Subjects: Regional Development Fund for Upper Spencer Gulf


ROWAN RAMSEY: …announcing a jobs package for Whyalla and the upper Spencer Gulf and I’ll Simon put some meat on that bone in a minute for you about how that is going to work and this programme. It is a $20 million jobs programme investing in industry in the upper Spencer Gulf with a focus on Whyalla and look, I’m particularly pleased which comes on the back of the announcement last week of the $49.2 million immediate loan through to Arrium which is exactly what the administrator asked for and I think the message to the people of Whyalla is that the steel industry in Whyalla, that Whyalla is here for the long haul and the Federal Government believes in Whyalla and is investing in Whyalla in a big way and we are making sure that this industry survives and not only survives, is re-equipped and flourishes in the future and steel will be in Whyalla and will be in Australia for a long, long time to come, it is very important to our future and I’m so pleased to have Simon here with me this morning and the backing of the Federal Government. Our Phones have been running hot over quite a period of time about the issues surrounding Whyalla and I have had first rate attention and so I’m very pleased for that and I’m pleased for the people of Whyalla because now I think it is safe to go back water, you should feel good about the city, it’s here for the long haul.

SIMON BIRMINGHAM: Thanks so much, Rowan. Every single aspect of the Turnbull Government’s economic plan is focussed on how we can sustain and grow job opportunities right around Australia. Over the weekend at our national campaign rally, the Prime Minister announced a new $200 million regional jobs and investment fund and that fund compliments our other policy initiatives. Our tax changes that are designed to make investment more attractive, our export trade arrangements that are designed to make it more appealing and easier for Australian business to get their products in to global markets, every step of our reforms and plans are about ensuring growth and jobs occurs across the economy and the regional jobs and investment fund is designed to ensure that no area of Australia is left behind in the transition of the Australian economy and today I’m delighted to be here with Rowan announcing that of that $200 million fund, we will be establishing a $20 million upper Spencer Gulf regional jobs and investment fund which will ensure that this region, Whyalla, Port Augusta, Port Pirie, these communities get the support they need to create new jobs and new business opportunities in the future. This local fund will be driven by local decision makers, we will establish a local committee who will oversee the development of a business plan to identify the business opportunities that exist in the upper Spencer Gulf, more investment for infrastructure for training that will make the type of difference to leverage the $20 million in to at least $40 million of spending with extra support from businesses, local government or other co-investors. So, importantly what we have here is support that comes on top of the actions the Turnbull Government is already taking to support especially, the Whyalla region and, as Rowan mentioned, the $49 million for the new beneficiation facilities that will back in Arrium and make sure that they have the type of cash flow and growth in cash flow and revenue that the administrators have identified as being the most critical step we can take to ensure the future of that business as well as decisions we’ve taken in terms of stronger anti-dumping measures, bringing forward of work on the Tarcoola rail line; all of these measures designed to make sure that we back this region. Today, a further $20 million investment to support the economic transformation of this area, which will see three different areas of activity considered. Firstly, investment by businesses that can be brought forward or will be additional investment that will allow them to grow, create new opportunities to employ more people. Secondly, infrastructure investments in the area that similarly enable businesses to grow as a result of the infrastructure create more jobs and thirdly, training, skilling of individuals that can similarly help businesses to grow and to create more jobs. All of this is about sustaining and growing jobs across the upper Spencer Gulf in to the future and this is a $20 million commitment that comes on top of an overall economic plan designed to back this region and regions right across Australia.

QUESTION: Will this job package have a focus on diversifying industry in the area?

BIRMINGHAM: Well we want to back the industries and the jobs that will make the biggest differences which is why we will establish a local committee of business leaders and community leaders who will make the business plan and develop a business plan to identify how we can get the best bang for our buck out of the $20 million. We will require that it be at least matched dollar for dollar by additional investment, turning that $20 million investment in to $40 million worth of investment and hopefully, more like $60-80 million of investment. It of course, will then be up to those decision makers locally to determine whether it’s diversification or whether it’s backing the growth of existing businesses if they’ve got the most compelling plans to create new jobs.

QUESTION: Have you secured the dollar for dollar support yet?

BIRMINGHAM: Well we want to analyse and assess exactly what the best projects are to invest in. So, we go in to this wanting to back the local community, we’ll make sure that that local committee is established as soon as possible after the election, the business plan developed as fast as possible and decisions then made to make sure that the money then flows in to the projects that can make the best difference for jobs generation.

QUESTION: Are there any projects on the table yet? Have there been any projects discussed?

RAMSEY: Well no, there hasn’t John, but I mean this is quite important, it is one of the reasons we’re here this morning with Stephen Young because already we’ve talked about some possible ideas and we’re very thankful that also the Mayor Tom Antonio is with us here as well so, thanks for being here this morning. But I think what is important is that as soon as we get the election out of the way, we’ll establish this small working group so we can, so people can bring those ideas forward to us. People say “why don’t you create a heap of jobs?” and I say “alright, we’ll put 100 jobs in. We’ll have 50 people dropping papers off and 50 people picking them up if you like” it is not governments that actually decide what the good ideas are on the ground, it is the people that are here already, the people that are operating businesses like Stephen, they know where those business opportunities are. We’ve had a cup of coffee with him this morning and he’ll probably tell you in a moment about how they could spend some money on the automation of the welding of the towers for the wind farms so, that’s the kind of edge, that technological edge that makes you competitive back within those world markets. So, that’s why we’re here this morning and that’s the kind of ideas that we’ve brought forward to the committee and we will try and pick, it’s a very small group, but we’ll try and come up with the best answers.

