Senate Foreign Affairs, Defence and Trade Legislation Committee, , 6:48:19 to 6:53:45
Discussion continues regarding the reliance on international steel supply chains and the Department of Defense's relatively small share of the domestic structural steel market compared to broader national infrastructure needs.
Topics: Manufacturing, Government spending
Speakers: Meghan Quinn, Speaker 28, Unknown Speaker
>> and and I guess to that point um WA won't be producing steel from from what's being reported for at least four years. Um, and that's if everything sort of goes to plan. Is the Department of Defense aware of um international markets that you can get the structural steel that you need? Uh, so that once
again it wouldn't be the department directly. It would be the industrial supply chains that okay that feed into things. We we don't tend to be that far down the supply chain. Um and and and I'm I'm not familiar with the latest time horizons. I'm not sure that's been settled because the final proponents of the insolveny haven't been settled. So I think there's some uncertainty about the gap, but clearly uh it's international.
>> The furnace can't be restarted. So it will need a new
>> That's right. But there's alternative technologies that um can can produce the same um outcome which is structural steel. Uh so our our supply chains would be aware of it. We have been working quite hard to make sure that the more broadly the Australian steel industry has the opportunity to feed into supply chains to do with uh the submarines um because that's a significant opportunity and not just a submarine manufacturer in Australia but the submarine manufacturer in the UK and the US under the arrangements. So um it is important that we try and maximize supply chains where we can.
>> Yeah. And so is it fair to say that there isn't necessarily a single point of accountability that defense has got because obviously there's demand across Osborne um Henderson HMA Sterling and the Magami bill but there doesn't is defense looking at that holistically or
or not? So we would have the ability to track back through from the requests from our industrial supply chain and we do supply chain analysis but ultimately we are uh working with our industrial partners to be able to for them to produce and source through the system. So so it's so we we keep an eye on it. Um but it's it's not our responsibility necessarily to dictate particular supply chains other than through national security or technology transfer issues.
in terms of um should I can put those on notice because they won't necessarily Sorry, I'm just conscious. I'll try and be as um um can I just ask given some of the constraints around that may be around getting the structural steel required um is there any contingency in the budgets or has any modeling been done if international supply chains are going to
>> Uh so I mean we we have contingency uh measures in our projects for lots of reasons. Um and we've talked about this sort of earlier. There's lots of things that happen to supply chains that we can't always predict. So there are always contingency arrangements in projects. For significant supply chains, we would have a relationship and a discussion with the industrial providers to make sure they had contingency plans in place. Uh and so we we do cascade through our supply chains to make sure that our suppliers are aware of alternatives if they were to face constraints. It's well I mean the Australian market is well aware of the steel situation. uh and I imagine people are very much looking for alternative suppliers uh and a lot of that information is being fed into the department of industry which is responsible for the steel industry in
Australia. I understand they're responsible for that. But obviously if um demand is sort of high um and you've got less supply that can increase costs significantly not just for defense obviously um state and federal government are doing other infrastructure projects. Um so so it could have quite a significant impact.
>> It may
>> possibly beyond contingency. So has has anything been
>> Yeah. So it it could be um an impact but um at the moment uh defense is a relatively small user of of structural steel uh and we we use other types of steel more often. Um but still we're a relatively small proportion of the domestic market. Uh but clearly we would uh if cost-ffective like to support industrial systems in Australia and that's part of the government's tended policy. Uh so we provi we provide information about demand. uh the the market provides the supply.
>> Yeah. Um what percentage of demand do you think you will be over the next so I guess if we go through until 2040?
>> Uh I'm h I'm happy to take it on notice. I can't imagine where where >> well it depends a lot on contingencies but happy to take it on notice and provide that information.
>> That would be very useful. Thank you. Um and then I just have a couple of very very quick questions um in terms of the estates um and and looking at the um costbenefit analysis