The Australian Steel Institute (ASI) has welcomed the recognition by the Federal Government of the precarious position of steel manufacturing in the Australian economy and the impact that the price on carbon would have on the future viability of the industry.

“The ASI is still opposed to the imposition of a carbon price on Australian steel manufacturing in the absence of one of our international competitors,” ASI Chief Executive Don McDonald said.

“We acknowledge the $300 million package that has been announced by the Prime Minister as transitional support to Australian steel manufacturing.”

However, Mr McDonald said that only one part of the whole steel industry will receive this support.

“The Steel Transformation Plan (STP) will be directed to the two companies which make steel in Australia. There will be no transitional support for the steel fabricators, roll formers, galvanisers, distributors and other ‘downstream’ sectors of the industry, all of which will face increased costs in the form of higher electricity, gas and transport costs in an already heavily trade exposed environment,” Mr McDonald said.

“It should be understood however that another major concern for most in the steel channel is the lack of demand and especially the lack of work flowing from the resource boom,” he said.

The ASI will continue to push for Government action to address the low rate of Australian content in the development of new resource projects in Australia.

“The vast majority of companies in the steel industry in Australia need Federal Government action in terms of leadership and policy to help them secure a greater share of the work in building these new resource projects,” Mr McDonald said.

“We are currently winning less than 10 percent of the steelwork in these new developments.

“Australian fabrication plants and engineering services are largely locked out of many of the jobs and investment that is being made and there is little return for Australian manufacturing from these large scale resource projects.

“Now that the carbon pricing package has been announced, the ASI would urge the Government to focus on working with the steel industry to find policy solutions to address this massive imbalance and ensure that Australian manufacturers win a greater share of this work.”