House of Assembly Fifty-First Parliament, Third Session (51-3) 51 3 Parliament of South Australia House of Assembly published Question Time Defence Sector DEFENCE SECTOR Mr RAU House of Assembly Enfield DEFENCE SECTOR Mr RAU (Enfield) (14:08): My question is to the Premier. Will the Premier inform the house of recent developments in South Australia's defence sector? The Hon. M.D. RANN House of Assembly Ramsay Premier Minister for Economic Development Minister for Social Inclusion Minister for the Arts Minister for Sustainability and Climate Change DEFENCE SECTOR The Hon. M.D. RANN (Ramsay—Premier, Minister for Economic Development, Minister for Social Inclusion, Minister for the Arts, Minister for Sustainability and Climate Change) (14:09): I am delighted to answer this question and to recognise the presence in the chamber of Doug Caster, who is the Managing Director of Ultra Electronics, from Great Britain and also senior executives from that organisation who will be setting up in Adelaide. We welcome a new industry and a company that is pre-eminent internationally in a number of spheres of defence, including marine systems. We are delighted with what happened this morning. Defence has been a high priority for this government since we came to office in 2002. Just remember what we faced in 2002: huge pressure on our manufacturing industry. Together with the Economic Development Board, we made a decision that we would not only go hell for leather to diversify the economy but also to get mining going and to secure defence projects. There was one big defence project coming up, which was the $8 billion air warfare destroyer project. All the predictions were that Melbourne was going to win, that the Tenix bid would be successful in terms of its facility at Williamstown. Despite the fact that the Premier of Victoria—and I can now reveal this publicly—I am told, was told the night before that Victoria had won the bid, we put in a massive effort to secure that very important contract for South Australia. It was about getting a critical mass, just as it was important to win the submarine project back in the 1980s, again in association with organisations like the DSTO, which provided the intellectual infrastructure for our defence capability, and then out of that we were able to build a series of companies around it that helped us get a critical mass of expertise to assist us to win other projects. A key part of our bid to win the air warfare destroyers project was to make a commitment to put our money where our mouth is as a state; it was not just the commonwealth. This was a partnership with the commonwealth. We, unlike our competition in other states, made a commitment that we would invest up to $400 million in establishing a common user precinct, a maritime defence precinct, at Port Adelaide, next door to the Australian Submarine Corporation's submarine manufacturing facility at Osborne. That meant that it was available for Tenix, should they win, or for the ASC, if they won the project, and for a range of other defence projects and contracts that could be run concurrently. The $8 billion air warfare destroyer contract is the biggest and most complex defence contract ever let in Australian history. It is to build three air warfare destroyers. We are hopeful that eventually we will get a decision on a fourth. What we are doing now is building the infrastructure. I can announce to the house that it is expected that construction on the air warfare destroyer, the actual building start, will be next year (2009), which will see a considerable take-up of jobs in the area as people are recruited. The Maritime Skills Centre is part of Techport. The minister for employment, training, further education and many other things was with me this morning for the opening of the Maritime Skills Centre, which is the first stage, the first completed building in this giant Techport complex. There is a lot more to come: a systems centre, Raytheon's facilities, a Rolls Royce ship lift, the biggest ship lift of its type in the southern hemisphere, capable of lifting an air warfare destroyer. There are wharf facilities that should be handed over to us next year as well. What this means is that there will be a series of contracts let. We have already let about $250 million worth of both contracts and subcontracts, and much of that to local companies. As part of our economic development thrust, our State Strategic Plan target is to lift the number of defence jobs from 16,000 to 28,000 by 2013 and to double the size of the industry's contribution to gross state product to $2 billion. Earlier this week, the first major flow-on contract for the AWD project was signed with the British defence and aerospace company, Ultra Electronics, which has been awarded the $78 million contract to supply integrated sonar systems for the destroyers. That is very good news for South Australia, because this company will deliver the contract from its new Australian head office in Adelaide, and we welcome them as new corporate citizens in our state. We can look forward to other companies establishing or expanding their presence in South Australia as a result of their involvement with the AWD project. Techport is home, of course, to the Maritime Skills Centre, which was opened this morning. It is a key component of Techport Australia but, in addition, we want it to become a hub for maritime training in Australia. To this end, SABRENet, the state's high-speed fibre optic broadband network, will be rolled out to Techport Australia, linking the Maritime Skills Centre to all of the state's other education and R&D centres. I think that is important. Techport Australia's commercial campus is also taking shape. I announced this morning that final documents have just been signed with the cornerstone tenants of the campus, the AWD Alliance, and Raytheon Australia. The $40 million campus will be delivered by local private developers, Prime Space Projects, and, of course, we had a range of other announcements this morning. It was a very good event and, if we can develop weapons of mass destruction against the flies down in Kevin Foley's electorate, we will all be happier at these launches.