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Victoria looks to Newcastle for clues to post-Toyota future Victoria looks to Newcastle for clues to post-Toyota future
(about 14 hours later)
FearsFears
the closing of Toyota and Holden plans could trigger recessions in the closing of Toyota and Holden plans could trigger recessions in
Victoria and South Australia have reverberated through the states as theVictoria and South Australia have reverberated through the states as the
two car manufacturers announced they will be pulling out in 2017. two car manufacturers announced they will be pulling out in 2017.
Prime The prime
minister Tony Abbott has played down the fears saying new jobs will be minister, Tony Abbott, has played down the fears, saying new jobs will be
created in the area and has pointed to the recovery of Newcastle after created in the area and has pointed to the recovery of Newcastle after
the closure of BHP steelworks in the late 1990s as proof.the closure of BHP steelworks in the late 1990s as proof.
“I“I
accept that the transition is not always easy, but if you look at accept that the transition is not always easy, but if you look at
places that have had significant change like Newcastle, which lost its places that have had significant change like Newcastle, which lost its
steel works back in the 1990s, but is a different and many would say steelworks back in the 1990s, but is a different and many would say
somewhat better city today,” he told ABC radio on Tuesday.somewhat better city today,” he told ABC radio on Tuesday.
“These“These
things can be done and we can seek answers now for the distant future things can be done and we can seek answers now for the distant future
or we can focus on what we can do in the near term, and in the near or we can focus on what we can do in the near term, and in the near
term, our job as a government is to ensure that the economy is as strongterm, our job as a government is to ensure that the economy is as strong
as it possibly can be, that far more jobs are being created than are as it possibly can be, that far more jobs are being created than are
being lost and that’s the best hope over time,, of ensuring that people being lost and that’s the best hope over time, of ensuring that people
who are now working at Toyota can move from good jobs to better jobs in who are now working at Toyota can move from good jobs to better jobs in
the months and years ahead.”the months and years ahead.”
So did Newcastle recover as well as the government is making out? And if so, how?So did Newcastle recover as well as the government is making out? And if so, how?
What was the economic impact?What was the economic impact?
AtAt
its peak BHP employed 13,000 people and after shedding thousands of its peak BHP employed 13,000 people and, after shedding thousands of
jobs through the recession the company announced in 1997 they would be jobs through the recession, the company announced in 1997 it would be
withdrawing completely from Newcastle in 1999 by which time the withdrawing completely from Newcastle in 1999 – by which time the
steelworks employed about 4000 people.steelworks employed about 4000 people.
TheThe
cooperation of then prime minister John Howard and then leader of the co-operation of the then prime minister John Howard and then leader of the
iron workers union, Maurie Rudd, played a significant role in ironworkers’ union, Maurie Rudd, played a significant role in
Newcastle’s recovery as they commissioned an investigation into the Newcastle’s recovery as they commissioned an investigation into the
impact on the region.impact on the region.
TheThe
taskforce found the Hunter region would have to create about 10,000 taskforce found the Hunter region would have to create about 10,000
jobs to counter the impact of both the immediate loss of jobs at the jobs to counter the impact of both the immediate loss of jobs at the
steelworks as well as jobs associated with that would suffer. steelworks as well as associated jobs that would suffer.
Unemployment soared to 12% which at the time was one of the worst in Australia. Unemployment soared to 12%, which at the time was one of the worst in Australia.
Did the city recover?Did the city recover?
TheThe
federal government, the state government and BHP each put in $10m into federal government, the state government and BHP each put in $10m into
the “Hunter Advantage” fund focused on creating jobs in the area with the “Hunter advantage” fund focused on creating jobs in the area, with
most of the money being spent over about two years.most of the money being spent over about two years.
Current The current Newcastle MP, Sharon Claydon, said the city was still feeling the
local Newcastle MP, Sharon Claydon, said the city is still feeling the impacts of the closure but had largely recovered, putting a lot of the
impacts of the closure but has largely recovered and puts a lot of the success down to to community co-operation and smart investment.
success down to to community cooperation and smart investment.
