch and, blinkered by the short-term solution of importing cheaper steel from overseas, the market will destroy what steel-making capacity there is left in this country.

[Sue Bull is the Socialist Alliance candidate for the seat of Corio in Victoria. Click here to like the Socialist Alliance Geelong FB page.]