QUESTION: There have been calls for the Federal Government to do more to help Arrium, is that something you’re hearing from your constituents?

RAMSEY: Look, I’ve got to say that what the Federal Government has done so far has been outstanding and I’m not dead sure that the general public have got the gist of it. The reason that we went with the $49.2 million loan is because that’s what the administrator asked and it can flow immediately after the election and within 9-10 months it is estimated that the bottom line for the company will be improved by around $45 million a year. Now, it is around about the break even point now and that is the quickest turn around on money. Now, if it were to be a gift and sits on the table waiting for a new owner, we’re talking about maybe a 8-10 month period before a new owner is identified and then a negotiating process and then some of the things that need to be done in the plant have a 2, 3, 4 years timeline so, it is going to be a long time before those benefits start to flow. By putting this money on the table immediately in the form of a loan, it can go to the administrator, the money can be spent and we can start to turn the dollars in that 8-9 month period which is the best answer, it is the best answer to Arrium and, as Simon touched on, some of the things we’ve done already particularly around anti-dumping where there has been a significant, Arrium have been able to increase their price of steel by around about 25% on the back of what the government has done on anti-dumping. It is a very significant contribution so by and large we are doing what we’re asked to do and so Mark Mentha is the expert and Mr Campman has been in there for the government and they both agree that this is the best thing to spend the money on and it is the fastest way to get things happening so I think once people understand what it is exactly what the Federal Government is doing, they will be very pleased.

BIRMINGHAM: Can I just say that Rowan Ramsey has been an incredibly powerful advocate around the issue of Arrium, but also a very thoughtful one in terms of backing the types of policy measures and responses that can make the most difference to ensure the future of this business here in Whyalla and the jobs that are in Whyalla. Of course, todays announcement is about looking beyond just the needs of Arrium and ensuring we support other businesses locally which equally, Rowan has identified and recognised as being critical to give confidence to the region and ensure that people see this as a place to invest and where the Turnbull Government will back good, strong, wise investments to create jobs in the future.

QUESTION: Is it possible to project how many jobs Whyalla might stand to benefit from specifically?

BIRMINGHAM: We’ll be looking to back the projects that can generate the most jobs. That will be the number one criteria out of the assessments of how to spend this $20 million most wisely. How do we leverage extra investment from it? From that guaranteed certainty for jobs in the region in the future and it is about complimenting our measures in Arrium to keep it going and strong, complimenting our national economic plan to help businesses right around Australia to be more efficient through targeted local investment to get the best bang for our buck.

QUESTION: Do you have a hope or an aim of a figure though that you’d like to see created from the fund?

BIRMINGHAM: We hope, in terms of co-investment, that we will require at least dollar for dollar co-investment that we hope that we can get $2 or $3 for every $1 that the Federal Government invests. In terms of job numbers, we’ll be assessing the options and getting locals to assess the options to tell us what will generate the greatest number of jobs and what can get the best bang for buck in terms of Federal Government spending.

QUESTION: There is no loose figure at this point?

BIRMINGHAM: Well, as many as we can get and certainly we are looking to back in and guarantee existing levels and grow that in the future and get that confidence that this is a great place to invest and Australia will be a better place to invest, lower business tax rates, lower investment tax rates, lower income tax rates than there would be under the Labor party and that what regions like this need most of all is certainty, security that economic plans like this can be delivered by a government with a strong focus on jobs.

QUESTION: Can I just ask one more question before you guys move out, is today’s announcement motivated at all by the threat of the Nick Xenophon Team in the seat of Grey?

RAMSEY: Look, from my point of view the issue with the steel industry here in Whyalla has been bubbling on for a long time and I’ve been having long ongoing discussions with Arrium, but it didn’t come to a head until the day that Arrium ceased trading because then we had a private company out there that has amassed over $4 billion worth of debt all or their own, they’ve done that pretty well really, and so at that point is when the possibility of some kind of assistance coming from state or federal level really coming to the pointy end so, I think it is just the time frame. It is what it is, that’s when the industry came to this sort of brick wall and said something has to happen here, this company is going in to the hands of the administrators. I think everything changed that day and it has been actioned pretty much ever since that time. That timeframe couldn’t be altered, it is what it is.

BIRMINGHAM: I’ll happily add that as I said, this is part of a national $200 million jobs and growth fund for the regions and we’ve identified that it’s really important to acknowledge that some regions in Australia are doing it tougher than others and that we give extra support for investment in those regions and this is one of those regions. So, it is nothing to do with the politics of any particular region and everything to do with the economic transformation that those regions are facing and the upper Spencer Gulf is a region that has been doing it tough and has particular transformation challenges and we want to support that and we have been supporting it, we’re putting $20 million extra on the table for additional support to other businesses in this region.

QUESTION: So the timing in the week before an election is just a coincidence?

BIRMINGHAM: We’ve been working on an economic plan for a long period of time and we’ve been outlining different pieces of that right through this election campaign and this is really the icing on the cake for the region that needs it the most.

STEPHEN YOUNG: I’ve looked at this package, it will give companies like ours an opportunity to transform and to be part of the future. Whyalla does face a crisis, the crisis is that unless One Steel changes, evolves and becomes efficient, it will close. So, it needs to change and as it changes, businesses like ours that historically have supported One Steel, need to change as well. Changing costs capital and, as you’ve observed, we’re struggling and to have the Federal Government to assist us in changing will be very important to enable that process.

TOM ANTONIO: The Coalition has done a terrific job in providing the opportunity to modernise their equipment and their plant which will create jobs and I’m very, very happy about the announcement and I’ve worked very well with Rowan and his government to bring these sorts of things forward and I thank both Rowan and Simon for making this happen.