Hydrogen office SA staff paid $9m to keep government project alive

Taxpayers are spending around $23m to keep the state’s hydrogen office in business, while the number of staff in the office has grown at a cost of $9m.

Premier Peter Malinauskas at a former economic summit in Whyalla. Picture: Ben Clark

• Steelworks collapse would ravage Australia

Around $23m of taxpayers’ money is being spent running the state’s hydrogen office as Premier Peter Malinauskas opens the door to scaling back his flagship hydrogen plan and pumping the money into a Whyalla rescue mission.

Mr Malinauskas said the goal to have green steel made in Whyalla through the $593m hydrogen project remained, ground works continued and generators were being built by General Electric in the United States to produce electricity for the state’s network.

Mr Malinauskas said work would continue on the hydrogen plan led by Hydrogen Power South Australia chief executive Sam Crafter. Picture: Supplied

However, the GFG Alliance operated steelworks was “ground zero”, he said, and “naturally, as a government, we’ve got a clear eye on who we want the ultimate customer for the hydrogen” to be and that customer is “in place investing in the steelworks”.

While the financial challenges facing steelworks owner GFG Alliance were addressed, Mr Malinauskas said work would continue on the hydrogen plan led by Hydrogen Power South Australia chief executive Sam Crafter who was appointed on a $560,788 annual salary.

The number of staff in the office opened in 2022 to kickstart the government’s flagship $593m hydrogen plan has now grown to 55, and a government spokesperson said “we anticipate staff costs of around $9m” this financial year.

Mr Malinauskas emphasised that the government’s priority was in supporting the people of Whyalla and there was “at least $593m allocated to a substantial economic infrastructure investment in Whyalla”.

Hummock Hill Lookout. Overview of the town of Whyalla SA. Picture: Ben Clark

“I want the people of Whyalla to know, that what is true above all else, is that this government is spending $600m, potentially more, on the ground in Whyalla investing in their economic future,” Mr Malinauskas told parliament.

“And we are going to do it in such a way that sustains the steelworks and people’s jobs on the ground, because that’s the number one priority.”

The state government continues to battle concerns over the Whyalla steelworks owner GFG Alliance failing to pay “tens of millions of dollars” in royalties during the past six months along with owing “tens of millions of dollars” more to businesses and contractors.

Opposition leader Vincent Tarzia said the government was “desperately trying to manage this crisis they have created” and this week had “shifted the goalposts” with no guarantees the hydrogen plant will ever be delivered.

He planned to be in Spencer Gulf visiting Whyalla next week to speak with the local community, and raised concerns about the cost of running the hydrogen office.

“It’s important to invest in innovations that result in cheaper energy prices for South Australians, but almost four years after his initial promise, taxpayers are still paying among the highest power prices in the nation,” Mr Tarzia said.

“This is despite spending $23 million a year to staff and run an office for his flagship election promise.

“We’re calling on Peter Malinauskas to outline his future intentions for the Hydrogen Project before he wastes any more money on his vanity project.”

Originally published as Hydrogen office SA staff paid $9m to keep government project alive