Defence Shipbuilding

The Hon. T.T. NGO (15:34): There have been many developments in the debate surrounding the Abbott government decision to stop building the 12 promised submarines in South Australia. Since I last spoke on this important issue we have learnt more about how well advanced discussions have been with Japan about giving them the submarine contract. I quote directly from an article in The Australian from 22 March 2015, which states:

For several months last year, the federal government single mindedly pursued a plan, driven largely from Tony Abbott's office, to buy the navy's new submarines from Japan.

This wheeling and dealing behind closed doors by Mr Abbott was done in full knowledge that he was disobeying his promise to South Australians that 12 new submarines would be built here. The Abbott government even had media releases prepared until their plans were scuttled by the Australian community's reaction.

The defence industry, MPs and senators from South Australia, the media, and the government of South Australia (especially the Premier, Jay Weatherill, and the Minister for Defence Industries, the Hon. Martin Hamilton-Smith) must all be congratulated for their relentless campaign in holding the Abbott government to its promise. The campaign seems to be working, as we have since been told that the government is no longer awarding the project directly to Japan but is now undertaking a 'competitive evaluation process', whatever that means. Only three countries—Germany, France and Japan—have been selected.

I and many Australians are confused and surprised that the Swedes were excluded from this process. I would certainly like to see the Swedes, through Saab, be given the opportunity to participate in this 'competitive evaluation process'. The Swedes have proven that they can build submarines. They have indicated that they would be happy to build the submarines here in South Australia and purchase ASC if needs be.

Having another contender in the race would put pressure on Germany, France and Japan to provide Australia with the best outcome not just on price but also on maintaining jobs for South Australians and Australians. At the very least, whichever country this project is eventually given to, I implore the Prime Minister to consider the total value of the contract to Australia's defence industry, its workers and the broader Australian community by ensuring that as much sustenance and maintenance work as possible is kept within Australia. This work will be the majority generator of economic activities for Australia for the life of the project, which is estimated to be at least 30 years.

Germany through Thyssenkrupp, France with DCNS, and Japan with Kawasaki and Mitsubishi are all reputable defence companies that I have no doubt would do a good job in building the submarines. However, the Abbott government needs to put on the competitive evaluation process two very important conditions for potential bidders:

1. They must demonstrate how they can partner with ASC to build the submarines in Australia; and

2. The sustenance and maintenance work for the life cycle of these submarines must be done here in Australia.

These two conditions must be at the forefront of any negotiations. We have not heard any further announcements about the next generation of submarines from Mr Abbott. It has been 18 months since he was elected PM and his government has handed down two budgets. There are talks that the government may even call for an early election. These delays are causing much concern and anxiety not only within the industry but for the thousands of workers and their families. It is time that Abbott and his government stop worrying about their own jobs and make the right decision for the people of Australia.