Defence Shipbuilding

The Hon. T.R. KENYON (Newland) (14:50): My question is to the Minister for Investment and Trade. Can the minister inform the house about the threats to future job creation in South Australia?

Mr Pisoni interjecting:

The SPEAKER: The member for Unley is warned for a second and final time. The minister.

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Defence Industries, Minister for Veterans' Affairs) (14:50): I thank the member for Newland for this question because I know jobs are very important in his electorate. The government is committed to encouraging investment in the South Australian economy, investment that will create jobs. At the moment there is a significant issue with one particular project that has the potential to create or lose thousands of jobs over coming decades for South Australia.

Ms Redmond: No-one believes you, Martin.

The SPEAKER: The member for Heysen is called to order.

The Hon. M.L.J. HAMILTON-SMITH: There is a threat that this project will be sent offshore by the federal government, with the billions of dollars that would go with it injected into an overseas economy, creating jobs and enterprise in someone else's country. Concerns continue to grow that the federal government will make a decision to build the next generation of Australian submarines in Japan or elsewhere and that this will be done without any form of open process or tender, or project definition study. That such a scenario is even possible is hard for South Australians to fathom.

When considering the expert opinion and research available on the economic impact of different build scenarios for the future submarines, it is impossible for South Australians to understand that a federal government could build these submarines offshore. The South Australian Economic Development Board this week released economic modelling that demonstrated the significant difference in building the submarines between here and overseas. The modelling estimates there would be a $29 billion negative impact on Australian GDP over the 40 year life of the project if the submarines are built overseas. The Chair of the Economic Development Board, Raymond Spencer, said this:

Initial indications are that importing Australia's next generation of submarines would be an economic mistake. Not just for South Australia but for Australia as a whole.

Overall, the modelling found that the submarines, if locally built instead of being built overseas, would leave this country better off by $20 billion in net contribution to GDP over the life of the project and through 120,000 man years of additional jobs in the economy over the life of the enterprise. The call for a more open process is not just being supported by those who look at the economics. Dr John White, a nationally recognised expert in naval ship building, recommended to the Senate Economics References Committee Inquiry into the Future of Australia's Naval Ship Building Industry on Monday that the design, build and sustainment of our future submarine should be managed by one authority and that there should be a fair and open process.

The government is pleased to see that some Liberal South Australian federal MPs have now given their support to a more open process. Senator Edwards has expressed his belief—

Members interjecting:

The SPEAKER: Would the minister be seated. I have a question for the member for Florey, the Deputy Speaker: was the member for Hartley warned twice this morning?

Ms BEDFORD: I do not have the piece of paper any longer, but I think if we check Hansard he was very close to being in trouble.

The SPEAKER: Would the member for Hartley tell the house how many times he was warned before question time?

Mr TARZIA: I honestly cannot remember, sir, but I will endeavour to—

Members interjecting:

Mr GARDNER: Point of order, sir. I can assist the house because I have perfect recall.

The SPEAKER: I anticipate that the point of order may be that the Speaker cannot require a member to self-incriminate. I will take a point of order from the member for Morialta.

Mr GARDNER: The Hansard, I am confident, will actually reflect that a question was put to the Deputy Speaker this morning asking who she had warned at one point, and the Deputy Speaker answered that everyone was warned.

Ms BEDFORD: It came very close to invoking standing order 73, sir.

The SPEAKER: Arrest?

Ms BEDFORD: However, the two incidents that the member for Morialta is talking about were different. The member for Hartley was definitely in trouble but then the member for Morialta came to my attention, so I think we just move on if that is a suggestion.

Mr VAN HOLST PELLEKAAN: I think if you check the record, you will find that the Deputy Speaker said, 'If you do anything like that again, I will have to warn you.'

Members interjecting:

The SPEAKER: This is worse than yesterday's yarn about the Lord Mayor.

The Hon. J.R. RAU: Mr Speaker, I rise to make a few comments amicus curiae for the assistance of the member for Hartley.

The SPEAKER: I don't recall appointing such a counsel.

The Hon. J.R. RAU: I would advise the member for Hartley that he does have a privilege against self-incrimination and he should continue to say nothing.

The SPEAKER: Accordingly I call the member for Hartley to order and I call the minister to continue. I think we were on Senator Sean Edwards.

The Hon. M.L.J. HAMILTON-SMITH: We were. Senator Edwards, Senator Ruston and Senator Fawcett have now called for an open tender process. The PM and the Minister for Defence appear to have a different view. With the defence minister in Japan today as we sit, signing an exchange of technology agreement with his opposite number in Tokyo, this matter is of crucial significance to all South Australians. Building these submarines is not just important in itself. No business will escape punishment if this decision goes the wrong way. Eighty to 90 per cent of the work done overseas with only 10 per cent here is not good enough; it must be quite the reverse.

A strong local industry with a strong local multiplier effect, all of that is crucial. The workers will spend money on new homes, hardware stores, supermarkets and local retailers here, not overseas. It is time for other members of parliament to stand up and be counted on this issue. I applaud those who have had the courage to do so to date. There can be no South Australian MP who has any view other than that these submarines must be built wholly in South Australia. It is impossible to claim you are pro-jobs and to argue that these submarines should be spent overseas. It just does not make—

Mr VAN HOLST PELLEKAAN: A point of order, sir. The minister is giving a hypothetical answer to a hypothetical question—

The SPEAKER: No, he isn't.

Mr VAN HOLST PELLEKAAN: —and now he has started debating.

The SPEAKER: That is a bogus point of order and the member for Stuart is called to order. I will allow another minute for the minister.

The Hon. M.L.J. HAMILTON-SMITH: Thank you, Mr Speaker. It is clear that any further steps down the path of deciding to build the next generation of submarines overseas without an open process presents a massive risk to the future of jobs in South Australia. To build these submarines in Japan or anywhere else would be a jobs catastrophe. This is the most important job to manufacturing decision this state has faced since World War II, and it is in the hands of the federal government. There are members in this chamber who could influence that decision, and there can be only one course of action they must take.

Next Tuesday the government will hold in this chamber a summit which will bring together key industry stakeholders from the commercial sector, the unions and academia to debate these issues, to inform our white paper submission on defence industry by the end of the month. The Leader of the Opposition and the shadow spokesperson on defence have been invited.

We need to get the right answers; we need to reach the right decision point because this is the story of jobs. If you are serious about jobs, then you must be serious about getting the right decision. There are kids in primary schools now whose jobs will be determined early next year on the basis of this decision, and this government will be calling till its last breath for those 12 submarines to be built right here in Australia, based in South Australia. That can be the only outcome.

The Hon. I.F. Evans interjecting:

The SPEAKER: The member for Davenport is called to order, the member for Schubert is called to order and the Treasurer is warned a first time. The member for Giles.