Whyalla steelworks remains 'fiscal risk' in budget as SA waits for freight bypass funding

A view from near the blast furnace of the Whyalla steelworks in March 2025. (ABC News: Che Chorley) The Whyalla steelworks remains listed as a "fiscal risk" in the federal budget despite hundreds of millions in state and federal financial support. The plant's blast furnace remains offline, with fears a permanent shutdown could require more public funding and job losses. Meanwhile, the budget contains no new funding for the $1 billion Greater Adelaide Freight Bypass amid an ongoing dispute over the state and federal funding split. Link copiedShareShare articleThe federal government's hundreds of millions of dollars in support for the Whyalla steelworks remains a "fiscal risk", according to the budget papers, as the state government warns it may need extra funds if the plant's struggling blast furnace permanently shuts. The budget papers handed down on Tuesday revealed the federal government had committed a total of $409 million in 2025/26 and 2026/27 to support the steelworks through administration as well as local creditors that remained out of pocket. The state government, which stripped the steelworks from British industrialist Sanjeev Gupta's ownership in February 2025, is hoping a new buyer will take the steelworks out of administration in the second half of this year. Whyalla steelworkers are struggling to get the city's blast furnace producing iron again, with SA Premier Peter Malinauskas saying he is "very concerned" about the situation. But the federal government's support for the facility remained listed as a "fiscal risk" in the budget papers — as it did in last year's budget. It also comes amid serious concerns about the steelworks' aging blast furnace, which has been offline since early April. SA Treasurer Tom Koutsantonis said the total state and federal rescue package for Whyalla remained about $2.6 billion and any extra funding would depend on "when the sale process is completed". "The blast furnace is going through a lot of difficulties," he said. A worker inspects steel products at the Whyalla steelworks. (ABC News: Lincoln Rothall) "Depending on what happens there and its production rate will of course impact our ongoing subsidies to the administrator [KordaMentha]. "If the blast furnace is unable to be saved then we're going to have to have obviously talks about what we do with the employees pending the recapitalisation and the sale. "I think it's fair to say it's fully funded up until the sale process, which is when the new owner should take over the cost and operation of the steelworks." Federal budget 2026: Stay up to date with the budget aftermath in our live blog. Asked if he was concerned the steelworks remained listed as a fiscal risk, Mr Koutsantonis said: "Of course it is." "Things can go wrong; there are very uncertain economic conditions internationally because of the war in Iran," he said. SA Treasurer Tom Koutsantonis will hand down the state budget on June 4. (ABC News: Lincoln Rothall) "It is a risk, but we've got a very robust sales process." As of February, five shortlisted parties were in the running to purchase the steelworks, including BlueScope Steel. Mr Koutsantonis will hand down the state budget on June 4. Roger Jordan, a contractor who does work at the steelworks and associated mines, said the community in Whyalla was hoping for more information. "And I think the general public are frustrated that we don’t 100 per cent know what's going on at the blast furnace. "But we have to trust the blast furnace workers and their management to bring us out of this situation." KordaMentha has been contacted for comment. Whyalla business owner Roger Jordan supplies communications equipment to the steelworks as a contractor. (ABC News) The federal budget did not contain many revelations for South Australia, with no new funding allocated to the $1 billion Greater Adelaide Freight Bypass. The project — which includes a bypass of the Truro township, duplication of the Swanport Bridge near Murray Bridge, and various upgrades between Monarto and the Sturt Highway — would divert some trucks off the South Eastern Freeway and around Adelaide. But the state government argued it should be funded 80/20 by the federal government. "We're sticking to our guns on that," Mr Koutsantonis told 891 ABC Adelaide, adding that the federal government had moved to a 60/40 funding split. "The real benefits are on national resilience and national freight improvements; it allows much larger trucks to go across the country from north to south and east to west. The federal Coalition took an 80/20 split of the freight bypass project to its unsuccessful 2025 election campaign. SA shadow treasurer Ben Hood accused the state government of being "flat-footed" on the project. "We've seen billions of dollars go to Victoria to prop up their rail loop," Mr Hood said. "Yet here in South Australia, Tom Koutsantonis and [Premier] Peter Malinauskas, have not been able to kick heads in

Whyalla steelworks remains 'fiscal risk' in budget as SA waits for freight bypass funding

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