Defence Industry

The Hon. T.T. NGO (15:45): Previously in this place I expressed my deep concern regarding the future of the defence industry in our state. Before the last federal election, on 8 May 2013, the now Minister for Defence, David Johnston, stood outside ASC and promised unambiguously that the coalition would build 12 submarines in Adelaide. We all know that commitment is now under review. In his recent opening address to the submarine institute he stated, 'I can say there will be more submarines and that means jobs for South Australia.'

This is of some relief, but we still do not know how many jobs will be in South Australia. In this address he also only guaranteed that Australia will acquire at least six submarines, but did not promise that they will be built here. It is also less than the 12 submarines that he originally promised before the federal election.

Today I would like to focus on the broader positive aspects of building our new generation of submarines right here in the defence state. These aspects are national security and nation building. Before I elaborate, I ask that my remarks are considered in the context of what I hope constitutes a bipartisan push to keep this and other leading maritime projects local and in South Australia.

The Governor-General and former ADF Chief Sir Peter Cosgrove—a very good man and a former Vietnam vet—highlighted the importance of local submarine building in a speech he made in 2013 in his capacity as chair of the Defence SA Advisory Board. On national security he said:

Current Australian Government policy aims for self-reliance in the direct defence of Australia. That doesn't preclude a degree of dependence on allied nations [of collaboration on certain technologies], but it is in our interests to develop, own and keep as much intellectual capital and capability as possible.

These requirements may not have been adequately met in the Japanese bid. This may explain why the defence minister is now considering other options through a tender process. On cost, the Governor-General stated:

There is no real advantage in outsourcing the initial submarine build to another country when the real grunt work to keep the submarine fleet working is carried out in Australia by the same skilled workforce using specialised infrastructure.

It has been reported that 12 submarines built overseas will cost roughly between $20 billion to $25 billion, compared to about $30 billion to $35 billion to build in Australia. The new submarines project goes for 30 years. Therefore, if we build 12 submarines, it will cost about $10 billion more to build them here which, over a 30-year period, works out roughly as $333 million a year. This amount can be easily recouped when we take into account the cost of sending submarines to Japan for regular maintenance. Finally, on nation building, Sir Peter Cosgrove, said:

Our future submarine building project will ultimately not confine itself to the next 12 submarines. It sets a course towards the creation of an evolutionary industry—one of continuous build and continuous improvement, ingenuity and innovation.

I have quoted the Governor-General directly on this issue because I could not put it better myself. Finally, I urge honourable members from all sides of politics in this council to put as much pressure as they can on the federal government to ensure that the next generation of submarines is built and maintained here in South Australia and Australia.