Why Australia’s iron industry is struggling

Construction and smelter workers have been on strike for months in the wake of the collapse of the Australian dollar and the prospect of a government-backed $50bn capital spending program.

The strike is part of a broader protest movement against a $20,000 wage hike to be implemented by the government on Wednesday that would cost workers more than $4,000 a year.

But in the lead-up to the strike, a number of industry experts, including the president of the Association of Australian Construction and Smelter Workers, argued the proposed wage hike would not bring in enough new investment to keep Australia’s smelters competitive in the global market.

“We need to raise our wages to make up for the fact that the price of iron ore has gone down,” Mr Rennie said.

Labor and the Nationals have promised to raise the wages of workers by an average of about $3,000, but the government says it will not do so without the support of the industry.

Mr Renny said the government had not provided the industry with enough evidence to support the $50 billion capital spending plan it wants to introduce this week.

It would mean the price for iron ore would have to go up about 8 per cent, he said.

Mr Renny, who was the deputy chief executive of the World Iron and Steel Council, said it was the right time for a debate on whether workers should be paid higher wages.

He said that the industry had been able to keep up with the cost of living, and that there were also opportunities to build up the workforce.

As the industry recovers from the collapse, there is no shortage of new jobs and new customers for the Australian iron and steel industry, Mr Renny said.

But he said the current job market was far from being strong, with many jobs lost to automation and outsourcing.

More than half of all jobs in Australia are at the margins of the labour market, he added.

“There are more than half the jobs in the world that are not being created by humans at the moment,” he said, noting the impact of automation on the supply chains of industries like furniture and textiles.

And the number of jobs in mining, pulp and paper production are also expected to shrink.

Mr Triggs said the strike was not about wages.

“It’s about getting iron ore prices back to where they were when this industrial revolution began in Australia in the late 1800s, around 1840,” he told the ABC.

Workers are also protesting against the Government’s proposed $30,000 bonus for workers in the construction sector, which the union has labelled an unfair and unnecessary bonus.

In the past, the bonus has helped cement workers’ wages to $100 a week.

However, the union says it is seeking a change in the bonus to be less generous, because the extra money will help with the costs of the strike.

“We are very disappointed that the Government has decided to increase the bonus, which is the most generous we’ve seen, but it is also the most expensive and the most difficult for the industry,” Mr Triggs told the television program Q&A. ABC/AAP