Future of Steel Production at Whyalla Raises Issues about the Nature of Australian Independence

Ned K.

The future of steel production at Whyalla in South Australia is uncertain with Arrium being in administration and governments at state and federal levels looking for a bail out that will delay big job losses past the next election cycle.

Some of the blame for the situation in Whyalla has been pointed at steel producers in China who are accused of flooding the country with "cheap steel". There are cries from various spokespersons of industry and governments that China should slow down production of steel to give smaller operations like Arrium in Whyalla a chance to compete for their share of the steel market.

However the more the Chinese corporations cut back in production the less iron ore they buy from Australia and the more job losses in mining in Australia. Over the last couple of years, big business interests connected to the mining and resources sector were calling for the Chinese economy to keep expanding at a growth rate of 8% or more per annum and warned of dire consequences for Australia's exports if the Chinese economy slowed.

Leaders from both the Liberal and Labor Governments at both federal and state levels support free trade agreements and cannot give any assurances about steel orders for the steel works in Whyalla.

The situation will get worse next year when the car industry shuts down. The car industry is one of the biggest users of steel after the construction industry.

The whole situation also has a distinctly anti-China flavour as the ABC Radio reported last week that of all imported steel in to Australia, the amount coming from China amounted to only 16%! 

The report said that the biggest exporter of steel to Australia by far is Japan.

The likely outcome of the crisis of steel workers at Arrium in Whyalla is that the place will shut altogether or continue on as a smaller operation in the short term.

For Australia as a whole, the crisis in Whyalla raises questions about the Australian government's relationship with China at a time when contradictions between China and US imperialism are intensifying. The situation in Whyalla is a microcosm of all the competing self- interests within the ruling class.

The commitment of government to “free trade agreements” means that generally speaking manufacturing workers in Australia lose out. Whyalla is likely to be no exception.

Longer term when the Australian people led by the working class (the big majority of the employable population) win an independent country they will be the ones who decide what is made here and what is imported from overseas, based on trade and investment to the mutual benefit of the nations concerned, rather than being based on trade agreements that favour multinational corporations.