The South Australian Political Landscape

[Dutchy]

Does that make it viable though? Guess we will find out.

[dedja]

Going through the numbers, the State Govt has been extremely smart here.

They had $593M provisioned for the Hydrogen plant which is never going to be mentioned again, but have spent a bit running an associated office, so let’s say $550M is still provisioned but not spent. They also had at least $50M in incentive payments for GFG which was never spent. So there’s $600M already provisioned within existing budgets.

They have committed $50M to immediately assist creditors not aligned to GFG companies, and half of the anticipated $400m to cover the Administrator and operating the steelworks during Administration.

The $1.9B to complete the $2.4B package is provisioned for financial assistance to a future owner, which may or may not be found, and is expected to be largely, if not completely funded by the Feds.

So, in effect, the State Govt has only committed less than half of the funds it had already provisioned ($250M of approx $600M) to the the $2.4B assistance package, gets the goodwill of ‘saving’ the steelworks (which is yet to be seen whether this actually eventuates), pays the creditors hurting most, gets rid of Gupta and his companies, kills an unpopular Hydrogen Plant initiative, and basks in the glory of being a saviour, whilst arranging for the Federal Govt to take all the financial risk.

Genius!

[tigerpie]

Its good they are helping out, but the question still remains, is there a long term future for the steelworks? If not they need to cut losses and stop chucking in our taxpayer money to something that will fall over eventually anyway.

Im told there is no difference in quality between imported steel and australian steel, but guess which one is significantly cheaper?

Is all this to save 4,000 jobs now?

You've got to be joking surely.
Have you not heard the term chinesium?

Cheap shit steel, very difficult to weld or heat treat, nigh impossible to machine economically.
If I'm a shipbuilder or submarine, or bridge builder etc. I'm using Australian steel all day everyday.
There is a lot at stake here and I'm certain a lot of very smart people have delved into the books to see production tally's v man hours. Not just 4000jobs, a whole bloody town which has fed so much to the states economy for the last hundred years.
I'm ok with using my tax dollars to during up our steel industry.
I'm glad this has been sorted now because my fear if the liberals win the election they'd do to the steel industry what they did to the car industry.
If both govts, red or blue had an inkling of nonprofitability they would not have funded the administration.

[tigerpie]

Going through the numbers, the State Govt has been extremely smart here.

They had $593M provisioned for the Hydrogen plant which is never going to be mentioned again, but have spent a bit running an associated office, so let’s say $550M is still provisioned but not spent. They also had at least $50M in incentive payments for GFG which was never spent. So there’s $600M already provisioned within existing budgets.

They have committed $50M to immediately assist creditors not aligned to GFG companies, and half of the anticipated $400m to cover the Administrator and operating the steelworks during Administration.

The $1.9B to complete the $2.4B package is provisioned for financial assistance to a future owner, which may or may not be found, and is expected to be largely, if not completely funded by the Feds.

So, in effect, the State Govt has only committed less than half of the funds it had already provisioned ($250M of approx $600M) to the the $2.4B assistance package, gets the goodwill of ‘saving’ the steelworks (which is yet to be seen whether this actually eventuates), pays the creditors hurting most, gets rid of Gupta and his companies, kills an unpopular Hydrogen Plant initiative, and basks in the glory of being a saviour, whilst arranging for the Federal Govt to take all the financial risk.

Genius!

Hydrogen is going to be heard again as it's a key to producing green steel along with the electric arc furnace.
Firstly though it is ensuring the sustainability of the steelworks. Once that is established then it's all hands on deck.
I think the arc furnace is still 12- 18months away. This is the future.

This places Australia in a prime position in the international steel industry.

[Dutchy]

Its good they are helping out, but the question still remains, is there a long term future for the steelworks? If not they need to cut losses and stop chucking in our taxpayer money to something that will fall over eventually anyway.

Im told there is no difference in quality between imported steel and australian steel, but guess which one is significantly cheaper?

Is all this to save 4,000 jobs now?

You've got to be joking surely.
Have you not heard the term chinesium?

