The Industrial Transformation Institute at Flinders University has estimated that the closure of Arrium’s Whyalla Steelworks plant would deal a savage blow to the South Australian economy, leading to more than 5,000 job losses and costing the state’s economy up to $770 million. From ABC News:
Economic modelling calculated Whyalla’s regional economy could suffer a $530 million impact and South Australia an adverse impact of up to $770 million — a much bigger economic effect on SA than from the shutdown next year of car production by Holden at Elizabeth in northern Adelaide.
Professor John Spoehr said his study confirmed Arrium was too vital to the state’s future to be allowed to fail and government assistance clearly was essential to support continuing steel production.
“The consequences of closure of Arrium would just be devastating for Whyalla, so every effort has to be made to try and secure the operation,” he said.
“That on its own won’t be enough — it will be important to look at a diversification plan for Whyalla.”
The Arrium administrator is hoping for a taxpayer investment to make the steelworks more attractive to potential buyers.
According to Allen Consulting Group, using economic analysis from Monash University, the closure of the local car industry next year would cost around 6,600 jobs in Adelaide by 2018. Similarly, the Productivity Commission forecast that 10,670 jobs in South Australia could be lost.
So when you add Whyalla steelworks into the mix, it paints an ugly picture for South Australia, which faces double-digit unemployment along with the stigma of becoming Australia’s rust bucket state.
