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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Motions

Defence Shipbuilding

Mr COWDREY (Colton) (11:31): I move:

That this house—

(a) welcomes the federal Liberal government's commitment to the $90 billion shipbuilding program, which will secure the future of South Australia's defence industry for decades;

(b) notes the significant work being undertaken by the South Australian government to ensure that South Australians can reap the maximum benefit of the shipbuilding program; and

(c) notes the significant negative impacts on the current workforce as a result of the former federal Labor government's failure to progress any future shipbuilding contracts during its last term in office.

Together, we stand on the brink of a never before seen flow of work into South Australia. The only reason for this work coming is that the federal Liberal government has committed $90 billion of taxpayers' money over the coming decade to modernise and strengthen Australia's naval forces, which will build a strong and sustainable sovereign Australian shipbuilding industry.

'Sustainable' is the key word that those opposite seem to have a tough time coming to grips with. Let us never forget that, during the Rudd-Gillard-Rudd federal Labor quagmire, zero—yes, zero, nought—vessels were commissioned, causing a massive hiatus in the work done at Osborne. Too often, those opposite conveniently forget that fact. In contrast, 54 separate vessels have been commissioned by the federal Liberal government. They will create a huge amount of work coming right here to South Australia, and particularly in the western suburbs of Adelaide, in which the electorate of Colton sits. This work will be here for generations to come and that is very good news for the people of our great state.

Currently, two offshore patrol vessels are being built by ASC Shipbuilding, with production directly employing up to 400 workers at Osborne and sustaining 600 indirect jobs. In addition, the redevelopment of the Osborne South Shipyard, a colossal structure where the Hunter class frigates will be assembled, is underway. In parallel, the Naval Shipbuilding College is also well underway. This is just the beginning. Naval shipbuilding is set to deliver an unparalleled economic benefit to our state. Around 5,200 direct jobs will be created through naval shipbuilding activities in South Australia plus more in the supply chain, the training sector, the education sector and other associated opportunities.

The next chapter in this book of good news is the landmark contract to build 12 Attack class submarines here in South Australia, a $50 billion project. The Attack class submarines project is the largest defence procurement in our nation's history, which is something we should all be very proud of. The project will set a number of national firsts in scale, in size, in complexity and in duration.

Earlier this month, the Premier attended the Strategic Partnering Agreement signing in Canberra, where the agreement between the Australian government and the Naval Group was formalised. To date, work on the submarines had taken place under the design and mobilisation contract. The signing is a key step in the procurement process, with the agreement representing the contractual basis to the Attack class submarines project. The $35 billion Hunter class—

Mr Malinauskas: What is the local content requirement?

The SPEAKER: The Leader of the Opposition is called to order for interjecting something about local content.

Mr COWDREY: —frigate program, which will deliver nine antisubmarine frigates to the Royal Australian Navy, will create and sustain 1,500 direct jobs. In addition, 600 jobs are needed for the redevelopment of the Osborne South Shipyard and opportunities through that supply chain. These opportunities include many South Australian-based businesses—for instance, structural steel for the mammoth shipyard has been sourced by South Australian-based steelmaker, Liberty OneSteel in Whyalla. The opportunities around naval shipbuilding are not just in Osborne, Port Adelaide or more broadly in the western suburbs of Adelaide, or at Lot Fourteen. No, the opportunities that a strong and sustainable naval shipbuilding program provides will have positive impacts and flow-ons throughout our regions and our state.

The Defence Landing Pad, to be located in Adelaide's new innovation neighbourhood at Lot Fourteen, will provide a home for global companies to develop their Australian business strategies and plan local operations. It will add to our already thriving prime and associated contractor environment a new one-stop shop supporting international defence companies to establish in South Australia that will drive defence industry investment. The Defence Landing Pad will enable international businesses to build relationships with South Australian businesses and create opportunities for our supply chain collaboration.

This is just one example of what the Marshall Liberal government is focused on: ensuring that we as a state make the most of the significant opportunity and investment that the federal government has made in naval shipbuilding here in South Australia. It is our obligation and our responsibility to ensure that we build capability, that we as a state make ourselves known for these skills and these industries and in the future seek further opportunities so that the impact of these investments lasts far beyond the already committed works.