Cheap shit steel, very difficult to weld or heat treat, nigh impossible to machine economically.
If I'm a shipbuilder or submarine, or bridge builder etc. I'm using Australian steel all day everyday.
There is a lot at stake here and I'm certain a lot of very smart people have delved into the books to see production tally's v man hours. Not just 4000jobs, a whole bloody town which has fed so much to the states economy for the last hundred years.
I'm ok with using my tax dollars to during up our steel industry.
I'm glad this has been sorted now because my fear if the liberals win the election they'd do to the steel industry what they did to the car industry.
If both govts, red or blue had an inkling of nonprofitability they would not have funded the administration.

Why is nearly every building going up in our city using steel from Asia then?

[tigerpie]

Its good they are helping out, but the question still remains, is there a long term future for the steelworks? If not they need to cut losses and stop chucking in our taxpayer money to something that will fall over eventually anyway.

Im told there is no difference in quality between imported steel and australian steel, but guess which one is significantly cheaper?

Is all this to save 4,000 jobs now?

You've got to be joking surely.
Have you not heard the term chinesium?

Cheap shit steel, very difficult to weld or heat treat, nigh impossible to machine economically.
If I'm a shipbuilder or submarine, or bridge builder etc. I'm using Australian steel all day everyday.
There is a lot at stake here and I'm certain a lot of very smart people have delved into the books to see production tally's v man hours. Not just 4000jobs, a whole bloody town which has fed so much to the states economy for the last hundred years.
I'm ok with using my tax dollars to during up our steel industry.
I'm glad this has been sorted now because my fear if the liberals win the election they'd do to the steel industry what they did to the car industry.
If both govts, red or blue had an inkling of nonprofitability they would not have funded the administration.

Why is nearly every building going up in our city using steel from Asia then?

Why do you think?

[Dutchy]

Because it is as good as Aussie steel and is cheaper

[Trader]

Haven't followed it closely, so a couple of questions from someone ill--informed.

1) The $50m the government is giving to the small creditors who are not linked to GFG. How does this work?
The government has said they are not paying GFG's debts for them.
But isn't that exactly what a creditor is, someone who GFG has a debt with?
So if the government pays the small creditor, but isn't paying GFG's debt for them, does that mean the government expects to get that $50m back from GFG? And if so, how? Seems GFG is basically insolvent so not sure how you're going to get another $50m out of them, on top of what they already owe.

2) The new legislation that brings the Government's money to the top of the pile, and the first to be repaid. How exactly does this work?
Does this effectively mean that instead off all creditors being in it together, the government has rammed through new laws, that effectively take it from all creditors taking a hit, to the government guaranteeing their own money back from their previous investments, and bad luck to the other big and medium sized creditors (noting the small guys are covered in 1 above) who now have to wait behind the government who will get the full 100c back on every dollar before the businesses can then get a slice of the much smaller pie that's left behind?
Or does this 'new' legislation only count for the next round of government investment, and the previous money the government has sunk in / is owed in royalties, remains in the same spot in the queue as everyone else?
I clearly don't have the details on this one, hence the question, but for mine, it could, could, be that rather than taking accountability for their previous decisions to invest in GFG which have been proven to not be a great move, rather than taking their medicine and copping the L, they have potentially instead decided to re-write the rules, and screw over the other creditors, to save their own face, and in turn are trying to spin it as saving the taxpayers investment!

Interested to know from those following it more closely if they can explain a bit on either of the two items above.

[MW]

Because its cheaper

EFA

[dedja]

The State Govt is directly funding those non-GFG company aligned creditors, and those creditors will have no recourse with the Administrator, so in this sense, the Govt is paying for GFG’s debt here, but that’s where it stops. In reality, these creditors would have been on the bottom of the creditor list and were unlikely to receive anything. All in all, $50M well spent.

The legislation the State Govt rushed through yesterday allowed them to place GFG into immediate administration, and place the Govt at the top of the creditor list. It’s a provision of Corporations Law that the Govt ‘exploited’. Without it, they would have had to pursue GFG through the courts which would have dragged the issue for months.

By taking the non-GFG aligned creditors out of the Administrator equation, that effectively means that the creditors left are the State Govt and all GFG associated companies. Gupta was moving money between his companies at the expense of the steelworks, so now these companies are at the mercy of the Administrator. So the State Govt faarked them, great work.

The Administrator will assess financial and operational performance of the steelworks, which includes identifying the creditors and the nature of the associated amounts owed to them. As stated above, the actions of the State Govt effectively means the Administrator will only be considering SA State Govt and GFG related companies as creditors.