Between 2001 and 2011 employmentBetween 2001 and 2011 employment
in the health care and social assistance sector rose 44%, jobs in in the healthcare and social assistance sector rose 44%, jobs in
mining increased by 109%, there were 71% more jobs in the professional,mining increased by 109%, there were 71% more jobs in the professional,
scientific and technical services industry while accommodation and food scientific and technical services industry, while accommodation and food
services increased by 43%, according to a Hunter region economic profile by the NSW Parliamentary Library. services increased by 43%, according to a Hunter region economic profile by the NSW Parliamentary Library.
In a paper by the Hunter Valley Research Foundation called Diversification of the Hunter Economy – Post BHP, it found structural change in Newcastle towards a services and tertiary based economy had been decades in the making. In a paper by the Hunter Valley Research Foundation called Diversification of the Hunter Economy – Post BHP, it found structural change in Newcastle towards a services- and tertiary-based economy had been decades in the making.
“One“One
key factor contributing to the strong improvement in the economic key factor contributing to the strong improvement in the economic
climate in the Hunter during recent years has been the painful, but climate in the Hunter during recent years has been the painful, but
unavoidable, structural changes made in the past. These structural unavoidable, structural changes made in the past,” the report said.
changes included significant job cuts in manufacturing (e.g. in the BHP “These structural
changes included significant job cuts in manufacturing (eg in the BHP
plant), accompanied by a strong shift in employment share towards the plant), accompanied by a strong shift in employment share towards the
tertiary sector. This led to the achievement of an advanced stage of tertiary sector. This led to the achievement of an advanced stage of
economic diversification,” the report said. economic diversification.”
The old steelworks site is now owned by the Newcastle Port Co-operation who are developing it as a port to increase trade through the region. The old steelworks site is now owned by the Newcastle Port Corporation, which is developing it as a port to increase trade through the region.
Today the unemployment rate in Newcastle is about 5.35% compared to the national average of 5.8%. Today the unemployment rate in Newcastle is about 5.35% compared with the national average of 5.8%.
Can the Newcastle recovery be repeated in South Australia and Victoria?Can the Newcastle recovery be repeated in South Australia and Victoria?
ClaydonClaydon
said at the time the federal government not only worked with the state said the federal government had not only worked with the state
government and BHP but churches in the area as well as welfare and government and BHP but churches in the area. Welfare and
employment agencies were heavily involved.employment agencies were heavily involved.
SheShe
said there were some stumbles, such as roughly $2.5m being spent on said there had been some stumbles, such as roughly $2.5m being spent on
establishing a Impulse Airlines call centre which relocated to another establishing a Impulse Airlines call centre which relocated to another
region within a year.region within a year.
The NSW government have attempted a similar “advantage fund” strategy for the Illawarra region, which has also suffered from the loss of manufacturing jobs over the years, but unemployment rates in some areas of the region are still in double digits. The NSW government has attempted a similar “advantage fund” strategy for the Illawarra region, which has suffered from the loss of manufacturing jobs over the years, but unemployment rates in some areas of the region are still in double digits.
TheThe
lessons to be learnt from the successful package are to target money lessons to be learnt from the successful package are to target money
carefully with specific aims of the spending which can be measured at carefully, with specific aims of the spending which can be measured at
different milestones, according to Calydon. different milestones, according to Claydon.
“Newcastle was successful because it had a very strong community collaboration and approval,” she said.“Newcastle was successful because it had a very strong community collaboration and approval,” she said.
“It wasn’t just a bucket of dollars being thrown at it, though of course dollars are important.”“It wasn’t just a bucket of dollars being thrown at it, though of course dollars are important.”
Croydon Claydon
said it was important to collaborate heavily with different regions in said it was important to collaborate heavily with different regions in
the states to make sure it was understood exactly what they needed to the states to make sure it was understood exactly what they needed to
recover and what their strengths were.recover and what their strengths were.
“You’ve got to be mindful you’re not just relocating jobs, you’ve really got to make sure you’re creating jobs,” she said.“You’ve got to be mindful you’re not just relocating jobs, you’ve really got to make sure you’re creating jobs,” she said.