IF THE Latrobe Valley got $260 million from the State Government after it lost 700 jobs at Hazelwood, Leongatha should get $19.5 million.
That was the view of South Gippsland Shire Councillor, Meg Edwards, who last week called on the shire to advocate for a restructure and worker support package in line with what was given to the Valley, following last Tuesday’s shock announcement by Murray Goulburn.
MG has said it will cut 52 positions at Leongatha, across its salaried staff, trades and operator workforce, following on from the 12 redundancies in its transport division last month.
It reportedly equates to almost a quarter of the Leongatha MG workforce.
“One of the curious things I noted in terms of the Murray Goulburn jobs and this will obviously have an impact on our local area, but I come back to what Cr McEwen mentioned earlier, that we should potentially ask for equity,” Cr Edwards said at last Wednesday’s council meeting.
“I don’t necessarily agree with the extraordinary amount of taxpayers’ money that has gone to the Latrobe Valley, in the order of $260 million, however if we are asking for equity, in this case that equates to the 700 jobs (divided into $260m), which would be $371,428 per job. So if we were to multiply that out to the 52 jobs in Leongatha, that’s $19.5 million.
“So if we are asking for equity, if that’s the line we are going down and I don’t necessarily say the amount of money was right that is going to the Latrobe Valley… if we are going down that line, I think we’ve got reason to ask the State Government, well, what are you going to do for Leongatha?
“That’s a question we might need to ponder between now and the next meeting,” said Cr Edwards.
However, ALP Member for Eastern Victoria, the State Government’s spokesperson in Gippsland, Harriet Shing, has dismissed the notion.
“I can appreciate the logic in what Cr Edwards is saying, applying the same funding principles, but the Latrobe Valley is a very different situation,” Ms Shing said.
“What we are dealing with in the Latrobe Valley is entrenched disadvantage where we’ve had a couple of decades of adjustment challenges.”
This restructure, she said, has been going on since the 1990s when the SEC was privatised, and for many years people were largely left to their own devices, not given any assistance.
“We brought in the first worker transition scheme to give workers the opportunity to remain in the industry. Plus a range of other measures.”
Not the least of these was the setting up of the Latrobe Valley Authority to coordinate the efforts of all agencies in developing a new future for the Valley, not so reliant on coal.
“The Murray Goulburn processing jobs will attract a suite of support measures, including case management support but we’re not looking at a large scale support package like we saw in the Latrobe Valley,” said Ms Shing.
“You’re talking about the wide-scale impact of transition from coal in the Latrobe Valley, whereas South Gippsland isn’t moving away from dairy, is it?”
Ms Shing said that those employees affected by the announcement at Murray Goulburn in Leongatha last week would be supported to find alternative employment and training but generally she hoped to see the sector stabilise and grow again in the future.
“There’s always a certain amount of volatility around commodities, especially agricultural products being supplied to international markets and there’s work being done on how we might smooth the impact of that on the primary producers.
“But the hope is that if the Murray Goulburn shareholders go on and accept the Saputo offer, as they seem likely to do, we’ll see things begin to improve.”
Ms Shing said the State Government had a good record of supporting the dairy industry in Gippsland, including the funding of a $30 million ‘water security’ connection which would benefit Burra Foods and the townships of Korumburra, Bena, Loch and Poowong.
“One of the big things we have going for us is our access to markets in China, especially the stranglehold we have on infant formula supply.”
Ms Shing said some processors like Burra Foods in Korumburra had actually benefitted from the movement in milk supply where additional jobs had been created.
“There will however be targeted support provided to workers who are offered voluntary redundancy packages, including financial support and counselling, along with training opportunities.”
‘Regrettable’ but necessary
As well as the latest round of cuts at Leongatha, offered by letter to more than 200 staff locally who can apply for voluntary redundancies, there were a total of 73 positions made redundant across the state at Leongatha 52, Maffra 5, Koroit 9 and Cobram 7.
General Manager, Milk Supply and Field Services, Craig McRae, said the cuts were part of a “commitment to reduce costs and drive business improvement, we are making changes to our product manufacturing operations”.
“This continues our efforts to address our cost base, improve efficiencies and ultimately increase earnings and the farmgate milk price.
“Over the last 18 months we have managed a lower milk intake through a reduction in our contractor workforce, changes to rosters and the use of annual leave and accumulated hours.
“However, more decisive action is now required.
“Today we advised our manufacturing teams that there will be a reduction in approximately 70 roles across our Koroit, Cobram, Maffra and Leongatha sites.
“Voluntary redundancies will be offered for the majority of impacted roles.
“These changes will significantly increase operational efficiency, while enabling us to meet demand for MG dairy products.
“This decision is regrettable but necessary. These actions have been taken to ensure MG can deliver sustainable and competitive returns.”
Big impact, says shire
Speaking after last week’s council meeting, new Mayor Cr Lorraine Brunt, said the shire would make contact with the government and Murray Goulburn following the announcement.
“The loss of those jobs will have a significant impact and we should be advocating to the State Government for support for those who will be made redundant and also to help the factory build up again.
“On the plus side, they are still a major employer in the town and MG remains committed to Leongatha. But in the interim, the State Government should be doing something for Leongatha and South Gippsland,” she said.
“I believe Burra Foods may have a major announcement soon, so the future of this area is still firmly connected to the dairy industry.”
Leongatha businesses are also choosing to stay positive about the future, despite Murray Goulburn’s bombshell last week.