House of Assembly Fifty-Fifth Parliament, First Session (55-1) 55 1 Parliament of South Australia House of Assembly published Question Time Whyalla Steelworks Whyalla Steelworks Mr PATTERSON House of Assembly Morphett Whyalla Steelworks Mr PATTERSON (Morphett) (14:14): My question is to the Minister for Energy and Mining. How much, if any, taxpayer money constitutes a top-up and how many, if any, top-ups will the government provide to fund the Whyalla Steelworks administration? With your leave, sir, and that of the house, I will explain. Leave granted. Mr PATTERSON House of Assembly Morphett Mr PATTERSON: The ABC reported yesterday that the Minister for Energy and Mining said, and I quote, 'If there needs to be top-ups, there will.' The Hon. P.B. MALINAUSKAS House of Assembly Croydon Premier The Hon. P.B. MALINAUSKAS (Croydon—Premier) (14:15): I thank the shadow minister for in some respects answering his own question with the minister's remarks. Mr Patterson House of Assembly Morphett Mr Patterson: What is the top-up? The Hon. P.B. MALINAUSKAS House of Assembly Croydon Premier The Hon. P.B. MALINAUSKAS: A top-up— Members interjecting: The Speaker House of Assembly The SPEAKER: Members on my left! Members interjecting: The Speaker House of Assembly The SPEAKER: The Minister for Education is warned. Members on my left will come to order. The Hon. P.B. MALINAUSKAS House of Assembly Croydon Premier The Hon. P.B. MALINAUSKAS: A top-up is an additional investment over and above what is occurring in the first tranche. This government has been transparent about the fact that the administration process— The Hon. D.G. Pisoni House of Assembly Unley The Hon. D.G. Pisoni: If you're transparent, how much is it? The Hon. P.B. MALINAUSKAS House of Assembly Croydon Premier The Hon. P.B. MALINAUSKAS: We have been very clear about the fact and transparent about the fact that the administration process will last longer than six months, in our view. We don't have reason to believe that it will be shorter than 12 months, in our view. I hope it is. That would be good, but I think it would be unwise to assume that will be the case. Therefore, there will need to be extensions of the funding associated with the administration. The $400 million figure was nominally allocated towards the first six months and then it will be extended from there. In terms of how much that will be, of course that will be a decision for us, in conjunction with the commonwealth, as time evolves because that number will move. The reason it will move is we always anticipated that the first part of administration would be more expensive than the second, for the reasons I alluded to earlier. We went in with more than a sense, but certainly a view or a considered opinion, that there would need to be money expended quickly in the business to do the most basic of functions: care and maintenance in the first instance which, once it is done, hopefully doesn't need to be done as frequently in the future. One of the reasons why the business was becoming more uneconomic or unprofitable was because it was starting to rob Peter to pay Paul and, because basic work hadn't been done in the capital sense, it was becoming more expensive and more inefficient to run. By investing in the business, including with the good news that the steelworks is now employing more people—they are out in the market seeking to employ people so that, rather than spending all the money on overtime, they are actually spending money on basic rates on a day-to-day basis. These are elementary things, but they bring with them costs. Recruiting staff is more expensive than retaining staff. We always anticipated that the first part would be particularly expensive. KordaMentha are keeping us regularly advised of that but, when those decisions evolve and as those times come, we will be doing that. But what matters most to people in Whyalla and everyone associated with this enterprise is that we are here as a steady hand in government. We will allocate the resources that are required to achieve our strategic objective, and the strategic objective is stabilisation of the business, get it in a state where it is ready for sale and then partner with a new owner so that we can see the whole business transformed so it is able to stand on its own two feet and wash its own face. That is the plan. Now, there are a million things that could go wrong along the journey, because it's complex, it's a big enterprise, world steel markets are in a state of flux and we see decisions being made around the world, around steel in particular, because it is so important for individual countries' economies. We have got obviously the Trump administration making decisions around tariffs. There is a lot happening, but all of that only demonstrates why we need sovereign steelmaking and why the government has got a role to play. To that end, I think this government has demonstrated its bona fides and just how serious we are to invest in sovereign steelmaking in this country, and I am very, very grateful that we have got a partner in the federal government to that end. I also take the chance to acknowledge that the alternate Prime Minister of the nation has said on the record that he too is committed to sovereign steelmaking, which hopefully demonstrates that this is an important area of policy where all governments of all persuasions should be committed.