Treasurer Stephen Mullighan spends big on Whyalla steel in 2025-26 South Australian budget

The troubled Whyalla steelworks, law and order and a bold bid to bring the mammoth COP31 climate conference to Adelaide are the big winners from South Australia's pre-election budget.
Treasurer Stephen Mullighan has promised $650m over six years for the steel plant as part of a $2.4bn 'sovereign steel package' backed by the federal government.
In his speech to the state parliament on Thursday afternoon, Mr Mullighan outlined where the money would go and said the allocation would preserve the state's industrial capacity.
'Our unprecedented intervention to place the Whyalla steelworks into administration has protected thousands of jobs, hundreds of businesses and ensured Australia remains a country that manufactures critical steel products,' he said.
'Under this government, South Australians will not be taken for fools by fast-talking businessmen that continually break their promises to our state … the ($650m) funding is for administration costs, investment in the plant to support the sale and for a comprehensive rescue package that safeguards the Whyalla community.'
The state government took control of Whyalla from British steel magnate Sanjeev Gupta in February and administrators KordaMentha are working to secure a buyer for the integrated plant.
Before the shock takeover, the steelworks suffered losses for months and the government grew increasingly sceptical Mr Gupta's GFG Alliance would meet its debt obligations.
The steelworks is a core economic engine for Whyalla, a town of 22,000 people, and the state more broadly.
It is Australia's only fully integrated steelmaking enterprise, producing slabs, billets, hot rolled structural steel and rail products.
Thursday's budget comes about nine months before the Labor government, led by Premier Peter Malinauskas, will return to the polls in March next year.
In a pre-election pitch, Mr Mullighan said the budget preserved the state's industrial capacity, supported farmers battling through punishing drought conditions and demonstrated the government's 'sound financial management'.
'We are the lowest taxing state on the mainland,' Mr Mullighan said.
'And we have kept our promise not to introduce new taxes or increase existing ones.
'We've done all this while returning the budget to surplus and improving the state's credit rating outlook.'
The budget delivers a surplus of $179m for 2025-26 and forecasts a $369m surplus for 2026-27 and $458m for 2027-28.
Those figures are predicated on gross state product growth rates of 1.75 per cent for 2025-26, and then 2 per cent for both 2026-7 and 2027-28.
Net debt is expected to expand from $35.5bn in 2025-26 to $48.5bn in 2028-29.
Law and order is also a big winner, with the budget delivering $172m over six years to accommodate additional sworn officers.
The state aspires to have a total sworn force of 5000 officers by 2030-31.
'While crime rates have fallen over the course of this government, we continue to toughen laws, expand our prisons and equip our police and criminal justice system with the resources needed to combat crime,' he said.
'This budget provides the largest boost to police funding in the state's history.'
A bid to lure the COP31 climate conference to Adelaide is also a standout allocation, receiving $8.3m.
A $118m cost-of-living package includes a stark boost for students.
The price of student metro card 28-day passes, which are used across Adelaide's bus, rail and tram network, will tumble from $28.60 to just $10.
The change means a student catching public transportation will pay the equivalent of 25 cents a trip.
The Liberal Party, led by Opposition Leader Vincent Tarzia, said the budget demonstrated Labor was 'out of money and out of ideas'.
Mr Tarzia said the state was now confronting a 'debt iceberg', citing the $48.5bn figure as the largest in the state's history.
'The debt iceberg will sink the dreams of future South Australians' he said.
'What's abundantly clear is that Labor is completely out of touch with the needs of South Australians and instead, is frivolously whittling away taxpayer dollars on vanity projects that don't deliver any relief from sky-high energy prices, water bills and the housing crisis.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

