Labor’s multimillion-dollar rescue won’t stop the rot
Beyond the debate about whether we should provide aid to foreign companies, there is a larger question about whether the federal government will be involved in these bailouts.
Left without outside assistance, these struggling smelters would almost certainly be closed. (Alcoa recently confirmed the permanent closure of its Western Australia Kwinana Alumina Refinery.)
A turbocharged Australian dollar and high costs sent Australia’s car manufacturing to its doom in 2013.
The facilities, while critical domestically, are not globally competitive and this should be reasonable grounds to close them. Sometimes it’s better for governments to use a little tough love, which is exactly what happened in 2013 when the Abbott government refused to continue supporting the Australian car manufacturing industry.
A turbocharged Australian dollar and high costs have sent automakers to their doom. In the provinces, sky-high energy prices pose an existential threat to extremely energy-intensive facilities.
A failure in government energy policy is a major cause of this situation, and while there are measures in place to ensure our major LNG producers put aside sufficient supply for the domestic market, decades of ideological warfare over renewable energy have further hindered the creation of a comprehensive and workable roadmap.
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So it’s no surprise that Bluescope, which led a consortium to buy Whyalla, has now cited gas cost issues in its negotiations with the government.
Bluescope chief executive Mark Vassella told a press club briefing on Wednesday that the government should push for a cut in gas prices to prevent factories from closing. “Australian manufacturing is at a dangerous crossroads,” he said.
Meanwhile, the federal government appears to be on a barrel as the closure of sites such as Glencore’s Mount Isa Copper Refinery threatens the push of critical minerals into global supply chains, a key part of Australia’s Labour’s “Future Made in Australia” industry policy.
This is fertile ground for wealthy companies with financially strapped Australian refineries to pick at taxpayers’ pockets when necessary.
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