Defence Shipbuilding

Mrs PEARCE (King) (14:46): My question is to the Deputy Premier. Can the Deputy Premier update the house on action the government is taking to support local companies to enter naval shipbuilding supply chains?

The Hon. S.E. CLOSE (Port Adelaide—Deputy Premier, Minister for Climate, Environment and Water, Minister for Industry, Innovation and Science, Minister for Workforce and Population Strategy) (14:46): Yes, I am delighted to answer this question. People across South Australia, but in particular probably in the north-eastern suburbs where there are a lot of people who work in small-to-medium businesses—manufacturing, trades-trained—will be very interested in understanding how the work that comes with the defence industry uplift will spill over and make a difference to a number of parts of our economy and to a number of people who are working within it.

We have always said in this government that we are delighted that there will be an enormous amount of defence work occurring in South Australia, but we need to make sure that that work is not confined to the commonwealth-owned lands at Osborne or at Edinburgh Parks but is in fact something that spreads through our economy—through our manufacturing economy in particular—in order to provide that increase of prosperity across the state.

To that end, the Treasurer recently announced that we will have $3.3 million in the budget over the next two years to spend on a defence supply uplift program. That program is based on a pilot trial that was done where a number of companies involved or interested in being involved in being part of the supply chain internationally for defence were assisted by the Department of State Development. Five were selected to gain supplier numbers with Huntington Ingalls Industries (HII) to be able to participate in the supply chain for the Virginia class submarines.

We hear a lot of things about AUKUS. One thing that I think isn't probably sufficiently well understood is that this is not about a company that is designing a ship elsewhere and coming here and locating and building it here; this is about a globally connected submarine yard in the US, in the United Kingdom and in Australia, where there will be work that will spread between the three.

This global connection matters, not least because while the strategic imperative to have submarines becomes all the more acute, the capacity of global shipyards to build the submarines is diminishing. Everyone is working flat out, and so to be successful here we need to be participating elsewhere to assist other countries in finishing their submarines, and likewise their workforce assisting us.

Getting our companies up to the standard where they are able to participate in that supply chain is absolutely crucial. And it isn't easy because defence is the most demanding of procurers. The quality of engineering is higher than any other part of the industrial chain. The requirements, therefore, for the companies to be able to participate are often higher than immediately appears possible for a small to medium business based in South Australia.

The Treasurer and I went out and we spent some time with Shane McEvoy at H-E Parts International. This is a company, an engineering works, as we used to call it, an engineering works that supplies mainly into mining. They make gears. They do their own tooling and they make gears. They replace gears. They repair gears. What they want to do—and they now are one of the companies, one of the five, that has a supplier number with HII—is to be able to participate in the defence industry alongside the mining industry, and this government stands right alongside every business that wants to diversify, participate internationally and add to the overall complexity of our economy by better utilising the workforce, lifting skills and lifting prosperity.