ABC News

39 minutes ago

• ABC News

Activists concerned as SA government offers South East for gas exploration

The South Australian government has offered land for onshore gas exploration in a move that has angered activists in a key agricultural region. The government is offering exploration licenses for the Otway Basin in the state's South East and Polda Basin on the Eyre Peninsula. SA Energy and Mining Minister Tom Koutsantonis said the Cooper Basin and parts of the state's west also had the potential for gas extraction. "We're very keen to try and exploit that as much as we possibly can to try and put downwards pressure on prices and back up our renewable-generation fleet," he said. But the potential for exploration on the Otway Basin is a cause of concern for activists in the South East, where a 10-year moratorium on fracking will be in place until 2028. Limestone Coast Protection Alliance chair Angus Ralton, who was part of the initial opposition to fracking, said he was "disappointed" in the direction the government was heading. "The climate crisis is only accelerating and governments need to be moving away from fossil fuel," he said. The acreage releases come as the Australian Energy Market Operator (AEMO) projects a shortfall in gas supply for south-east Australia from 2029. Mr Koutsantonis said renewables were sufficient "90 per cent of the time, even 95 per cent", but gas peaking plants were still needed as back-up. "Gas is an important fuel for firming our renewable resources by having reliable gas-fired generators," he said. "The more gas you have in the system, the more industry you have and the more prices drop in the National Electricity Market. "[The south-east is] an area with existing infrastructure, so it'd be cheaper to restart. "It's got distribution with the SEA Gas pipeline, which gets us to the Victorian market and the South Australian market, so there's lots going for it." Australian company Beach Energy mothballed its Katnook processing plant near Penola in 2022. "While no decisions have been made regarding the South East, Beach holds tenure close to significant infrastructure in the region and the delivery of local gas to market aligns with Beach's vision to become Australia's leading supplier of domestic gas," a Beach spokesperson said. Mr Koutsantonis said SA farmers were struggling financially in the midst of a drought and that reducing energy prices by increasing gas supply was a way to provide relief. "The drought's having a real-life impact, especially on farming communities, and a lot of people rely on industry," he said. Ken Baldwin from the Australian National University said the shortfall required action by the government to secure supply. "This could come through a number of means — by increasing the amount of gas that is produced in the district, reduce the amount of demand in the region … or to implement a gas reservation policy," he said. "As we move forward and decarbonise the economy we need to really be focusing on reducing the demand in the first instance and, if all else fails, increase the amount of supply to match the diminishing gas reserves by finding new sources of gas." Professor Baldwin said there were very few industries that could not switch to electrical forms of energy supply. "That's a very small fraction of the total demand," he said. Mr Ralton said the alliance planned to raise its concerns with the state government. "We would urge the government to reconsider their position … and not take this any further," he said. Department for Energy and Mining chief executive Paul Martyn said staff had "extensively engaged" with the community. "We've, I think, got a very good understanding of the community's views," he said. "We will expect any company that's undertaking exploration in the area to thoroughly engage with the community and to meet the highest standards." Mr Koutsantonis said community sentiment was taken into account. "Those activists didn't want fracking, so there'll be no fracking in the South East," he said. "They argued you can extract gas conventionally — this is exactly what that is." Mr Koutsantonis said the government considered fracking in the region to be "finished as a concept". "We have no plans to allow fracking in the South East," he said.

