Closure will 'add to the unemployment problem'

The economic blow delivered by the closure of Hazelwood will not be as severe as the devastation brought on by the privatisation of the SEC because of the smaller number of jobs set to go, the author of an authoritative study into the impact of the 1990s power industry restructure says.

In his 2001 report, 'The Latrobe Valley, Victim of Industrial Restructuring', then-Monash University professor Bob Birrell, conducted a major study into the social and economic impacts of power industry privatisation in the Latrobe Valley region.

He found employment in the Valley's power sector declined from about 11,000 in the late 1980s to about 2600 in 2001, resulting in a major population loss equivalent to nine per cent of the region's 1991 population.

With about 1000 jobs set to go, Dr Birrell said the impact would not be as big as the losses experienced while Jeff Kennett was premier.

"It's nowhere near as big as that assault in the Kennett era, so it would just add to the problem (of unemployment) that's existed ever since then," he said.

"It's going to remove a significant quantity of purchasing power out of the Valley."

He said while he had not seen the age profile of the workers who would lose their jobs, he imagined they would be workers who were on the cusp of retirement.

"A lot of them would be retiring anyway - they're just not going to be replaced," Dr Birrell said.

"It's just another very difficult adjustment problem the Valley faces, even if it's not as severe as the Kennett rationalisation."

He said government intervention to attract employment to the region could offset the problems, but he did not think "there's much chance of that".

"Federal and state governments have just removed that option off the table - that's industry policy and we just don't do that anymore," Dr Birrell said.

"It's up to the market."

In the report, Dr Birrell documented social disadvantage in the region at the time of privatisation, finding 30 per cent of families in Moe and Morwell were without breadwinners.

His work also highlighted the severe disparity in educational achievement that existed in 1996, with more than 50 per cent of Latrobe Valley residents having left school before the age 17.

This compared with about 35 per cent in Melbourne.

"The Latrobe Valley was just quite unique as a social setting there. It had been built up over several decades with a high degree of dependence on a paternalistic employer - the SEC," Dr Birrell said.

"You had well-established unions that had exploited their power in the Valley, and that had provoked some pretty hostile responses from the politicians in Melbourne, and it helps explain part of the ferocity of their (the politicians') attack on the Valley at that time."

Dr Birrell has since retired from Monash University and now heads up the Australian Population Research Institute.

His work was financed by the union movement in the Latrobe Valley, but said they did not interfere with his work.

He said he was "struck by the public spiritedness of the unions at the time".

"They worried about their members' positions and they were genuinely part of the community and concerned about the impact on the community (of privatisation)," Dr Birrell said.

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