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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-10-29 Daily Xml
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Grievance Debate

Hydrogen Power Plant

Mr PATTERSON (Morphett) (15:09): Nearly half a billion dollars, that is the combined total of spending and liabilities that South Australian taxpayers could be on the hook for, from the Malinauskas Labor government's failed hydrogen plant. That is what the independent Auditor-General has confirmed, and it just reinforces why the Liberal opposition has been calling out the Premier's hydrogen fantasy for years.

The Malinauskas Labor government has gambled and lost on their hydrogen fantasy. The Auditor-General's Report has shown that $285.2 million was spent in just three years on a hydrogen project that is now on the scrap heap, and most of that money will never be recovered. More than $63 million has been blown on wages and general expenses, and another $85.7 million has been written off in costs that, in the Auditor-General's own words, provide no immediate future economic benefit.

But, unfortunately, the pain is not over for taxpayers. South Australian taxpayers could still be on the hook for another $212 million in contracted commitments and contingent liabilities. This all means that the combined total of spending and future commitments and liabilities is nearly half a billion dollars for the now-shelved hydrogen power plant, a once in a generation waste of money. Remember that this was a project that was meant to deliver cheaper power and jobs, but instead it has delivered nothing but debt, disappointment and deception.

Let us cast our minds back to 2021. The Premier promised a hydrogen power plant to produce electricity that would bring down wholesale power prices by 8 per cent, for a total cost of $593 million. Instead, 3½ years later household power bills have skyrocketed by 43 per cent. Under this state Labor government, South Australians have paid record high power bills. The Premier loves to say that the hydrogen power plant had to be shelved because the Whyalla Steelworks was not going to be a customer, but in early 2024 he stood in front of the cameras claiming, 'We've got our own customer for the hydrogen we produce and that will be the power plant itself.'

Now we find out that there was never going to be any hydrogen to sell to the steelworks because there were no hydrogen electrolysers and no storage infrastructure even ordered. That was confirmed by the Auditor-General. There was no plan and there was no customer. What a complete and utter shambles. The state Labor government rushed headlong into early contractor involvement rather than conducting a proper front-end engineering design. This reckless decision cost taxpayers $85.7 million alone, again, the Auditor-General made it clear, for no future economic benefit.

Perhaps, if the state Labor government had followed a traditional staged approach, the highly energy intensive and inefficient process and the flaws in their hydrogen power plant would have been obvious before hundreds of millions of dollars of taxpayer money was spent. Instead, spinning as hard as the turbines he is privatising, Turbine Tom tried to hide this disaster from South Australians for the last three years, pretending the project was on track and claiming the budget remained at $593 million in the budget papers, when in reality we know that costs were skyrocketing past $1 billion.

Of course, when the Whyalla Steelworks fell into crisis, the Premier used that as a scapegoat to kill his failing project. If that was not all bad enough, as one final goodbye, the Office of Hydrogen Power SA gave a massive golden handshake to one of their executives once the project was officially shelved. The Auditor-General revealed that one mystery executive pocketed over $830,000 last financial year. That is an eye-watering amount to pay an executive on a project that is going nowhere fast.

This amount could have paid for 10 nurses or teachers or police officers. It is an absolutely shameful waste of South Australian taxpayer money, all while under Labor South Australians have paid the highest power prices on record. It is no wonder that hundreds of millions of dollars have been sunk into the Premier's hydrogen fantasy when the people running it were paid exorbitant amounts for a project that went nowhere.

Of course, the government is now trying to spin this away with tricky accounting and creative language, claiming that the privatisation of their own turbines will fix it, but the Auditor-General identified a large amount of money that will never be recovered. That money should have been invested into building infrastructure that delivers reliable and affordable electricity. The state Liberal team has a policy focused on securing gas-fired power generation into the future to keep South Australia's lights on and stop Labor's power price spiral.