Contributed from Victoria

The intervention by Prime Minister Anthony Albanese and South Australia Premier peter Malinauskas to save the Whyalla steelworks form closure with a $2.4 billion package is the right move. Australia’s remaining steel works was about to go into administration. Whatever the reason for this, it remains that this is an asset that Australia needs. There would only be one other steelworks left if this one closed.

Yesterdays’ rushing through of needed legislation to allow the deal was timely. It showed what the parliament can do when it sees the need.

Photo from The Australian: An arial view of the Whyalla Steelworks

The owner of the works, One Steel Manufacturing, part of the Sanjeev Gupta Group (GFG), was going to stop operations because the business could not pay off its debts. This means a part of the government support is $50 million for creditor assisted payments. This comes on top of $100 million for immediate on the ground support, $348 million to help stabilise the steelworks, and $1.9 billion for investment on future capacity.

GFG still owes the Australian government tens of millions in royalty payments and another $15 million to the South Australian government for water use. This will in part be paid for by the company out of the sale of its Tahmoor Coking Coal mine in NSW. Another problem is that the owners had neglected to invest on maintenance and upgrading for years. A cash injection is needed to sort this out.

The operation in Whyalla produces products that help build railways, schools, hospitals, high-rise towers, and transmission infrastructure, making it a vital national resource. No other place manufactures long steel. The works provides jobs and builds the local economy. These are the reasons why the operation should not end.

Unions representing the workers there, Australian Manufacturing Workers’ Union, Electrical Trades Union and Maritime Union of Australia, have all welcomed the package.

This will not stop the steelworks going into administration. The administrator will now be looking for a new owner. This begs one question. Why was not the package delivered in the form of buying at least a share of public ownership. This would mean that the Australian government would win a return out of future profit. More importantly, it could guarantee future operation. Without this, it is just another handout to big business.

Today’s barrier is an attitude that government must not interfere in the market and that only private ownership is legitimate. The fact is that the package provided in this case is government interference in the market, and the market suggests that those who invest should be owners. Here is a failure of pro market ideology because the market itself has proved a failure. This could be acknowledged.

Not that this package deserves condemnation. On the contrary. It should not. Here is a case where any kind of help is welcome and warranted. Australia would be worse off with a diminished capacity to produce steel products. This would hurt the economy and the wellbeing of Australian citizens, who would bear the higher cost of importing these products.