As the State Govt is the no.1 creditor, the Administrator must repay the Govt before any of GFG companies. The Govt will pursue debts such as SA Water payments, royalties, etc.

So to summarise, the State Govt has moved to protect all the creditors not aligned to Gupta and his companies, and itself. Gupta’s companies (GFG and associated entities) are now last on the list.

[Trader]

Does the $50m cover all non-GFG linked creditors?

If not, then there will potentially be private companies who get screwed in this?

And if so, is a $2.4B package suitable for what is essentially a $50m debt?
Seems the government is spending $48 for every $1 owed to the non-gupta creditors?

[dedja]

Does the $50m cover all non-GFG linked creditors?

If not, then there will potentially be private companies who get screwed in this?

And if so, is a $2.4B package suitable for what is essentially a $50m debt?
Seems the government is spending $48 for every $1 owed to the non-gupta creditors?

Gupta’s companies were running the steelworks into the ground, stripping out profits and moving them offshore to help prop up his other companies.

The Govt stepped in before it was too late the save the steelworks. Their aim is to repay the non Gupta aligned creditors, stabilise the steelworks operations, make sure everyone is being paid from now on, and find a new buyer to run operations sustainably. The Administrator was appointed to do this.

$2.4B assistance is made up of:

$100m: Immediate, on the ground support
· Creditor Assistance payments ($50m)
· Infrastructure upgrades ($32.6m)
· Jobs Matching and Skills Hub ($6m)

$384m: Stabilising the Steelworks
· The State and Federal Governments are co-investing $384m to fund the Whyalla Steelworks’ operations during administration. This funding will ensure workers and contractors will have ongoing work at the Steelworks and will continue to be paid.

$1.9bn: Investing in the Steelworks’ future
· The State and Federal Governments will work with a new owner to invest in the upgrades and new infrastructure which will be vital to ensuring the Steelworks has a sustainable, long-term future.

[tigerpie]

Sanjeev Gupta as described in the media as a billionaire.
So to me they are saying he personally is a billionaire.

There would have to be some sort of money trail to confirm that?.
If so then surely he can be held accountable and use some of his billions to pay his bills.
Sell anything he has a share in and take any cash.

Or the media become more accurate and refer to him as disgraced broke Sanjeev Gupta.

[dedja]

As long as you don’t violate the Australian Corporations Act, it’s easy to protect your personal wealth through company entities.

Gupta is not personally liable for any of his company dealings, again, as long as he has abided by the Corporations Act in his role in any of his companies in Australia.

If he has personally violated that Act, he is fair game, but I doubt he’s that stupid.

[shoe boy]

Tarzia on radio this morning is an absolute train wreck!

The liberal party surly can find anyone better than this flog or maybe not.

[Booney]

Because it is as good as Aussie steel and is cheaper

It's one of those but not the other.

Ask anyone who works in commercial construction if they'd buy an apartment in any of the high rises going up around town.

[mighty_tiger_79]

On AA Husic just said he's been talking to Kouts for best part of a year worried about Whyalla

[Booney]

Tarzia on radio this morning is an absolute train wreck!

The liberal party surly can find anyone better than this flog or maybe not.

If you've ever heard a man out of his depth.

[Brodlach]

Tarzia on radio this morning is an absolute train wreck!

The liberal party surly can find anyone better than this flog or maybe not.

That was hilarious, absolutely a train wreck. Did not answer a direct question, no point having him on as he will be in a retirement home by the time the Libs are in office. Gave nothing to his supporters.

Tarzia- hydrogen plant is no good, labour lied,

Tarzia also - we cannot confirm if we will cancel the hydrogen plant as we don’t know enough about it. We will announce our policy when we have one.

FFS.

[Booney]

Tarzia on radio this morning is an absolute train wreck!

The liberal party surly can find anyone better than this flog or maybe not.

That was hilarious, absolutely a train wreck. Did not answer a direct question, no point having him on as he will be in a retirement home by the time the Libs are in office. Gave nothing to his supporters.

Tarzia- hydrogen plant is no good, labour lied,

Tarzia also - we cannot confirm if we will cancel the hydrogen plant as we don’t know enough about it. We will announce our policy when we have one.

FFS.

Can you imagine Koutsantonis and the Labor media team sitting in Mali's office listening to that and laughing their collective heads off?

Kouts crack at Vinnie in parliament yesterday was brutal.