The Minister for Industry and Skills tells us, sometimes ad nauseam, about the 20,800 new apprenticeships and traineeships, but the program is incredibly important. It is important because we need to work hard and make sure that we have the requisite skills in place to deliver on these projects. It is an incredible opportunity for our young South Australians, our next generation. They have an opportunity that those before them did not.

The Marshall Liberal government is committed to maximising the local benefits of this huge investment into our state and, as I said, this includes ensuring that we have the skilled workforce needed to deliver this project. Investing in training equipment like welding simulators and providing funding for additional work-based apprenticeships will help us create the skilled workforce that is required to fully capitalise on the naval shipbuilding program.

As I mentioned, the Naval Shipbuilding College, a fantastic new facility, is also underway and will play an important part in preparing our state for the jobs of the future and the skills that we need for our future. In addition to new apprenticeships and new traineeships, the Marshall Liberal government is also introducing the following measures to further develop South Australia's skilled workforce. We are working with industry to strengthen South Australia's VET system, including giving industry a stronger voice through the re-establishment of industry skills councils.

We are reforming the subsidised training list so that it is guided by industry and opening up funding contestability. We are establishing a new technical college in Adelaide's western suburbs, with a focus on defence and naval shipbuilding. The opportunities naval shipbuilding presents are not limited to advanced manufacturing, to engineering, to project management or to the trade sectors.

Just yesterday it was reported that the education and research sector is also already seeing benefits. It was reported that Adelaide University, Flinders University and the University of South Australia have signed an agreement with French company Naval Group, working on the subs, and France's National Centre for Scientific Research to fund an international research laboratory in Adelaide. The research lab will work on artificial intelligence, autonomous systems and ergonomics, also known as human factors. It is reported that Lot Fourteen, on the old Royal Adelaide Hospital site in the Adelaide CBD, is likely to play host to the lab, with hubs expected to be placed at each of the universities.

All vice-chancellors of the three universities are supporting this announcement. The Vice-Chancellor of the University of Adelaide, Professor Peter Rathjen, said that he welcomed further collaboration with CNRS, Naval Group and the defence industry. The Vice-Chancellor of Flinders University, Professor Colin Stirling, said that Adelaide was an ideal location for the laboratory. The Vice-Chancellor of University of South Australia, Professor David Lloyd, also welcomed the collaboration. Quite frankly, this level of collaboration between our universities is unheard of. The scale and breadth demonstrate the opportunities associated with naval shipbuilding and the commitment that the federal Liberal government has made.

Sadly, due to the federal Labor inaction I mentioned earlier, the Australian government has had to put in place, and backdate to 1 July 2018, the ASC Shipbuilding Structural Adjustment Program to support workers who, unfortunately, have been made redundant. Through this program, workers and their partners from ASC Shipbuilding or an affected supply chain business are supported through immediate access to intensive employment opportunities through Jobactive employment providers, including job search, résumé preparation, preparation for interviews, retaining, self-help facilities, skills assessments and career advice workshops. In addition, they have been provided with assistance by way of a $2,000 employment fund to assist workers to retain and obtain licences and tickets, as well as relocation assistance, if it is required.

As a member of this place, as a Liberal, as a South Australian and as a proud member of the western suburbs, I am incredibly proud of the commitment that the federal government has made by way of naval shipbuilding here in South Australia. I am incredibly proud to be part of the Marshall Liberal government, which is ensuring that we make the most of these opportunities for our local community and for our state.

Mr MALINAUSKAS (Croydon—Leader of the Opposition) (11:42): I move to amend the motion, as follows:

Delete paragraphs (a), (b) and (c) and substitute the following:

(a) welcomes the 2016 defence white paper and the 2017 Naval Shipbuilding Plan and its commitment to developing a national naval shipbuilding capability;

(b) calls on the federal government to secure a guaranteed level of Australian content in current and future shipbuilding programs to ensure the development of a national naval shipbuilding capability; and

(c) calls for an independent naval shipbuilding authority to oversee the level of Australian content in future shipbuilding programs.

