Defence Shipbuilding

The Hon. J.M. GAZZOLA (14:34): My question is to the Minister for Employment. Minister, will you inform the chamber about the job creation potential of naval shipbuilding in South Australia?

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (14:34): I thank the honourable member for his question and his ongoing advocacy for jobs in South Australia. I know I spoke in this chamber before about some of the types of jobs we might see in shipbuilding, but we also have some estimates about the quantum of jobs we might see as a result of shipbuilding in South Australia. There is no doubt shipbuilding will provide long-term jobs here in South Australia. The construction of the first of a new fleet of offshore patrol vessels, followed by Future Frigates and submarines, ensures we will have a continuous build right here in South Australia.

Shipbuilding has the potential to be absolutely transformational for our economy. International studies show that the macroeconomic impact of having a high-tech, complex manufacturing economy with high productivity growth leads to high-paid jobs and large export potential. Large defence projects, like naval shipbuilding, become drivers for new technology and jobs right across the economy. Shipbuilding will create a very significant number of jobs in South Australia. I know that projections have been put together to show that the air warfare destroyers could create as many as 2,300 jobs, the Future Frigates as many as 2,000 jobs, offshore patrol vessels as many as 400 jobs, the submarines as many as 2,900 jobs, the continued sustainment of the Collins class submarines as many as 900 jobs, and the construction of the infrastructure to do that as many as 400 jobs.

The estimates of direct jobs from naval shipbuilding in South Australia, as it gears up over the next decade, are peaking at about 5,800 direct jobs. We know that these will be high-tech jobs, not just temporary jobs, and actual careers for decades to come. There will be significant research and development, spin-off and innovation opportunities, not just for those almost 6,000 direct jobs, but the estimates are many thousands of further jobs indirectly and in related spin-offs. There will be problems and innovations needed in areas like sensing, optics, software, hardware, artificial intelligence and high-tech fabrication.

As I said already in the chamber, there will be jobs in many areas, such as naval architecture, marine engineers, draftsmen, trades such as boilermakers, welders, electricians, fitters and painters, and production and engineering areas such as production managers, mechanical and electrical engineers, supply chain and configuration managers, project managers, and a lot in the software, electronics and sensing areas.

Through diversification, companies like Castech, a local casting foundry, have been very successful in their work on the Collins sustainment, and now they deliver a first-class product for the Collins exhaust manifold. Big international companies, such as Saab, have diversified out of their existing defence work in South Australia. I had the opportunity a couple of months ago to visit Saab, and they are capitalising on opportunities in other areas, such as in security and management with their new OneView system, which is designed to integrate disparate security systems, including CCTV, access control, intruder alarm, key safes and other technologies into one common-use package.

So, we are seeing a company that has worked in defence industries diversify into other areas in the South Australian economy, and that is something we will see a lot more of: companies whose primary involvement has been in defence industries diversifying to other areas outside of strictly defence. There are many South Australian companies that are already working in the defence sector that will benefit from naval shipbuilding in South Australia: companies like MG Engineering, PMB Defence and, as I mentioned, Castech.

There are also companies in South Australia who will no doubt be able to take advantage of not just the direct but the spin-off effects of these large contracts—companies like Codan, Cohda Wireless and Ferrocut—in a whole range of areas that include very high-tech electronics and sensing. We will almost certainly see more engagement with large international defence companies who will look to increase their presence in South Australia—companies such as Saab or Lockheed Martin or BAE Systems—and it would be very likely that we might see other big international defence companies set up here in South Australia.

Many sectors of our state's economy are growing and capable of significant further growth, and we have talked about them before in this chamber: food manufacturing and health care. But this defence industry will help to underpin South Australia's transformation to high-tech jobs and opportunities for many decades to come. I have noticed commentary in the media, that there is a risk to shipbuilding in Australia. My very firm view is that the biggest risk would be not building submarines here in Australia, and seeing thousands of jobs and core skills and capabilities sent offshore. This is the experience from overseas.

Great Britain's Prime Minister, David Cameron, made a commitment to shipbuilding in the Scottish shipbuilding yards, an £859 million investment. Prime Minister Cameron said at the time that as well as keeping his country safe it was part of a long-term economic plan. At the time Prime Minister David Cameron said, 'We are not just building the most advanced warships in the world, we are building the careers of many young people with apprenticeships that will set them up for life.'

I think that goes to the heart of what the risks would have been had we not built these ships in South Australia, and sent the jobs and sent the skills and sent the opportunities offshore. We have some real opportunities that will provide a long-term foundation for the transformation of our economy here in South Australia, and we will see these benefits over many, many years and a number of decades to come.