PM Turnbull ‘abandoning’ SA if Coalition refuses Arrium rescue package: Nick Xenophon

turnbull 24india news

The Prime Minister’s lack of a rescue package for Arrium is proof it plans to abandon South Australia’s manufacturing industry, Senator Nick Xenophon says.

It follows an announcement today by the Federal Opposition that it would provide Whyalla steelmakerArrium with a $100 million lifeline if it is elected.

“There’s no shortage of Sydney and Canberra-based political and economic commentators who think South Australian manufacturing should be abandoned,” Mr Xenophon said.

“And that seems a view widely held in the Coalition Government.”

Prime Minister Malcolm Turnbull said the mix of loans and grants offered by Federal Labor to support Arrium showed little understanding of the challenges faced by the company.

He said Arrium went into administration largely as the result of poor management.

“Is he proposing to subsidise a sale to a foreign buyer? It’s hard to tell.”

Arrium’s administrator, KordaMentha, has previously said it needed more than $100 million to upgrade facilities at the Whyalla steelworks and mining operations.

“This is a real shot in the arm for the spirit of employees, the business and the community of Whyalla,” administrator Mark Mentha said of Labor’s commitment.

He said administrators also had been in “active engagement with the federal Coalition”.

Earlier this month, Mr Turnbull wrote to Mr Weatherill advising the Federal Government could “assist the purchaser” of Arrium apply for a loan of “up to $100 million” through EFIC and the Clean Energy Finance Corporation.

Mr Xenophon called on the Federal Government to release details of the requests made by Arrium to ensure its future.

The steelmaker is responsible for the employment of about 5,000 people in SA and is the single largest employer in Whyalla.

The regional town is expected to be devastated should the site close down.

Arrium ‘set to turn a profit’

Federal Industry Minister Christopher Pyne questioned why public funds were needed to prop up the steelworks when it could be on the verge of turning a profit.

He was referring to remarks by KordaMentha that hundreds of millions of dollars in savings had been found at Arrium and the business was set to break even next financial year.

“We’ve taken out about $300 million in costs compared to last year’s balance sheet,” Mr Mentha said.

“Those cost initiatives have taken the mining and steel businesses back to breakeven.

“What we need is investment to ensure the long-term viability of the company, so any investment from Government, both state and federal, is most welcome.”

Mr Pyne said the funding plan from the Labor Opposition, along with the $50 million offered by the SA Government, could be irresponsible.

Whyalla Chamber of Commerce president Ron Hay told The World Today that Labor’s announcement put heat on the Coalition to offer a firm package of assistance, should it retain office.

“What the announcement does is put a bit of pressure back on the Coalition arena to either look at what their announcement may be, or come forth with an announcement of their own nature,” he said.

“Quietly, we’ve been confident that something would be coming the federal area.”

73 total views, 1 views today