The Gillard Labor Government will introduce a new advance facility into its Steel Transformation Plan (STP) to provide further support for Australian jobs and to help ensure the future of the Australian steel industry.
This new facility will allow eligible participants to draw down an advance of their future entitlements under the STP in order to address short-term cash flow issues and help the industry become more efficient and sustainable.
It will allow BlueScope to bring forward into 2011-12 up to $100 million of the payments nominally allocated to it under the STP. BlueScope would need to exercise its right to activate the advance facility in time for funds to be drawn by 30 June 2012.
Provision of the new facility has been made available after BlueScope made a number of commitments to the Government in relation to its restructure announced today, including:
Any de-activation of the Port Kembla blast furnace No. 6 and metal coating line No. 5 at Western Port must be in a manner which will enable them to be reactivated in the event of a sustained improvement in steel markets that enables profitable sales to resume.
Any workers which BlueScope makes redundant must be paid all their legal entitlements in accordance with applicable workplace relations legislation, modern awards and the National Employment Standards and any applicable industrial instrument.
BlueScope must commit to continuing as a significant employer in the Illawarra region over the term of the Steel Transformation Plan.
BlueScope must remain committed to steel production in Australia.
The Government will finalise the legislative design of the new facility in consultation with relevant industry stakeholders.
The Australian steel industry is facing a unique set of challenges, including a high Australian dollar, continued weak domestic demand, higher raw material prices and excess supply in international steel markets.
Given these unique circumstances, in July this year the Government announced the STP which will provide assistance worth $300 million over five years from 2012-13.
The STP will encourage investment and innovation in the Australian steel manufacturing industry and help the sector transform into a more efficient and sustainable industry in a low carbon economy.
It is important to note that during these consultations BlueScope has made it very clear that its proposed restructure is in no way attributable to the introduction of a carbon price, and is instead driven by other factors such as the exchange rate and slowing global demand for steel products.
The Government stands shoulder to shoulder with the Australian steel industry, and is delivering a comprehensive package of support measures - in addition to the STP advance facility - to help workers find new employment and to ensure local communities have a strong economy and a bright future.