Prime Minister Tony Abbott is expected to meet Victorian Premier Dennis Napthine on Wednesday to discuss the latest round of job losses at aluminium giant Alcoa.

Up to 1000 jobs will go when Alcoa closes its Point Henry smelter and rolling mills in Geelong in NSW by the end of the year.

It’s the latest in a string of employment blows for Geelong — which has seen closures or big job losses at Ford, Target, Boral Waurn Ponds and Qantas at Avalon Airport.

Mr Abbott is considering whether to extend the $100 million growth fund for general workforce retraining.

He will meet Dr Napthine today to discuss the latest round of job losses, the ABC reports.

Jobs fight flares

The new government’s pledge to create one million jobs in five years has hit more turbulence with the Alcoa announcement.

“Despite the hard work of the local teams, these assets are no longer competitive and are not financially sustainable today or into the future,” Alcoa chief executive Klaus Kleinfeld said.

“We recognise how deeply this decision impacts employees at the affected facilities and are committed to supporting them through this transition.”

Political fracas

The announcement set off a chain reaction among politicians at all levels of government. Geelong mayor Mayor Darryn Lyons says he didn’t expect the announcement to be so big and so soon.

“It’s a horrendous day for Geelong. It’s another kick in the teeth for my great city,” he said outside the plant. He said workers should have been given more notice and need to be retrained quickly.

“We need emergency funding and we need it now,” Mr Lyons said, who confronts the possibility people will begin moving away from Geelong in search of work.

Garry Holmyard, who has worked at the plant for 23 years, said he realised he and his family may need to relocate.

“I don’t want to leave, but if it happens, it happens,” he said. ”It’s a lot of people and families who have got kids. A lot of them are saying they’re going to have to sell up as soon as they knew this.”

The federal government took a more sanguine view, saying the job losses were disappointing but predictable, and adding that the $40 million given to Alcoa by the previous Labor government was money “down the tubes”.

The carbon tax had added to the cost of production and the closure gave further weight to the argument that Labor should support the tax’s repeal in parliament, Treasurer Joe Hockey said.

“It’s a massive cost on aluminium smelters, and a 50-year-old smelter with a carbon tax is never going to be cost-effective,” he said.

An ‘asteroid’

Opposition Leader Bill Shorten, meanwhile, said the announcement was an “industrial asteroid”, but he was confident Geelong would rebound.

“We think the jobs are worth fighting for,” he said.

But Australian Workers’ Union boss Paul Howes struck an unexpectedly conciliatory tone, saying it was not the time for finger pointing.

“There is nothing the government could have done to stop this announcement today,” he said.

RBA: Jobs gloom to continue

The latest bad news on the jobs front came as the Reserve bank of Australia confirmed its view that the national labour market was not about to see a sudden improvement.

The RBA board thinks it has done as much as it can, by lowering interest rates, to get the economy back up to cruising speed, but that it will take a while for that to happen. Quite a while, in fact.

It still expects growth to be below trend, and below-trend GDP growth implies job creation will also be below trend.

In other words, less jobs are being created than is needed to keep pace with growth in the number of people who would accept jobs if they were available.

That means either rising unemployment, or what effectively amounts to the same thing – fewer people active in the labour market than there would otherwise be thanks to the lack of jobs.

Given the lag between changes in pace for GDP and for the increase in employment, that can be taken as an admission that job creation may not reach a pace needed to cut into the unemployment rate until as late as 2017.

Of course, things may turn out better than this.

Alcoa closure announcement — the numbers

What’s happening:

• Alcoa is closing its 50-year-old Point Henry aluminium smelter in Geelong
• Two rolling mills in Geelong and Yennora will also shut
• Smelter closes in August, rolling mills by end-2014
• Smelter in Victoria’s Portland, WA refining operations will continue

How many jobs are affected:

• 500 at the smelter
• 440 at the rolling mills
• 940 in total, so far

Why is this happening:

• Alcoa says the assets are no longer competitive, financially sustainable

Other recently announced closures:

• Ford — local car making to cease by October 2016; impacts 650 jobs at Broadmeadows plant, 510 at Geelong
• Toyota — local car making to cease at end 2017; impacts 2500 jobs at Altona plant
• Holden — local car making to cease by end 2017; impacts 2900 jobs, 1600 in SA and 1300 in Victoria
• Forge Group — engineering group goes into receivership, announces redundancies; impacts 1300 jobs in WA, Queensland

—with AAP, Gary Shilson-Josling