Illawarra unemployment highest in the country

June 28, 2013

The Illawarra regions of Shellharbour, Shoalhaven and Kiama combined have the highest unemployment rate in the country, at 15.3%, the Australia Bureau of Statistics said.

This is 178% higher than the national average of 5.5%. If Wollongong is included, the average figure is 10.2%, 85% higher than the national average.

The decline in manufacturing has hit the region hard. In 2011, Bluescope announced it would sack 700 workers at its Port Kembla steelworkers. In response to those sackings, Patrick Stevedoring announced the next month that it was sacking 160 wharf workers at Port Kembla.

In response, the federal government launched the $30 million Illawarra Region Innovation and Investment fund.

The fund is arguably a flop.

Australian Workers Union Port Kembla branch secretary Andy Gillespie criticised it for not being adequately funded. He told the ABC in January last year: '"Thirty million dollars needs to be more like $300 million."

Six months after it was formed, only a quarter of workers sacked by Bluescope had found news jobs. It took a few years to realise the fund was a waste.

The ABC’s 7.30 said only 117 jobs had been created by the fund. It was initially promised that 880 jobs were to be created. It only reached 13.3% of its target. In other words, it took $256,410 of investment to create each job. For some small businesses, this is more than their entire annual budget.

Furthermore, it was found that only two businesses out of 37 who took money from the fund had employed former steelworkers. Spiers Engineering, for example, accessed $400,000 on the basis of creating six jobs and buying new machinery.

But its managing director told the May 21 7.30 program: “We had four new employees but with the downturn in industry generally we've had to let two of those go ... We retrenched two last year and with the market the way it is we haven't seen any upturn which would enable us to re-employ people."

The government gave access to funding based on a commitment to making jobs, not on whether they were actually created, so many businesses took the chance to make easy money, which they did.

Former industry minister Greg Combet said: "Is it worthwhile that 117 jobs at least so far have been created and 680 jobs committed to being created? I think it is."

It is fair to say, no, it isn’t. The Illawarra has suffered high unemployment for decades. This, of course, needs significant investment but also requires the political will to not just gamble away the money with private industry but invest to ensure sustainable and socially useful jobs are created throughout the region.

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