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Union delegate Marcus Faulkner doesn’t like to talk much about the political views of his colleagues at the Tomago Aluminium smelter, but in the afterglow of the $2.5 billion bailout announced on Thursday, he’s willing to admit it can’t have hurt Labor.
“I don’t want to speak too much about politics, and I can’t speak for the majority of workers, but, yes I should imagine a decision like this, especially if you rely on the smelter for your job, will be a factor for people,” he says.
“But then, you know, the political spectrum is very large, it’s made up of a lot of issues.”
Tomago Aluminium, located about half an hour outside of Newcastle in the state electorate of Port Stephens, is right in the heart of territory One Nation believes it can capture in NSW.
The party recently chose Stuart Bonds, a coal miner who has previously run for the federal seat of Hunter on three occasions, as its NSW leader, and Pauline Hanson will visit later this month ahead of a fundraiser in the Lake Macquarie suburb of Toronto.
And while Labor figures reject the idea the Tomago bailout was informed by the One Nation threat, there is no doubt the Minns government is attuned to the danger it is facing.
Minns was not a regular visitor to the region for much of his first term. In March 2024, the Newcastle Herald noted that he had not visited the city during his first year as premier, though he had been to Port Stephens and Maitland, and to Greta after the Singleton bus tragedy.
However, the frequency of his visits appears to have ticked up considerably, and Minns used the party’s state conference in July to announce a $12 billion package to build the state’s next generation of Tangara trains at a new manufacturing facility in the Hunter.
That, and Thursday’s Tomago announcement, will be a boon for the party’s Hunter MPs, who are looking over their shoulder as One Nation continues to record high polling figures.
Labor’s Cessnock MP, Clayton Barr, is at ground zero of the right-wing party’s surge and says he is “still deeply concerned that people don’t have confidence that all governments are providing for them”.
But, he said, announcements such as Tomago showed voters Labor was invested in manufacturing in the Hunter.
“I’ve got dozens if not hundreds of Tomago workers in my electorate [and] the whole ecosystem of work which surrounds it. I know those people and their families are going to sleep better tonight,” he said.
The announcement stated the NSW government’s contribution is “capped” at $1.225 billion over 10 years from 2029, with the federal government to contribute the other half of the agreement.
However, while the exact structure of the bailout remains unclear, the deal is based on a power purchase agreement which will see Tomago’s owner, Rio Tinto, buy energy from the Commonwealth-owned Snowy Hydro.
Taxpayers will in effect subsidise the gap between commercial prices and what Tomago is willing to pay.
That raises the possibility that if energy prices were to spike the Commonwealth could contribute more over the life of the deal.
In an interview on the ABC, federal Industry Minister Tim Ayres would not confirm whether the Commonwealth could end up paying more, though he said taxpayers would benefit from revenue agreements in the event of sustained high aluminium prices.
“It’s a large and complex undertaking, not a straightforward one … but it’s manifestly in the national interest. It’s in the interest of taxpayers,” he said.
Minns has previously baulked at a 50-50 funding split, but negotiations on Tomago were part of a wider suite of funding disagreements between the Commonwealth and state Labor government. Minns on Thursday indicated some of those disputes had been resolved.
“What we were able to do over the last three or four months, and I’m very grateful for the prime minister’s intervention, is solve a range of federal-state financing issues that have been on the table for a long time, but the PM stepped in, and he solved it, and we’re very grateful,” he said.
While the details of those agreements remain unclear, some of them relate to additional funding for road infrastructure, a major point of tension between the two governments since NSW received less road funding per person than Queensland, Western Australia and South Australia in the most recent federal budget.
Thursday’s deal was welcomed by the opposition Coalition in NSW, though shadow treasurer Scott Farlow noted the government had walked away from its previous tough talk on the funding split.
One Nation, for its part, said the need for a bailout was a symptom of Australia’s renewable energy policies. In NSW, the party says it would build a government-owned coal-fired power station.
“It’s a Band-Aid on a bullet wound,” Bonds said. “They needed to do it or the company was going to walk. I’m not arguing the bailout didn’t need to happen to keep jobs here, it probably did, but what sort of energy failure has happened to allow this to occur?”
For Faulkner, however, the politics is very much secondary.
“When the announcement about the potential closure first happened it just [sent] a shockwave through the whole workforce,” he said.
“Tomago have got a lot of young families, people trying to get into the housing market, which is difficult at the best of times. There was a lot of uncertainty hanging over people’s heads, a lot of anxiety.
“For all of them, this decision is massive.”
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