News.com.au

43 minutes ago

• News.com.au

Why Geelong's homes isn't target stacking up

Geelong's lofty target to deliver nearly 130,000 new homes by 2051 is doomed to fail unless something gives to make building apartments stack up better. An Urban Development Institute of Australia study revealed 15 projects where high density permits approved in Geelong's CBD have not yet progressed. The report detailed a $200,000 gap between the median price apartments are selling for in Geelong and the minimum price per new apartment to remain viable in an eight-storey building as construction costs escalate. The residential and mixed use approved developments include landmark projects from Gurner and Monno, a large scale built-to-rent development and the region's first vertical retirement village. Other properties have been put up for sale, such as a 14-level residential and office tower at 118 Corio St. The only major residential projects under way are an 11-storey social housing tower and the seven-storey Motif apartment complex near to the Latrobe Terrace flyover. The report, Making it Stack: Infill Feasibility in Regional Victoria, highlights the need to accelerate infill development in Geelong to meet housing goals but paints a grim picture around escalating construction costs. The report identifies key challenges such as inflexible planning frameworks and high costs, recommending greater planning flexibility, feasibility testing and incentives to support viable infill housing development, especially if they are to provide affordable housing options. Apartments and townhouses are supposed play a significant role in driving 60 per cent of the new homes in Geelong by 2050 by unlocking infill sites within existing urban boundaries. But only 20 per cent of all new dwellings are being delivered through infill areas. The cost to build apartments is typically twice the rate per square metre than houses, with interest rates, construction and labour costs, developer contributions and mandated affordable housing provisions also hurting viability. Rigid planning rules means decision-making doesn't consider feasibility alongside factors such as heritage, height and density; while urban design frameworks often set height limits below a level deemed viable for development, the study found. The research paper recommendations include allowing greater flexibility in planning rules, testing feasibility before finalising planning frameworks, updating outdated planning schemes, and trialling incentives in key precincts to support infill housing. UDIA Geelong committee chairman Nick Clements said the price point new apartments need to hit to remain viable is the biggest issue that faces building in Geelong. 'You would have to sell an apartment for greater than what a house and land package can be obtained in Gen Fyansford estate, or in Highton,' he said. Fyansford is Geelong's most expensive greenfields market. 'We really need the prices of established homes in Geelong to substantially increase before there can be a greater attractiveness for people to purchase smaller, medium density and apartment stock,' Mr Clements said. 'Interest rates haven't helped, with home prices depreciating in Geelong over the past couple of years.' The median price for existing apartments was $621,000, the study revealed, but the minimum feasible cost to sell a new apartment in Geelong was between $805,000 and $819,000. Mr Clements said the big wages on state government infrastructure projects in Melbourne was creating a local skills shortage in key trades causing labour costs to grow exponentially, while materials costs have stabilised at around 30 per cent above pre-covid levels. Hygge Property director Adam Davidson said a cost-revenue analysis revealed seven storeys was the minimum needed to feasibly build apartments in Geelong, but that would require planners showing more discretion around height or density, if more infill development was to get off the ground. 'It's easy for councils to set frameworks encouraging three to five level development because most people relate to the street level of projects,' Mr Davidson said. 'Unfortunately, because we sell apartments for less in the regions the math shows it's very difficult to deliver apartments at less than six levels in a regional context.' Mr Clements, who is senior principal town planner for Tract Consulting in Geelong, said the number of approved developments shows there's an appetite to build, but the current financial conditions don't allow it. 'The state government has made it very clear they want to see more housing in the CBD,' he said. 'The market is saying we'd love to build it, but we can't make it stack up.' Mr Clements said suburban areas, such as Pakington St North, faced the same issues. 'There's a permit for a site next to the Petrel Hotel that's a perfect example. A building was demolished because there was a permit granted for a multi-level residential and retail outcome, but it hasn't been acted upon because no-one can make it financially viable.' Mr Clements said the government had provided approval pathways bypassing councils for certain projects, but costs remained the overarching problem. 'In the suburbs we still see councillors overturn recommendations from the officers, but they're dealing with 20 dwellings here, 20 dwellings there. They're really a drop in the ocean.' Developers rely on financiers for the vast majority of projects, who assess risk based upon whether a proposal can reach certain financial milestones. 'There's very few developers that you can say are very brave to pull the trigger on various projects and they've got very good relationships with lenders that allow them to be quite bold,' Mr Clements said. City of Greater Geelong executive director placemaking Tennille Bradley said the City was continually in discussion with developers to consider how it can facilitate new apartments and mixed-use development in the CBD. Facilitating development was the primary discussion in a CBD revitalisation forum in March, Ms Bradley said. 'Many of the comments coming from the industry expressed the need for financial intervention, including property related tax consideration, to increase feasibility for development in central Geelong, in addition to possible changes to the planning controls,' she said. The Central Geelong Framework Plan (CGFP) has a goal of 16,000 new residents in central Geelong by 2050. 'Pipelines for apartments and townhouses in central Geelong are incredibly important for the growth and vibrancy of our city, and to help us achieve the housing targets given to us by the state government,' Ms Bradley said. The state government is responsible for planning decisions in the CGFP area and for all developments that are five storeys and above, Ms Bradley said. 'The City recognises that the heights in the CGFP are discretionary and many of the approved projects exceed the recommended heights in the plan for various reasons, one of which being to ensure feasibility.' Ms Bradley said the City continues to advocate for good development outcomes in central Geelong. 'High quality projects that provide high amenity to the community and adequately integrate with the streetscape to ensure an attractive, liveable and vibrant city centre are important to Council, central Geelong residents, the Greater Geelong community and developers,' she said. 'The Mayor continues to advocate for better economic frameworks for central Geelong developers to make sure that approved projects can progress and contribute to additional housing in Geelong.'

