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Local steel’s real value flows through wider economy


The ASI supports the sentiments of the current campaigns to maximise local steel on the Baird Government’s big infrastructure plans, but is concerned its broader value has been overshadowed in the debate. The Institute’s Chief Executive, Tony Dixon said that apart from the desirability of preserving jobs and skills, the short-termism of Governments dominated by the electoral cycles and contractors too focussed on upfront costs ignores the multifarious advantages of using local steel. He said that an independent report by AEC for the Industry Capability Network found that for every $1 million of local manufacturing, over $700k of gross value added is generated, six full-time jobs are created or retained, and over $200k of overall tax revenue is generated, which is consistent with the latest report on the industry undertaken by the University of Wollongong. “What we seek is full, fair and reasonable access for the local supply chain that is ready and more than capable to compete on a level playing field for major project works,” he said. “Australian steel supply is also more flexible to design changes and is usually supplied on a Just in Time (JIT) basis without the vagueness and uncertainty of the global priorities of offshore suppliers or shipping schedules. And whilst upfront payment is often required for the imported option, the local value chain provides guaranteed, insured payment terms.” The Australian steel industry recently created the nation’s first third party certification scheme covering fabricated structural steelwork which bolsters the material certification scheme covering steel milled in Australia. “This lowers exposure for project proponents from financial and safety risks associated with expensive and time consuming structural failures and their rectification,” Mr Dixon said. “That is besides that fact that local jobs generate payroll tax for State governments, training and apprenticeship opportunities and deliver social benefits from engaging local industry.” “The NSW Government should look at the more structured approach to Industry Participation Policy of Victoria where both sides of politics went to the latest election supporting the approach which includes ‘strategic projects’ where Government can stipulate levels of local content in a project or specific sectors or specific items,” he said. “It’s reasonable to expect that the benefits from using taxpayer dollars funding major development projects flow back to the community. “And a sector that employs over 130,000 Australians is too important to ignore.”

Posted On: 11 Aug 2015


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