House of Assembly Fifty-Fourth Parliament, Second Session (54-2) 54 2 Parliament of South Australia House of Assembly published Grievance Debate GFG Alliance GFG Alliance Mr HUGHES House of Assembly Giles Mr HUGHES (Giles) (15:34): I rise today to speak about the steel industry in Whyalla and some of its wider implications. The last time I spoke in this chamber was a fortnight ago, and at the time I said the financial arrangements that had been entered into by GFG with Greensill were complex, that it was an evolving set of circumstances and that it would be some time before we had clarity. We are still in that position, even though there is a lot more information now available. We are still facing a complex set of arrangements, the full implications of which will take time to work out. I was very keen to get the Leader of the Opposition to Whyalla, and the leader was very keen to get up to Whyalla, and he did so last Friday. While there, we met with local management at GFG, with contractors, with workers, with unions, with the council and with the chamber of commerce. Clearly, there is uncertainty. Some people are concerned and some people are positive that we will get through this. I am on the record as saying that Whyalla has been through a lot of major challenges. We have always risen to those challenges and we have got through them, so we are battle hardened. The group that often feels the most vulnerable is the contractors, given they are potentially owed money and the consequences if things do not go in the right direction. They often bear a real burden, so we do not want to see that happening. The potential outcomes at this stage could be very variable indeed. We know that GFG was engaged in negotiations about alternative finance a good period before Greensill went into insolvency. The simplest solution would be if GFG was to secure alternative finance, but that is not a guaranteed outcome. At the moment, the steelworks and the mines in Whyalla are doing well. The order books are full. Iron ore is fetching a very decent premium, so a profit is being made. The steelworks is in the black and it is producing at full capacity, but there are a number of factors that underpin that. We thought when we were going into COVID-19 that it would have a depressive effect on steel demand but, given the size of the stimulus in the economy, it has actually led to significant steel demand. Added to that is the fact that COVID-19 has put a constraint on steel imports into the country. The stimulus package is not going to last, so hopefully we will eventually get to a period where things are a bit more normalised and we might see more steel come back into the country. We need to take a longer term view when it comes to steel procurement in this country, whereby the national government needs to introduce a steel procurement policy for all taxpayer-funded projects. Indeed, as a backbencher here in 2015, Premier Weatherill asked me what my priority was and I said it was to change steel procurement policy in South Australia. We did that and got it to the point where the Australian Steel Institute, the peak body for the fabricators and the steel industry in this country, said that this was the best procurement policy in the nation. We need to do something like that at a national level instead of the very ad hoc approach we have now. I emphasise again and again that Whyalla has the only integrated steelworks in the country that produces structural steel and rail. We need to support it as an industry and we need to ensure that it is sustainable well into the future. There are a whole range of approaches we could take to make sure that does happen, but it requires the national government to come to the party, to implement a steel procurement policy and to put Australian steel producers first, rather than foreign steel producers.