Whyalla Steelworks

Mr HUGHES (Giles) (15:19): I rise to talk about, once again, the steel industry and, time permitting, the decommissioning of the Sydney and the Tobruk. It has been a regular refrain of mine and of others that the economic and social costs associated with the closure of the steelworks in Whyalla would far exceed the cost to government of co-investment or other forms of support. The recently released economic assessment of the loss of steelmaking in Whyalla by Professor John Spoehr from the Australian Industrial Transformation Institute at Flinders University spells out just how significant the impact would be. For Whyalla the loss would be devastating, but there would also be significant statewide impacts and indeed national impacts.

In a summary of the impacts, the report stated that the regional economy of Whyalla will shrink by between $490 million and $530 million in gross regional product, or between 3,550 and 3,940 jobs. The upper limit represents 41 per cent of the local labour market. The summary goes on to say that for every three jobs lost directly in the region at the steelworks, the mine and in transport linked to these operations, there will be another one job lost in Whyalla in areas such as retail, health, education, recreation and personal services. I think the flow-on effects modelled within the Whyalla economy are an underestimate.

The report goes on to say that for every three jobs lost in Whyalla another job will be lost elsewhere in South Australia. The report provides an important qualifier on the above when it states that it should be noted that this does not allow for potential more disruptive effects should some economic activities in the production-induced context lose critical mass and shut down their operations entirely. My view is that those more disruptive effects would inevitably come into play. The negative social consequences would be profound and generational.

The combination of the dire consequences of closure allied to options available to assist at a government level, which will lead to productivity gains, means an assistance package is in the process of being put together to help secure the future of steelmaking in Whyalla. That will represent good news for Whyalla, the state and the nation. The administrators have flagged that the process of seriously working through potential offers to acquire Arrium, either as a whole or in parts, will commence in July. I am very confident that a government assistance package for steelmaking in Whyalla will be part of any sale process.

On a related note, the $10 million Whyalla small business loan program aimed at small to medium-size local contractors that supply Arrium is now starting to generate positive results. One contractor I spoke to yesterday said that if it were not for the program he would be out of business and his employees would be out of work. It would have meant that a business built up over many years of hard work would have gone to the wall. It would have gone to the wall, not because of any decisions the business had made but because of factors entirely beyond the business' control. I cannot overstate the importance of retaining the local supply chain, a supply chain that is part of the economic and social fabric of Whyalla.

On a different note, the next step will be taken in exploring the feasibility of securing one of the Navy's decommissioned vessels for use as a dive wreck in the northern waters of the Spencer Gulf. Two ships are potentially available. One is the Tobruk, a supply vessel, and the other is the Sydney, which is a frigate. A number of regions interstate are also interested in securing one of the vessels. Premier Weatherill formally wrote to the defence minister recently expressing South Australia's interest.

A lot of factors have to be taken into account when looking at the feasibility of securing a vessel for the Northern Spencer Gulf, which ultimately boils down to what are the costs and what are the benefits. The step that is about to be taken is a formal briefing followed by an inspection of both vessels which are currently moored in Sydney. Securing one of the vessels would be a major tourism plus for the Northern Spencer Gulf but, no pun intended, a lot of water has still to flow under the bridge.