Darren Gray
Published: March 26, 2017 12:15AM

Latrobe Valley businessman Ross Bertoli took a path welltrodden by local teens after he finished Year 11 at Yallourn Tech.

In 1970, aged 16, he became an apprentice fitter and turner with the State Electricity Commission, one cog in an intake of a couple of hundred apprentices.

By joining “the biggest employer” in the Latrobe Valley he became a colleague of his father Arthur (an overseer), and brothers David (electrician), Bryan (fitter), and Peter (draftsman).

“Everyone in the family worked for the SEC,” he says, while sitting in an office of his Morwell business, Hydro Australia, just a few kilometres from the Hazelwood coal mine and power station’s main entrance.

Family connections to the SEC extended further after he got married. His fatherinlaw Harold worked for the SEC, and Bertoli’s wife Lynda also joined the organisation.

“If you walked around that town, and there were only 1400 people in Yallourn North, every second house had people that
worked at the SEC,” he says.

But these days the Bertoli family ties to the local power industry aren’t so extensive. Bertoli left the SEC in 1993 but stayed on a few years at the privatised workshops before going into business, his brothers are all retired and his wife is now in business.

The connection sparked up again when one of Bertoli’s sons joined the workforce. “He did an apprenticeship at Hazelwood, finished his apprenticeship, they weren’t able to take him on because there were only certain numbers that they could afford to take on, [and] he went straight over to Western Australia and was over there for nearly three years. He’s been a flyin, flyout for a long time,” he says.

Almost five decades after he started his working life, Bertoli’s CV now includes a 26year
career with the SEC, followed by a 21year business career.

He is a partowner and general manager of Hydro Australia, a Latrobe Valley business that, like many other local businesses, relies to a significant degree on the power industry for work. Hydro specialises in the repair, refurbishment and upgrade of high energy pumps. The power industry uses these pumps to move fluids like oil and water.

So what will the closure of Hazelwood mean for Hydro Australia and its workforce of 35, and for other medium and small
enterprises in the Latrobe Valley with ties to power generators?

What impact will it have on the number of lawn mowers and line trimmers sold by Central Gippsland Mowers, a small business nearby?

And what effect will it have on cafes and food outlets in the district, such as BK’s Takeaway in Trafalgar, just outside Latrobe City? When the Princes Highway business opens its doors at 6am, about half-a-dozen workers in fluoro vests are queued up for a hot drink, hot food, or both.

What happens to these kind of businesses is crucial. Because the revenue they earn pays for more business investment and for staff wages. The wages are then spent at Latrobe Valley retailers, supermarkets and service outlets.

The big picture question is this: How will the closure of the power station and mine affect the towns and businesses in the
Latrobe Valley now, and shape the valley’s future?

And have the decision makers in all tiers of government learnt the lessons from the SEC’s privatisation in the 1990s, when unemployment jumped, social problems increased and some people moved away in search of work?

In 10 years’ time, the valley is likely to look quite different to today. For a start, the huge Hazelwood coal mine could be a

As the nation transitions further from coal and towards renewables, it seems likely that the coal industry’s footprint and
workforce in the valley will be considerably smaller. Given the power industry employs more people in the Latrobe Valley than any other industry this will be a major change.

Some with longterm experience in the power industry expect another brown coal power station to close within a decade.

“I suspect that in 2025 the mandating of 40 per cent renewables will drive another brown coal power station out of the
market,” says Latrobe City councillor and former long term power industry worker Graeme Middlemiss.

“I think we’re talking seven or eight years, if not sooner, which will just accelerate the problems that we’re having,” he says.

He believes that another brown coal power station will be vulnerable because of Victoria’s renewable energy target, under
which the state government has set a target that 25 per cent of the state’s electricity be generated by renewable energy by 2020, and 40 per cent by 2025.

With renewables providing 40 per cent of Victoria’s electricity, the brown coal and gas sector would be left to provide the
remaining 60 per cent, but would have the capability to produce much more than that, meaning that something in the brown coal sector would be likely to give, Middlemiss warns.

Even before Hazelwood closes the valley has a significant unemployment problem, poorer health outcomes and other socioeconomic disadvantage.

Much will rest on the state government’s ability to lure new industries or enterprises to the valley and the type of major projects funded and how quickly they’re delivered.

In Hydro Australia’s early years, the huge coal mine and power station on the other side of the Princes Highway known as
Hazelwood gave it plenty of work.

“For a period of about four or five years they were our biggest customer,” Bertoli says.

But today, none of Hydro’s work comes from Hazelwood.

A few years ago Bertoli diversified his business as much as possible, recognising that the local power industry would be
contracting. Hydro now performs work for the oil and gas industry and for power stations interstate.

He’s confident his business will ride out the closure of Hazelwood, but lost revenue from Hazelwood has been missed.

“It’s still a hit to us, there’s no doubt about that. It’s a significant hit in regards to the dollar value of the contracts that we were doing with them. But we’ll work our way through it,” he says.

“We’re conscious that we’ve got a good workforce here, so we’re not looking to lay anyone off. In fact, we’ve got an exHazelwood guy working up here … He resigned two weeks ago I think, and we took him on board,” he says.
The morning rush hour for Brendan Kingwill’s fastfood and takeaway business in Trafalgar starts early.

