An in-depth study conducted by the National Institute of Economic and Industry Research (NIEIR) for the ASI proposes a budget-neutral approach to bolstering activity in Australian regions not benefiting directly from the current resources boom.

The report, to be officially launched at a steel fabrication facility in Melbourne’s west on 18 August (today), found most construction activity occurring in only about five percent of Australia’s local government areas. Separate figures from the ASI indicate that Australian steel content in the construction of major resource projects is between 10 to 12 percent with the majority of the balance being imported from Asia.

Steel businesses are operating at below capacity, skilled workers are underemployed, apprenticeships are at an all-time low and employment is falling. An opportunity exists to better utilise the existing capacity and maintain skills and capital that will be of vital importance after the resources boom.

The Report’s recommendations are aimed at “fully utilising capacity (people and capital) in regions that are disadvantaged by circumstances created by the resources boom but currently only benefiting marginally from the boom” (i.e. those caught in the ‘slow-lane’ of the two speed economy).

It proposes that the steel industry workforce of those under-utilised areas of Australia could be more fully engaged through resource project proponents being offered tax relief for using local skills and existing plant capability and capacity. This can be made cost-neutral to the mining industry through tax relief.

“As capacity constraints are absent in these regions there is no threat of inflation,” the Report said.

Though there is a revenue cost to the Commonwealth budget, the study finds this can be made good through the taxes generated by increased levels of net national product (budget-neutral) - to say nothing of increased employment and incomes.

The core message from the Report is that unless premature plant closures are stopped by the domestic manufacturing obtaining greater benefit from current mining activity, then the net medium term benefits to Australian residents once the current boom subsides is likely to be low, the point being that these industries and skills need support now to survive to be utilised into the future.

The ASI is advocating the value of engaging the local steel industry to ensure existing skills and recent substantial investment in plant and equipment is not jeopardised by the two-speed economy.

The ASI is the nation’s peak industry body representing the entire steel supply chain.

A full copy of the report can be downloaded from ASI’s website:

Further details, contact ASI National Manager – Industry Development, Ian Cairns

Tel: 0417 426 002 or Email: