Weld Australia calls for action against Victorian Government’s offshoring of local infrastructure projects in favour of cheap, imported steel.
Comment from CEO Weld Australia, Geoff Crittenden
Weld Australia – who represents thousands of local welders and fabricators – is calling for immediate action against the Victorian Government’s offshoring of steel for major infrastructure projects. The Victorian Government has already decimated the local steel manufacturing industry, costing jobs, investment, and threatening the sovereign capability of Australia’s manufacturing sector.
In the past six to 12 months, Victorian industry has seen an increase in the volume of imported fabricated steel. Evidence suggests that since the beginning of the year, more than 28,000 tonnes of steel has been offshored. The North East Link project is a critical example of this issue. It was recently revealed that the Bullen Flyovers, consisting of 11,000 tonnes of steel bridges and girders, were awarded to an overseas fabricator.
Despite earlier reassurances made by the Victorian Government to Weld Australia members, these contracts were awarded to a Chinese company – that is banned from operating in the US – to meet project timelines that allegedly could not be met by a single local fabricator. Weld Australia finds this rationale concerning because it is untrue.
Over the course of past two to three years, the Victorian Government has worked with local industry and disseminated supplier briefings that outlined an influx of work, calling for local fabricators to reserve capacity for 2025. Our members have repeatedly told us that they have actively scheduled this project work into their targeting and forward forecasts. As a result, local manufacturers have not pursued work on other projects, or in other industries.
Now, the Victorian Government has done a backflip, sending the bulk of the work straight offshore. How can local industry expect to operate with any kind of surety if their own government can’t stay true to its word? Our local industry is being held to ransom by duplicitous politicians.
The public should be concerned for their safety. How can an imported fabricated steel structure meet the quality compliance requirements imposed by the Victorian Department of Transport and Planning? According to the Department’s own specifications, fabricators must be AS/NZS 5131 Certified to CC3 for such structures, yet it remains unclear if overseas fabricators meet any kind of quality standards – let alone these stringent standards. Do members of the general public feel safe driving over steel bridges not knowing whether the welds will hold?
This situation raises serious questions about adherence to the Victorian Government’s own Local Jobs First Policy. The Policy merely requires “maximisation” of local steel content without a clear percentage requirement.
A concerted effort by governments to achieve a 90 per cent domestic share of steel content in government projects would increase local steel supply by 3.4 million tonnes in total over the next five years, an average of 690,000 tonnes per annum, contributing $4.3 billion to real GDP over the next five years, assuming an average steel price of $1270/t. This price is 10 per cent higher than the projected average import price, in line with Canada’s local content policy.
Challenges ahead for Victorian fabricators
Victorian steel fabricators are struggling against the influx of imported steel, particularly from Vietnam and China, which is up to 40 per cent cheaper than locally fabricated steel. Companies across the state are reporting sharp downturns in available work, leading to redundancies, reduced work hours, forced annual or long-service leave, and operational cutbacks.
Prominent local fabricators in the Australian market have reported a staggering reduction of approximately 60 per cent in government tender availability. This downturn has already forced numerous redundancies, cut operational hours to as little as three to four days per week, and halted major investments in production capacity. The impact extends to apprenticeships and future investments. Companies are reconsidering training programs, shelving capital investments, and struggling with tax and interest burdens.
We are witnessing a race to the bottom. How can our local steel industry compete when imports are priced below our own raw materials?
A call to the Victorian Government:
Weld Australia wants action from the Victorian Government. The government must adhere to its own Local Jobs First Policy, ensure clear local content requirements, and protect local steel jobs.
The Victorian Government needs to stand up for our manufacturing sector. These cheap imports are undermining local industry standards, taking away jobs, and compromising the quality of our nation’s infrastructure. The government must take urgent and immediate action to protect the livelihoods of thousands of workers and steel fabrication industry in Australia. We must have clear requirements for local steel content and stronger adherence to quality standards to ensure that Victorian fabricators can compete on a level playing field.
