Daniel Wills: Steeled for an ugly brawl

PARTISAN games have been put aside, as self-interest unites politicians on all sides. Aside from fears for up to 10,000 workers, both the state and federal governments stand to suffer significantly from an Arrium collapse.

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PARTISAN games have been put aside, as self-interest unites politicians on all sides.

Aside from the clear and genuine concern for up to 10,000 workers linked to Arrium’s Whyalla steelworks, both the state and federal governments stand to suffer significantly from a collapse.

The Federal Government is headed to an election in three months’ time in a state that is already the most hostile territory for the Coalition in the nation. As many as four Liberal seats can be considered in play as it faces a threat from independent Senator Nick Xenophon in both houses.

Much like the seemingly impossible situation Arrium now finds itself in, the Coalition in SA is dealing with the legacy of past decisions which simply can’t be undone as reckoning looms.

The exit of the car industry next year threatens to further devastate a state which already has the nation’s highest unemployment. Labor has successfully convinced SA this was an active choice from the Coalition in its first year of power, when it refused to sign a blank cheque.

Former prime minister Tony Abbott and ex-treasurer Joe Hockey did their state colleagues no favours by accusing Holden of duplicity and proudly declaring the end of corporate welfare.

The Coalition accusations that SA couldn’t build a canoe, and two-year game of hide-and-seek over submarines, entrenched a view that maps in Canberra show nothing west of Broken Hill.

The collapse of Whyalla’s steelworks would be a withering third strike, and likely land on Federal Industry Minister Christopher Pyne as he battles to hold his own seat of Sturt.

It could also resonate in parts of the country where the mining boom has collapsed and there are serious fears for the viability of existing industry and government vision for the future.

It is clear the Coalition, at times a slow learner, has heard this message loud and clear.

Arrium’s OneSteel plant at Whyalla. Picture: Campbell Brodie.

Mr Pyne is reassuring Whyalla workers that Prime Minister Malcolm Turnbull is pulling for them and he has done everything in his power to crack down on cheap Chinese steel.

He appears to be leaving open the option of some financial support on top of that.

On the state side, Premier Jay Weatherill and Treasurer Tom Koutsantonis have what can modestly be described as a full-blown economic, human and jobs crisis on their hands.

Cars, subs, steel and a sustained period of high taxes and slow growth have combined into a toxic cocktail which already has dole queues, bread lines and joblessness growing.

The full impact of each is yet to be felt, and will become apparent at the next state election in 2018 as a then-16-year-old Labor State Government will be trying to win its fifth term.

Make no mistake, the current crisis in Whyalla is as big as that in Elizabeth.

The main difference is that the steelworks could be shuttered within months, while Holden workers have been given years of notice and the chance of as soft a landing as possible.

Such a catastrophe would destroy lives, as houses in Whyalla became valueless. Combined with Leigh Creek, Labor could be blamed for standing by as two towns are wiped from the map.

SA voters are beyond sick of the blame game. It’s possible they will hold each government, of different colours, equally accountable for the state’s failures in two different polls.

This need to be seen to be doing something could produce desperate measures.

Mr Koutsantonis is publicly bullish about putting money on the table. He talks of old infrastructure and Arrium’s hulking debt as structural problems that need addressing.

A Federal Government which declared the end of the age of entitlement may face a choice between ideological purity and self-preservation, and be reluctantly convinced to pony up.

This is where the refreshing image of bipartisanship will end. If the steelworks closes, before an expected federal election on July 2, there will be bitter political recriminations.

No one wants to be seen to be rocking the boat now, for fear of accusations they are undermining a rescue. If it can’t be saved, each side will make the other pay a huge price.