Friday, March 9, 2018

Today by Paddy Manning

Pub test: Trump’s steel tariffs
There’s not too many steelworkers left at Port Kembla, exemption or no

Image: Paddy Manning

You can’t believe everything you hear in a pub, of course, but at least one retired steelworker, trying to have a quiet drink at the Port Kembla Hotel, has only bad news about the local arm of BlueScope Steel, Trump tariff or no Trump tariff. “It’s dead,” he says of the Wollongong steelworks. “In a few years’ time, it’ll be gone.”

At lunchtime there aren’t many steelworkers drinking in either the Port Kembla or the Commercial Hotel next door; presumably they’re working. “In the old days we used to go back pissed,” the bloke says.

Outside, Wentworth Street, the main drag, has lots of empty and boarded-up shops, and the main pub – the old Steelworks Hotel – closed a couple years ago and has been sold to the Anglican Church, who use it for social housing. Even in Port Kembla, housing’s unaffordable.

It’s surprisingly downbeat given the dollar has fallen way back in recent years, which helped exporters like BlueScope; the carbon tax that was going to destroy them has been removed (with no drop in electricity prices, I’ll bet), its debt has been restructured after a near-death experience post-financial crisis, and the share price is back off the floor. The truth is, BlueScope, spun out of BHP in 2002, is no longer so dependent on the Illawarra.

“Aren’t they making [the steel] somewhere else?” says the barwoman. It’s true: BlueScope’s business now is about a third domestic (all based in Port Kembla), a third in the US and a third in Asia. A helpful sharemarket analyst tells me there is zero expectation the Port Kembla steelworks will shut, and that output volumes have been pretty good lately – about three million tonnes a year, although it used to be double that. It’s a while since he’s been down here, he admits, but given the forecast infrastructure spending on the eastern seaboard, the outlook for BlueScope’s domestic steel business is “quite good”. He reckons BlueScope can withstand a tariff: its US business will simply pass on any price increases. The bank rates BlueScope a “buy” right now.

You have to come here to appreciate the scale of the steelworks: a proper factory, smokestacks belching away, a site that goes for kilometres, the inner and outer harbour, an actual heavy rail line around it with stations built for a workforce that has dropped by an order of magnitude in one generation. But like much of our heavy industry the steelworks’ heyday was postwar – behind Menzies and McEwen’s high tariff walls, of course – and it looks like a ’50s relic now, even if bits of it have been painted blue.

That will not stop the furious lobbying on behalf of Australian steel: although Australia was not exempted in today’s announcement, the US president has given us a fortnight to make our case and the signs are that Donald Trump will honour the commitment he gave last year to exempt Australia. Meanwhile, BlueScope chief Mark Vassella has backed federal Labor’s push to toughen trade rules and triple penalties for dumping cheap overseas steel into the country.

Trade war? Who could be bothered. The trade war against cheap imported or dumped Chinese steel has been lost – in Port Kembla, they even used imported steel to upgrade the local footy ground, WIN Stadium, literally within sight of the steelworks – and there is no Australian Trump equivalent in sight who would put the tariff wall back up. Don’t talk to them about Chinese steel at the Commercial Hotel. They hate the stuff. The roof of the WIN stadium  blew down on a windy day. One bloke, Scotty Woods, who did his apprenticeship as a boilermaker at the original steelworks in 1980, says you can take a plate of Chinese steel the size of a table, drill into it,  and in one spot it’ll be soft as butter, and in another it’ll blunten the drill. “Bluescope Steel is the best quality steel in the world,” he says. 

The steelworks might be quiet now, the barwoman tells me, but “not if there’s a war, then they’ll need it, for defence.” Unfortunately for Port Kembla the Donald seems to have solved that problem as well, given a meeting is now planned between him and “Rocket Man”, North Korean President Kim Jong-un. If they were leaning towards Trumpism down here, they might be changing their minds.

since this morning

Former prime minister Paul Keating has said Donald Trump is “surprisingly” good at foreign policy, after the US president confirmed that he would meet Kim Jong-un after pledge to halt missile and nuclear tests.

The AFR reports [$] that former Australian Tax Office deputy commissioner Michael Cranston, whose son and daughter are implicated in large-scale tax fraud, will stand trial for several weeks in January next year.

The Age reports that two separate and fresh leaks by disgruntled Greens about the alleged conduct of their candidate for the federal seat of Batman, Alex Bhathal, have forced the campaign onto the defensive again.

in case you missed it

New South Wales and Victoria have signed up to the federal government’s child abuse redress scheme, with compensation for victims capped at $150,000. The bill is expected to reach hundreds of millions of dollars.

The Guardian reports that a landmark court case in the Northern Territory seeks to overturn a major land-clearing approval based on its impacts on climate change, in what is believed to be an Australian first. After a challenge filed by the Nature Conservation Council, the NSW Land and Environment Court has ruled invalid laws that make land clearing in the state easier.

The ABC reports that the NSW government will prosecute several people over alleged water theft on the Barwon-Darling, eight months after Four Corners investigated the issue.

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Paddy Manning

Paddy Manning is a contributing editor (politics) at The Monthly. He is a writer and journalist who has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including Boganaire: The rise and fall of Nathan Tinkler.

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