Over the years, all of us in this chamber have heard ad nauseam the sort of speech just given by the member for Colton. More recently, the South Australian public has become accustomed to both sides of politics trying to claim credit for the fact that we now have an extraordinary opportunity coming our way in the form of the submarine program, with the Future Submarines being built here in South Australia. Truth be told, both sides of politics have had a hand in this exercise. We know that, if it were not for the ferocious campaigning and fighting for our state, the Future Submarines build was going to Japan. That is now a commonly accepted fact.

Equally, we also know that on the back of that pressure coming from state and federal Labor, it was ultimately a federal conservative government that changed their tune on sending the work to Japan and instead opted for a sovereign capability here in Australia, with the Future Submarines being built in Australia by the Naval Group.

So let's dispense with the tired old arguments around who can claim credit for what in regard to future sub builds. Instead, let's just focus on what is actually going to happen for our state in the future because I think we are all very cognisant of the fact that this is now an extraordinary opportunity. This is not just a once in one generation opportunity but a once in multiple generations opportunity. This is not likely to be something that we are going to see come to our state again in the future. We must make sure that we do everything that is humanly possible to maximise the opportunity for this state and all the chances for jobs that are coming our way.

What we have seen over the last fortnight is a dropping of the ball when it comes to ensuring the delivery of jobs for our economy, because what we know is there is a legitimate contest. It will not surprise people that in France they view the awarding of the submarines contract to Naval as an extraordinary opportunity for the French economy. The Naval Group is celebrating this as a boon for French jobs. French politicians are celebrating this as a winning of the industrial Olympics for France.

So quite understandably, quite rationally, quite pragmatically, the French will do everything they can to maximise the opportunity of this $50 billion Australian investment delivering for French jobs. It is equally important that we as a nation and that we as a state acknowledge that legitimate competition and do everything within our power to ensure that jobs will be delivered here in South Australia.

As the member for Colton referred to in his remarks a bit over a fortnight ago or thereabouts, a very important contract signing occurred interstate between the Commonwealth of Australia and the Naval Group: the strategic partnership agreement. The federal Minister for Defence, minister Pyne, was present, obviously, for the signing. Indeed, the Premier flew over for this photo opportunity. This event seemed to fly below the radar. One would have thought that the signing of the single biggest strategic partnership agreement for the largest procurement that our nation has ever entered into would have received a little more fanfare than just a singular quiet photo opportunity.

Quite a few of us in state and federal Labor were taken a little aback that there was not much fanfare associated with such a significant event, and now we are starting to learn why. As information has started to filter out about this strategic partnership agreement, we have learned that there are some very real and legitimate concerns about whether or not that agreement is going to deliver the level of local procurement that all of us in South Australia want to see and whether or not it is going to deliver the real jobs that we have been promised. Let's just have a quick look at the historical context.

With the Collins class submarine, the current class built here in South Australia on the back of advocacy from state Labor and delivered ultimately by federal Labor—but put that aside—we know that approximately 70 per cent of all the work that has occurred on the Collins class submarine has been done with local content. Look at another program: the Anzac class of frigates. We know that they have delivered about 80 per cent of local content for Australia.

So where are we at with the submarines—the future build—the largest ever capital project that the Commonwealth of Australia has ever entered into since Federation? What is the local procurement requirement in the strategic partnership agreement? What is the minimum local content standard? Well, we have learned that there is none—none. There is no local content requirement in the strategic partnership agreement from the information that we have garnered through forensic inquiries made in the Senate estimates process.

If that does not have everybody alarmed about how many jobs are actually going to come our way, then I am not too sure what will. Yes, it is true that there are clearly going to be jobs from the submarine build in South Australia, but are we maximising this opportunity? Are we doing everything we can? Where was the Premier's advocacy, where was this government's advocacy, in trying to secure a local content requirement?

We have heard nothing. We have heard nothing but complete silence, and that is borne out by the fact that there is no local content requirement within this agreement. There are plenty of people in local industry who are genuinely concerned about this, as well they should be. We know that if you are going to have a local content requirement in such a contract, it would exist in this one. That is what the pundits tell us. That is what one would reasonably expect—that an agreement of such importance would contain some reference to local content, yet we know there is none.