“The morning trade is very much our tradie period. They’re queuing up at 6am to get in the shop,” he says. All of
them waiting outside BK’s Takeaway wear fluoros, which suggests they are power industry workers, truck drivers or some
other kind of tradie.

“There would be halfadozen standing out there waiting for the door to open,” he says.

He doesn’t know how many of his customers buying hamburgers, coffees, dim sims and other takeaway
orders on any given day are direct Hazelwood employees, and expects the number would not be great. But he says the impact of Hazelwood on his custom “starts adding up” when the contractors who work there and businesses who provide equipment or services are included.

So after Hazelwood closes on March 31, will there still be a 6am queue outside BK’s Takeaway?

“That’s the $10,000 question isn’t it,” he says.

“Even if we don’t have those people queued up the real effect is not going to be seen the next day, or the day after. The real effect will be six to 12 months [later]. And I think the six to 12month period is going to be the hardest period,” he says.

He wonders what impact the closure will have on the milk bars where Hazelwood workers buy food and drinks from, and the contractors who are not direct employees. “There’s no payouts for them, there’s no replacement for their economy,” he says.

Committee for Gippsland CEO Mary Aldred says Latrobe Valley businesses are taking a “wait and see approach”.
“I was talking to a recruiting business last week and they were saying that people were holding off on hiring decisions,” she says.

While governments have made their “best efforts” investigating new opportunities for displaced workers, a big challenge

“The reality is that come the end of March, there are still going to be a lot of Hazelwood workers without jobs, there are going to be a lot of contractors who receive no redundancy payments, and there are going to be a lot of small businesses, that through a climate of conservative investment and spending at the moment, are also going to feel that impact,” Aldred says.

“We do have a future and I think as a region we have been quite determined about what that future looks like. It’s a broadbased economy with highly skilled, highlypaid jobs. It’s a resource driven future, from coal to timber, to water and a range of other natural assets. But we need the government to share that vision.”

Locals also want the state government to invest in the Gippsland rail line, including track duplication and better services.
Latrobe City mayor Kellie O’Callaghan says better rail links to Melbourne are essential.

“We need to do everything we can to ensure that it’s an attractive proposition for new industry that want to come here. But we also need to make sure that for those people who want to travel into Latrobe, or from Latrobe into metro for work or study, that they’ve got the opportunity to do so and not experience significant delays,” she says.

Another key ask from the council is for “decentralisation” of government agencies to the valley.

“There are a number of agencies that provide services statewide, that are fairly mobile in the way that they operate, and there is probably no reason at all why they couldn’t be located in Latrobe,” she says.

Asked what impact Hazelwood’s closure will have on the valley, she says: “I think primarily the greatest concern we have is community confidence, and the ability of this community to maintain its resilience, particularly given some of the other
challenges it’s had to deal with. There’s no stepping away from the fact that privatisation had a significant impact on this
community when it occurred, and for many people this looks similar.”

Perhaps the valley is facing a Sliding Doors moment, where if good decisions are made and major investment is made in the valley, the community can negotiate the end of Hazelwood with reduced pain.

And to this end the state government has been active, recently announcing a number of spending initiatives including $46
million for a new aquatic and leisure centre, and $17 million to redevelop a regional indoor sports and entertainment complex in Traralgon. Both projects are part of an $85 million package the government says will create 300 jobs in construction, and 275 ongoing jobs.

The state government has also pledged $20 million towards a “worker transfer scheme”, to assist with the redeployment of Hazelwood employees to other generators. This is part of a $266 million Victorian government package for the valley.
But if the government and industry struggles to soften the economic blow from the closure of Hazelwood, and if local
economic activity drops significantly after it closes, there will be a threat to the revenues of local businesses and perhaps, the viability of some.

Reduced economic activity could also threaten jobs and eventually lift unemployment. Joblessness is already a serious challenge to the valley, a problem that won’t get easier to address after Hazelwood goes.

But predicting the precise impact of the closure on Latrobe Valley employment levels is no easy task, because Hazelwood’s workers fall into many different categories, and a disparate number of businesses employ them.

In the final weeks of operation Hazelwood has a workforce of 450 direct employees. In addition, a number of contractors –
workers employed by other companies contracted by Hazelwood – work at the site.

Last November when Engie announced Hazelwood would close at the end of March, it said the workforce included about 300 contractors. But that number is lower today.

What we do know is that Hazelwood will retain about 135 direct employees after it closes, plus about 100 contractors. The
government hopes about 150 direct employees of Hazelwood will be able to transfer to other power generators, under a
“worker transfer scheme”.

Given the age profile of the Hazelwood workforce, estimates of the number of workers who will retire are as high as one third.

So 150 retirees, plus 150 transferred workers plus 135 retained workers, equals 435, a number just below the total Hazelwood workforce.

So if the worker transfer scheme operates smoothly, and the retiring worker estimates prove accurate, the number of direct employees left jobless could be minimal.

But there are serious qualifications attached to this, such as; how quickly will workers be able to transfer to a new power
station and how much will they be paid when they do, and for how long will the 135 who stay at Hazelwood have a job?

Will it be for two years, 18 months, 4 years?

And what happens after those jobs end? Time will tell.

Darren Gray
Published: March 26, 2017 12:

This story was found at: http://www.theage.com.au/victoria/alocalcommunitywatchesonastheplugisabouttobepulledonhazelwoodpowerstation20170324gv5gdl.