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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2015-07-02 Daily Xml
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Defence Shipbuilding

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Defence Industries, Minister for Veterans' Affairs) (14:05): I seek leave to make a ministerial statement.

Leave granted.

The Hon. M.L.J. HAMILTON-SMITH: The Senate Economics References Committee of the federal parliament has released its third and final report on the future of Australia's shipbuilding industry to which I draw the attention of the house. Its majority findings and recommendations focus on long-term planning for Australia's defence capabilities, whilst also recognising the benefits of a strong, sovereign, domestic shipbuilding industry. The findings underline the strong position taken by South Australia as it advocates for our defence industries, whilst also acknowledging the needs of our defence forces.

As Minister for Defence Industries I appeared before the committee, as did several representatives of our local industry. On future submarines the Senate committee's findings align with the government's view that the competitive evaluation process for our future submarines procurement is risky, while also noting concerns that a reduction to eight submarines will fail to satisfy Australia's strategic imperatives.

The committee recommended the government commit to 12 submarines, conduct a 12 to 18-month procurement process and invite all prominent designers to participate, including Saab from Sweden. The process should include a funded project definition study and down-select two builders to provide full designs and fixed price bids. It recommends that the submarines should be required to be built and sustained in Australia, a naval construction authority should deliver them and that Defence should heed and apply lessons in knowledge transfer from Collins and the air warfare destroyer program.

On air warfare destroyers, the committee found that recent criticism of the performance of the air warfare destroyer program was completely misdirected. It states that the air warfare destroyer problems stem from an initial poor understanding and analysis of cost and schedule, teamed with poor management at commonwealth government level. It also calls for the public release of the Winter White report and the recent audit relied upon by the Coalition government to criticise the workers of the ASC in Osborne right here in South Australia.

On supply ships, in respect of those particular builds, the committee found that the limited tender failed to adequately account for Australian industry participation, damaged industry confidence and harmed Defence's relationship with industry. It recommends that the tender be opened up to all companies and that a high value be placed on Australian content and continuous build.

While South Australians wait for the commonwealth government to release its naval shipbuilding plans, workers are losing their jobs right now at the ASC in Adelaide, at Forgacs shipyard in Newcastle in New South Wales, and at the Williamstown shipyard in Victoria. The Senate report notes that government should be doing more to maintain industry. It is fine to look back over the past and complain about the years preceding these decisions, but the government has a responsibility to make decisions now.

The Senate recommends a continuous build program mandating a hybrid build for the first supply ship and an Aussie one for the second, 12 future submarines to be built here, fast-tracking patrol boats and bringing forward frigates, both to be built here. The committee also raised concerns about the denigration of industry by government using dubious figures, a position taken by our Premier at the launch of the new air warfare destroyer, Hobart, in May at Osborne.

The house should note that there was a dissenting report from Coalition senators on the committee, where they queried the importance of economic benefits in defence procurement. It claims that rumours of a commitment to a Japan build of our submarines were no more than gossip. This government's advice is that the Japan option is far more than gossip. That is why we have advocated so strongly, questioning that very choice.

I commend the Senate on its review of naval shipbuilding and repeat this government's call that the Coalition government stand by its election promise to build future submarines in Australia, centred on the shipyards in South Australia, so that Australian workers and Australian businesses benefit from the Australian taxpayers' defence in Australia's future. We have to defend the nation, but we also have to build the nation.

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