Of course, this comes on the back of some pretty large promises that have been made by the conservative side of politics when it comes to local content. We know that a 90 per cent number was thrown around that people were trying to have an association with. We know that minister Pyne himself referred to 60 per cent plus local content. In December last year, minister Pyne said that these jobs would be delivered through an assured level of local content. He told journalists, 'This will be a local build. A local build is defined as being around 60 per cent plus.'

So we expect this to be a local build, yet we find out what the Strategic Partnering Agreement actually says: nothing. It is utterly delusional for anyone in this place, particularly people who are responsible from the party or the government, to suggest that they can now guarantee that 60 per cent figure when the very agreement that underpins this contract has no reference to local content. What guarantees and assurances can the Premier of this state or the member for Colton give the people of South Australia that we are doing everything we can to maximise this opportunity? None, it turns out—none.

It is starting to demonstrate a bit of a pattern in the way this government behaves when dealing with the Commonwealth of Australia. It turns out that the modus operandi of this conservative Liberal government is to take their orders from their conservative Liberal mates. We have seen it on the Murray, the way they sold us out of our 450 gigalitres of upwater, and now we have seen it on the most important opportunity that this state has ever had in its history: being able to build the single largest procurement engagement exercise that has ever occurred in the history of Federation. Let it be known that on this side of the chamber we will do everything we can to fight for South Australian jobs, not capitulate and kowtow to their masters in Canberra.

Mr BROWN: Mr Deputy Speaker, I draw your attention to the state of the house.

A quorum having been formed:

Mr McBRIDE (MacKillop) (11:53): I rise to speak in support of the motion put by the member for Colton:

That this house—

(a) welcomes the federal Liberal government's commitment to the $90 billion shipbuilding program, which will secure the future of South Australia's defence industry for decades;

(b) notes the significant work being undertaken by the South Australian government to ensure that South Australians can reap the maximum benefit of the shipbuilding program; and

(c) notes the significant negative impacts on the current workforce as a result of the former federal Labor government's failure to progress any future shipbuilding contracts during its last term in office.

The $90 billion shipbuilding program committed to by the federal Liberal government has been a landmark decision which will reap benefits for South Australia for many years to come. The decision will modernise and strengthen Australia's naval forces and will underpin employment, build workforce capacity, investment, innovation and experience in shipbuilding in Australia. In particular for South Australian investment, it will yield significant economic benefits. The investment will create significant supply chain growth opportunities which are in addition to the more than 5,000 direct jobs that will be created through naval shipbuilding activities in South Australia.

The funding will enable the build of 12 Attack class submarines, which I am told is the largest defence procurement initiative in Australia's history. The funding will enable a $35 billion Hunter class frigate program, which will deliver nine antisubmarine frigates to the Royal Australian Navy and will create and sustain 1,500 direct jobs. This will be in addition to the 600 jobs needed for the redevelopment of the Osborne South Shipyard and provide opportunities through the supply chain. The supply chain benefits will be substantial. The new Lot Fourteen innovation neighbourhood will provide a location which will attract global companies to develop their Australian business strategy and plan local operations.

A new one-stop shop, supporting international defence companies to establish in South Australia, will drive defence industry investment. The Defence Landing Pad at Lot Fourteen will enable international businesses to build relationships with South Australian businesses and create opportunities for supply chain collaboration. The investment by the federal Liberal government will assist in bridging the unemployment vacuum that was created by the previous federal Labor government's lack of vision. Unfortunately, it dropped the ball regarding Australia's shipbuilding industry and its workers.

We know that in Osborne today the last program is winding up. I can tell you that there are still employees there today being told that their jobs are about to finish. The contract is now winding down and their jobs no longer exist until this shipbuilding operation is back up to speed, back on the build, where it should have been four or five years ago. We know that there are some employees being re-engaged down there, but they are not the same ones who have been told their job no longer exists because they have come to the end of that contract.

It shows that if this is going to be managed—and not to play politics with this and say that one side of politics is better than the other—it will require a united front on both sides of politics to recognise this as a big build for Australia. If we work together on the fact that it needs to happen in a methodical way that looks after the federal government's interests, the state government's interests and those of employees, contractors and builders alike, then it can be an absolutely wonderful opportunity for Australia.