ABC News

an hour ago

• ABC News

Shiraz hits dry patch as wine drinkers opt for sweeter whites like moscato

An oversupply of shiraz grapes and young drinkers trending towards lighter whites are putting the number one grape variety grown in Australia in a "diabolical situation". The world's oldest continuously productive shiraz vines were planted in the Barossa Valley in 1843. But despite the long history, drinkers are falling out of love with the heavy reds, prompting wine makers to pull out hectares of vines. The managing director of De Bortoli Wines, Darren De Bortoli, said consumers were moving away from reds in favour of whites. "Shiraz is in a diabolical situation at the moment," Mr De Bortoli said. According to the 2024 Wine Australia national vintage report, the shiraz crush dropped to its lowest levels since 2007. It's a far cry from Australia's record shiraz crush of 535,000 tonnes in 2021, with just 297,868 tonnes crushed last year. De Bortoli has vineyards in several wine regions, including the Hunter Valley, King Valley, Rutherglen, Heathcote, and the Riverina. Over the past two years, they have removed 130 hectares of red wine varieties in Rutherglen and the Riverina. Mr De Bortoli said there was a range of factors at play. "Leading up to COVID, the demand from China was exceptionally strong and a lot of new vineyards went in," Mr De Bortoli said. "Then we had an altercation between our prime minister and the Chinese government and were effectively banned from sales into China." He said that had now been resolved, but demand had not returned to the same levels. "Additionally, we've seen an anti-alcohol theme as well," he said. Data by the International Wine and Spirit Record shows drinkers aged 18–39 years old were more likely to choose wines described as sweet, delicate, soft and simple. The demographic also preferred low-alcohol options and were reducing the amount they drank. One such wine is moscato, an industry quiet achiever that is low alcohol and sweet. Katherine Brown is a fourth-generation family winemaker at Brown Brothers in Milawa, Victoria. She said moscato, which is made from muscat grape varieties, had grown to become their biggest product. "We released our first moscato about 35 years ago, and at the time it felt like the wine industry was having a laugh at us," Ms Brown said. Out of the 14,000 tonnes of fruit Brown Brothers produced in their 2025 vintage, 40 per cent will go towards making 20 different moscato-based products. "We have a theory that the next generation doesn't want to be seen drinking what their parents drank," Ms Brown said. "Crouchen riesling is a sweet white wine, but it's now old-fashioned." Ms Brown said prosecco had been the other big performer. "I've never seen growth like that before." Zero-alcohol wines were also increasing in popularity across all generations. "Gen Z is not going out as much, and we're seeing the baby boomers who are asked to drink less for their health," Ms Brown said. "I think there are big pressures on people at the moment about not drinking." Brown Brothers had also seen a decline in demand for red wine varieties, however, Ms Brown noted that wines came in and out of fashion. "Yes, there's a decline in red wine, but red wine grapes also make rosé, which is growing in popularity," she said. "This issue is not new. My grandfather was doing this over 60 years ago, when there was a pivot point and it was mostly red wine production. Mr De Bortoli said he was confident gen Z would discover wine as they aged. "It's definitely a demographic the wine industry is missing out on," he said.