Questions Without Notice: Steel Industry

14 November 2019

Senator Patrick: My question is to the Minister representing the Minister for Industry, Science and Technology, and concerns the government's support for steel manufacturing in Whyalla. Is it not the case that, as one of only two integrated steelworks in Australia and as Australia's only manufacturer of special-grade billet and steel long products, GFG's Whyalla steelworks is a vital economic and national security asset? Is it not the case that the 22,000 people of Whyalla remain critically reliant on the iron and steel industry? Has GFG approached the government seeking support for their plans to expand Whyalla steelworks operations to guarantee that this key national asset continues to operate in the future? If so, what has been the government's response and what Australian government support will be forthcoming for the steelworks and people of Whyalla?

Senator Cash (Minister for Employment, Skills, Small and Family Business): I thank Senator Patrick for the question and for prior notice. Senator Patrick, I've been able to obtain the following information for you. As to the proposal that you refer to, I am advised that no formal request for assistance has been submitted by the GFG alliance to the government to date. The Morrison government, together with the South Australian state government, continues to engage in good faith with GFG regarding the future of the Whyalla steelworks. We want the best outcomes for the people who work at the Whyalla steelworks and the local community. We recognise that the community is dependent, as you yourself have pointed out, on the continued operations of the steelworks. The government will continue to work constructively with GFG and the South Australian government to explore potential options to support the Whyalla transformational plan and ensure a sustainable and globally competitive steel industry in Whyalla. I am instructed, though, that, until a formal proposal is actually put to the government, it would not be appropriate to speculate on what support could or would be forthcoming. I'm also advised that the government would judge any proposal on its merits, taking into account in a range of factors.

And of course, just like you, Senator Patrick, the government is extremely cognisant of the value of Australia's steel industry and of the steelworks in Whyalla to our nation and to the local community. I also agree with you that GFG's Whyalla steelworks and the unique steel it produces are indeed vital assets to our nation. Like structural steel itself, the steel industry is the foundation upon which many industries are built. It directly contributes almost $11 billion to Australia's GDP and employs around 100,000 people. Certainly, the Morrison government is backing and advocating for the steel industry, as evidenced by—

The PRESIDENT: Order, Senator Cash. Senator Patrick, a supplementary question?

Senator Patrick: In July, the Deputy Prime Minister and the finance minister announced that 6,000 tonnes of rail manufactured in Whyalla had been delivered for the Inland Rail project. GFG has a $20 million contract to provide 14,000 tonnes of rail. Just what percentage of the 262,000 tonnes of steel needed for the Inland Rail project will be sourced from Whyalla?

Senator Cash (Minister for Employment, Skills, Small and Family Business): I advise as follows. The Whyalla steelworks is a key supplier of steel for many Australian rail projects, including our $10 billion Inland Rail project. The Inland Rail is a great national infrastructure project that reflects our ongoing commitment to nation building and to improving our transport and freight networks. I can provide some clarity on the contracts awarded so far. In July 2019, the Australian Rail Track Corporation awarded a $31 million contract to GFG, which, of course, owns the Whyalla steelworks, to supply steel rail for the next stage of Inland Rail construction—considerably more than the Liberty steel contract that the senator referred to. I also point out that this builds on the $20 million contract awarded to GFG in December 2017 to supply the Parkes-to-Narromine section of Inland Rail.

The PRESIDENT: Senator Patrick, a final supplementary question?

Senator Patrick: What action has the Australian government taken to ensure that Australian steel from Whyalla will be used in the new high-voltage transmission projects around Australia, including the ElectraNet high-voltage interconnector planned to connect the South Australia and New South Wales electricity grids? Would you not agree that using imported steel would be contrary to the national interest?

Senator Cash (Minister for Employment, Skills, Small and Family Business): Again, Senator Patrick, I acknowledge that you are a strong advocate for your state and I certainly understand your desire to see the interconnector built and running. South Australia does need access to a more reliable power grid. I can advise that in September this year the Morrison government provided Ferretti International a $600,000 grant to support a feasibility study to develop transmission-tower manufacturing in Whyalla using steel from the Whyalla steelworks. The outcome of the feasibility study is due to be completed by the end of the year. Ferretti may then seek to participate in the tender process to supply transmission towers to the New South Wales-SA interconnector, the EnergyConnect project. We would certainly welcome that outcome and we have been pleased to provide the basis on which the study and a possible tender could be forthcoming. It is ultimately, of course, a decision for the EnergyConnect project proponents.

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