Date: Thursday, 8 April 2021
David Bevan: Minister for Finance, and he joins us now. Good morning, Simon Birmingham.
Simon Birmingham: Hello, David. Thanks for the opportunity.
David Bevan: Simon Birmingham we asked you to come on, and we appreciate you squeezing us in, because of Whyalla. There’s talk once again of the state and federal governments having to have a Plan B up their sleeve. That is, if it could. Nobody knows how these court cases with the Gupta chain of companies is going to work out, but you need to be prepared to maybe step in and help out the workers in Whyalla. Are you able to explain to our ministers because you’re the finance minister? Well, what’s being considered?
Simon Birmingham: Thanks, David. Well, I think first and foremost is reassurance to the people of Whyalla, particularly the workforce in Whyalla, to know that governments are monitoring this situation very closely and indeed doing the type of contingency thinking and planning that that would be prudent in these sorts of circumstances. Now, first and foremost, everyone, I think, just wants to see Whyalla succeed and wishes Mr Gupta and GFG group success in their refinancing operations. And they say that they are in an advanced stage of due diligence around some different refinancing proposals. And so hopefully that will proceed smoothly. And we do wish to see them do well. But of course, governments do need to be mindful of the experiences we’ve seen before when Whyalla has moved into administration, where we did have to provide some financing options for the steelworks that that enabled it to continue working during that period of administration. Because, of course, the way the legal obligations work on administrators is such that they have to be very cautious about what extra debts they accrue whilst they’re in the process of paying out the existing liabilities and trying to find new owners. And so that is something that government has looked at in the past and that working closely with Steven Marshall and the state government, our government continues just to make sure we are looking at those examples from the past and being mindful of how we could respond if we need to, depending upon how these legal matters and financing matters proceed.
David Bevan: Right. So the way what’s your advice? How’s it been explained to you this will pan out? If you do have to have some money or some support or whatever, ready for the workers in case it all goes belly up. What’s the timeline here if you’ve been told it’ll be months or years before anything like that could be called on?
Simon Birmingham: But we’re looking at matters certainly that wouldn’t unfold for likely months. The New South Wales Supreme Court is scheduled to hear, have a first hearing in relation to the application that’s been made by Citibank on behalf of Credit Suisse. That hearing scheduled for the 6th of May. So around one month away, we would anticipate that to only be an initial hearing. So there would be potentially quite some legal process based on what Mr Gupta and GFG group have indicated before there could be a legal determination to put them into administration. And through all of that time, as I said before, we need to be ever mindful that GFG keeps indicating publicly that they are talking to alternative financiers. They say those discussions are going well and they’re working through advanced stages of due diligence. So I think we need to try to maintain as much confidence as we can in the Whyalla community that this business is operating more profitably now than it has in the past, that its owners are speaking with a degree of confidence and that though these legal uncertainties hover over it because of some very complex global financial mechanisms that have been brought into play, hopefully GFG can and based on their public statements, we should have some degree of confidence that they will navigate this situation themselves without the period of administration and uncertainty.
David Bevan: What about the federal government intervening in this matter in terms of sovereign capability? And that is the federal government saying, well, you know what, we’re not going to allow this group of companies to be broken up and sold off piecemeal because it’s viable all together and we need a viable steel industry. So sorry, guys, you’re not going to be allowed to break it up. Could that happen?
Simon Birmingham: Scott Morrison and our government know just how important it is for Australia to have sovereign capability to make steel, and that’s why he’s had direct discussions with Steven Marshall, why our ministers have been discussing this with Mr. Gupta and his company representatives and why it’s been the subject of such discussion along the way in terms of how we will handle this situation. In terms of the GFG group, they do have a number of vertically integrated assets or in sort of layman’s terms, very highly connected businesses of different steel operations. And I don’t believe it would be in the interests of Whyalla, Australia or the nation overall to see those different assets broken up and sold separately as a whole they provide for a more profitable business. And that is certainly an important consideration for us. But at present, there’s no application before government to see some parts of the business sold off and others go in a different direction.
David Bevan: Ok, so shorthand is it’s early days.
Simon Birmingham: It’s early days. The Whyalla community should know that, that everybody is doing all the work they should be doing to make sure that that we maintain that steel making capability for Australia. And of course, that means for Whyalla as well.
David Bevan: Simon Birmingham, Federal Finance Minister, thanks for your time.
Simon Birmingham: Thank, David. My pleasure.