To summarise, we know the new patrol boats are just starting off. I believe there are going to be two built in Adelaide to start off with, of the perhaps 12 that Australia will build. It is a starting point. They are employing people who start off by doing the groundwork, what we call laying down the keel. They will be building the bulkheads. There are no electricians yet. They are not mechanics, they are not chippies, they are not electricians or technologists with technical expertise, because they are not required right now. Those areas of expertise are not needed.

This is where the vacuum and the lack of cohesion from one build to the next needs to be absolutely methodical and straightforward so that all employees in this region can have a job from one week to the next, one month to the next and one year to the next. This is so we can create consistent work in a consistent workplace where people can live their lives, build houses and dreams and know that this work will continue for many years to come.

The ASC Shipbuilding Structural Adjustment Program, announced by the Australian government, will support workers who have been made redundant, and it will be backdated to 1 July 2018, because of the lack of foresight by our federal Labor government. I am advised that workers and their partners from ASC Shipbuilding or an affected supply chain business are also eligible for this program. The program will offer a range of services for employees both before their positions are discontinued and after. The types of services offered will include career advice, skills assessment and labour market information to assist people to make decisions on their next steps.

The service will also include intensive employment support through Jobactive employment providers, job search support and retraining. This program will include a $2,000 employment fund to assist workers to retain and obtain licences and tickets, as well as relocation assistance if required. The investment by the federal Liberal government and the efforts of the Marshall Liberal government in continuous naval shipbuilding will create thousands of jobs for decades to come. There will be a period of supported transition as our current shipbuilding workforce redeploys to new opportunities being created across our defence industry base. Two of the offshore patrol boats are currently being built by ASC, with production directly employing up to 400 workers at Osborne and 600 indirectly.

This gives me a bit of an opportunity to address the comments made by the member for Croydon (the Leader of the Opposition), who talked about the Collins class submarines and the history of Australian shipbuilding, as we know it so far. I do not want to play politics, but I want to make sure that our Liberal government recognises that it actually does take effort to ensure this will be a good and profitable build and one that builds a product that we can be proud of for many years to come.

I note that the six Collins class submarines that were started in 1990 and finished in 2003 were costed at $4 billion to start off but blew out to $5.1 billion—27 per cent; $5 billion to $4 billion is not much. This is a $90 billion build, and if we blow out that budget by 27 per cent, that is an extra $24 billion that this one overall contract will cost if we do not do it properly. It will blow out to $117 billion on the same basis as the Collins class submarines.

The opposition leader is worried about local content. Belonging to the Liberal Party government, I too want as much local content and build in South Australia as possible, but not at any cost, not at any blowout for many, many years beyond what it is meant to be. Absolutely, these boats have to work. There were six Collins class submarines. They only ever had, at some stage, a 35 per cent workforce working on the submarines because they were such high maintenance dependent. They were costing a fortune to maintain and operate. It was not just the worker base but also the fact that the Collins class submarine had huge issues of maintenance and standard.

One of the biggest pitfalls, they tell me, is that we changed our mind during the build. The defence system wanted this and then they wanted that, and then it did not fit and then it did not work, and they would not talk each other. Technological advances were always on the go. One of the things that I hope we do with this large contract is to make sure that this build is a good fit, works for Australia's purposes, does not blow out and is not at any cost. This is unlike the Labor Party on the other side, which says: 'Just employ people, just spend money, just get jobs.' No, not at any cost at all.

From my own history, having trained as a boilermaker/welder through an apprenticeship program, I am really excited about the investment the Marshall Liberal government is making to build the capacity and capability of South Australians. The program is going to yield a great many benefits for trade industries and it will provide opportunities for trainees. The more than 20,000 new apprenticeships and trainees that will be created have been made possible through the federal government's Skilling Australians Fund. They will offer really great opportunities for people to upskill and reskill in order to take advantage of new employment opportunities like this shipbuilding program.

These positions will be supported by the establishment of a new technical college in Adelaide's western suburbs, with a focus on defence, and a range of other measures, including the re-establishment of industry skills councils to give industry a strong voice and a pathway to work, with government to strengthen and influence the vocational education training system. I commend the motion to the house.

