Prime Minister says $2.4 billion package for Whyalla steelworks is ...

Prime Minister Anthony Albanese has told Whyalla steelworkers a $2.4 billion support package for the city will ensure "your kids will have a job in the future".

Mr Albanese travelled to the South Australian regional city after the steelworks was yesterday plunged into administration by the state government, following months of turmoil under the ownership of GFG.

"There's no industry that is more important for our nation than steelmaking, and here in Whyalla 75 per cent of Australia's structural steel is made," he told reporters at a media conference.

"Today we met people, including someone who has worked here for 56 years. That says something about how important this is.

Minutes earlier, Mr Albanese addressed workers at the steelworks, telling them the support package was an "investment in the nation".

"[We want to] make sure that we give you certainty — that we say, 'Not only will you have a job, your kids will have a job in the future right here in Whyalla,'" he said, and later elaborated on the theme.

"We got shown around by someone who's a fourth-generation steelmaker," Mr Albanese said.

"We want to make sure there's a fifth and a sixth and a seventh-generation steelmaker here in Whyalla."

Support package targets payments and upgrades

The support package is split between immediate, short-term and long-term spending plans, and will be jointly funded by the state and federal governments.

The first element includes $100 million for what the federal government described as "on the ground" support in Whyalla, including $50 million for creditor assistance payments and almost $33 million for infrastructure upgrades.

An allocation of $384 million will keep the steelworks and jobs afloat during the period of administration, ensuring "workers and contractors will have ongoing work at the steelworks and will continue to be paid", the government said.

The government said the bulk of the money — $1.9 billion — had been set aside for new infrastructure under a new owner and was "vital to ensuring the steelworks has a sustainable, long-term future".

Mr Albanese said the government had set up a $1 billion green iron investment fund, up to half of which would go to Whyalla, with the rest to be made "available for other projects as well".

He said the state and federal governments would "combine dollar-for-dollar on administration".

"I've been in a lot of worksites over a lot of years. What we had today was a feeling of relief — a feeling of relief that the uncertainty is over, that the jobs here are secure," he said.

'No steelworks, no town': Whyalla's fight for a future

While the steelmaking city of Whyalla is no stranger to struggle, the latest crisis is taking a severe toll on the population, who very much want to continue making steel for Australia but say they are "sick of having to be resilient".

SA Premier Peter Malinauskas said the outcome was the result of extensive state and federal collaboration.

"Yesterday was a dramatic day in South Australia and the state parliament," he said.

Mr Malinauskas insisted the financial injection was not the same as a bailout of GFG and its owner Sanjeev Gupta, saying it would be "patently wrong" to represent it as such.

"We're not bailing out Mr Gupta," he said.

"There is no bailout here of GFG. Their debts aren't going anywhere and they're Mr Gupta's to account for and he will have to deal with that process through administration. What we're going to do is support the businesses on the ground who've done nothing wrong.

"If they are owed money by GFG then the state government's going to step in and look after those creditors … and then those creditors will hand over to the state the dividend that they will receive for the administration process."

Earlier today Mr Malinauskas said the amount owed by GFG to creditors was understood to be at least $300 million.

He said the state government contribution to the support package would be largely funded by money made available by the decision — which was anticipated earlier this month and confirmed today — to "defer" a $600 million hydrogen power plant proposed for Whyalla.

"We're deferring the hydrogen plant and then reallocating the resources to the effort that is of course of most immediate need," Mr Malinauskas told ABC Radio Adelaide.

Federal opposition leader Peter Dutton said he supported the government’s measures to assist workers in Whyalla. 

“We need to make sure that we have a strong steel industry, that workers at Whyalla are supported, and we support the measures helping those workers and making sure that the business is viable,” he told Sky News.

Neither the premier nor the prime minister would rule out nationalising the Whyalla steelworks, but both indicated the preference was to find a new owner.

"We want it run by the private sector but we've intervened here with the administration to make sure that while that process goes on, the steelworks continues to operate, people continue to get paid," Mr Albanese told radio station 5AA.

"We're not in the 'rule out' position but I don't think that [nationalisation] would be a desirable outcome," Mr Malinauskas told ABC Radio.

Workers welcome announcement

Noel Goldsworthy has worked at the steelworks for more than five decades and described the decision to wrest control of the site from Mr Gupta, and place it in the hands of administrator KordaMentha, as a "great move".

"It's been a long time coming — the frustration and the uncertainty is what the killer is for anybody in whatever they're doing — so I think it was a very well executed plan," he said.

"Obviously there's a lot of creditors still that are owed money so we'll just see where that all goes.

"But I think the mood is very positive, I think bringing KordaMentha in who've been here before I think also adds confidence that we've got an administrator that knows the business."

Jules Kinslow said she was confident in the government's claim of "jobs for the kids".

"It's a great day, seriously. I've been here 25 years and this is a good day. I'm really happy, I feel confident. My son works here, third generation," she said.

The ABC has contacted GFG for comment, but in its statement on Wednesday, the company said it was aware of the government's announcement.

"GFG is assessing what this means and is seeking advice on its options. Our concern is first and foremost the wellbeing and safety of our employees," the company said.