Concerns focus on the Whyalla steelworks in South Australia owned by billionaire industrialist Sanjeev Gupta who heads GFG Alliance, which relied on Greensill finance for its planned $1 billion transformation of the plant.

"The implications for GFG and the operations in Australia are part of what is being worked through at the moment," deputy secretary of the prime minister's department Simon Duggan said on Monday.

Founded by Bundaberg farmer turned Wall Street player Lex Greensill, the firm filed for administration earlier this month, warning of severe financial distress partly due to "defaults" from its key customer GFG Alliance.

All Australian Greensill staff have since been terminated, global funds run in partnership with Swiss bank Credit Suisse are being liquidated, and administrators from Grant Thornton are dealing with creditors in Australia and the UK.

Finance Minister Simon Birmingham told the hearing Mr Gupta has provided "relatively positive" assurances around GFG refinancing its debt and operations.

"Clearly it would be in everyone's best interests for that to succeed," Senator Birmingham said, when asked by independent senator Rex Patrick whether the government would prevent another failure at Whyalla.

"We are acutely aware of the importance of the steelmaking operations at Whyalla and the contribution they make particularly to the Whyalla community but more broadly to the nation's capabilities and supply of steel.

"We are monitoring and engaging fairly closely around the issues that flow from the failure of Greensill."

Senator Birmingham has had direct discussions with Prime Minister Scott Morrison and South Australian Premier Steve Marshall and said Mr Gupta has spoken to Industry Minister Karen Andrews.

Mr Duggan's department, Treasury, the finance department, and the department of industry - as lead agency - are providing advice on a possible whole of government response in the event of a collapse.

Australian Associated Press