House of Assembly: Tuesday, June 21, 2016

Contents

Ministerial Statement

Whyalla Steelworks

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:08): I seek leave to make a ministerial statement.

Leave granted.

The Hon. A. KOUTSANTONIS: I would like to further update the house on the ongoing efforts by the state government to secure the future of steelmaking and the thousands of jobs that rely on the steelworks and iron ore mines in the Upper Spencer Gulf. The South Australian government, on advice from the Steel Taskforce, this month announced a proposal to secure the future of Whyalla and the Upper Spencer Gulf through a $50 million commitment to support investment in the long-term viability of steelmaking.

At that time, we called for bipartisan support for an additional $100 million commitment from the commonwealth to secure a $150 million facility that would be made available to the new owners of Arrium's Whyalla operations. I am pleased that we have now been informed of two alternative proposals, one by Labor and one by the Coalition, in response to the state government's commitment to Whyalla.

Labor leader Bill Shorten has pledged that a government he leads will provide $100 million towards a Steel Reserve they can be drawn down by the new owners to support capital investment projects to improve the viability of the steelworks and associated mines. The Steel Reserve would comprise $50 million in commonwealth grants and a further $50 million in concessional loans financed by the Export Finance and Insurance Corporation (EFIC) to build on the $50 million commitment made by the South Australian government.

This funding would be available to a new purchaser, subject to matching funding, and released on appropriate terms and conditions to ensure that this money supports investment in the plant. On the other hand, the Coalition has offered a $49.2 million concessional loan to the administrator to support investment in new machinery required to produce higher grade ore in the Middleback Ranges. Such a loan would be secured against the plant and equipment and repaid by the new owners.

I am advised by the Steel Taskforce that this investment project is just one of several measures required at Whyalla to improve the commercial viability of the mine and the steelworks. While this project is the most advanced and can most speedily return cashflow to the operations in South Australia—and I thank the commonwealth government for their investment—it alone will not be sufficient to ensure the long-term viability of the steelworks.

I note with interest that the federal member for Grey, Mr Rowan Ramsay, yesterday commented that the $49.2 million proposal was not 'the last offer on anything', and I look forward to further announcements from the federal industry minister (Chris Pyne) and the Prime Minister. We have been working hard to support the people and businesses of South Australia's second largest regional centre and to ensure that Arrium can emerge as soon as possible from administration.

I look forward to further updating the house with more information as the process to secure jobs and the future of Whyalla's workforce continues. I add my personal condolences to the family of Jim Pollock to those of his friends in the community. He was a fine servant of the people of Whyalla. He served our state with distinction. He was a true gentleman and he will be sadly missed.

Honourable members: Hear, hear!