The Hon. Z.L. BETTISON (Ramsay) (12:03): I rise to speak on the amended motion. One of my motivations for being in politics was employment. When I finished school and university, it was really difficult to get a job. I had fantastic mentors. My parents both worked. They had a business, and they supported post secondary education. My concern today is this issue because when I am out doorknocking people ask me, 'What are the jobs of the future? What will my children do? What will my grandchildren do?' We know that we have a fantastic opportunity in South Australia with this shipbuilding program. We all agree that this is a wonderful opportunity.

There are discussions that there will be up to 25,000 jobs in South Australia, so imagine my disappointment and my surprise that there is absolutely no commitment to local content. How do we expect our parents and grandparents to encourage their children to train in the areas that are going to be needed for this shipbuilding program?

I acknowledge the Skilling Australia program and I acknowledge the Naval Shipbuilding College, but what we need to do is make all South Australians aware of what the jobs are and the pathways to get those jobs. Whether it be an electrician, a mechanic, a welder, a fitter and turner, like my own father when he did his apprenticeship, or be skills in technology or design, we know that those jobs are going to be needed.

What we do not know is if those 25,000 proposed jobs are ever actually going to happen, because what we hear is the politics being played out. When we hear people being told in November 2017 that we are going to create 25,000 jobs in South Australia, and in December 2018 being assured by minister Pyne that these jobs will be delivered through an assured level of local content, that this will be a local build, that is what our parents and grandparents hear. 'Fantastic! This is what we are going to encourage our children to do.'

We know that science, technology, engineering and mathematics are going to be crucial in taking up these jobs. I am excited about it. This is something that we can share. We can be part of world's best practice of this amazing advanced manufacturing. We welcome it; this is fantastic. But when we hear that there is no guarantee of local content, how can we say this to our South Australians? How can we encourage them to train in this sector? This is the concern that I raise with this issue today.

What I am very concerned about is our Premier not standing up for our state. Sure, he might have been there for the signing, but where is his commitment, where is our understanding of the state government supporting, encouraging and knowing how many of these jobs there will be? That is why I rise today to support the amended motion.

Mr PATTERSON (Morphett) (12:07): I rise to welcome the federal Liberal government's commitment to the $90 billion shipbuilding program that is centred in this state and to speak in support of the member for Colton's motion. We know that as the program to build air warfare destroyers at the Osborne naval shipbuilding precinct comes to an end, the federal government is now centring its naval shipbuilding program in South Australia, with the construction of the first two offshore patrol vessels, followed by the Future Frigate program and the submarine program.

This $90 billion commitment will modernise and strengthen Australia's naval forces. We know that ASC has built up considerable skills over the last 10 years on the air warfare destroyer program, and the highly skilled shipbuilders, in conjunction with this new naval shipbuilding program, can be the basis for building a strong, sustainable sovereign Australian shipbuilding industry. It will certainly define the future of advanced manufacturing in Australia and it is happening right here in South Australia.

These first two offshore patrol vessels are going to be constructed in South Australia by ASC and will overcome the valley of death between the end of the air warfare destroyer program and the beginning of the Future Frigate program. Unfortunately, prior to the commitment of the construction of these first two offshore patrol vessels at Osborne, the gap saw the steady release of the workforce and hence the loss of valuable skilled workers prior to the commencement of the Future Frigates shipbuilding program.

It was therefore welcome news when in November 2018 work began on the first of these offshore patrol vessels at Osborne, with the welding of the first two component blocks of steel that will form part of the first vessel. The new ships will be known as the Arafura class, with the first to enter service in 2022 to be called the HMAS Arafura.

The ASC chief executive noted that the construction of the first of the offshore patrol vessels is the company's second surface shipbuilding project and will see Australia embark on a continuous naval shipbuilding program for decades to come. This multidecade program is set to deliver unprecedented economic benefit to South Australia. The offshore patrol vessels that are being built will directly employ approximately 400 workers at Osborne and create another 600 indirect jobs.

Following from that, the Future Frigate program, which will involve the construction of nine high-end antisubmarine warfare frigates, will replace the eight ANZAC class frigates. Construction is due to commence at Osborne in 2020 and has a total program value of $35 million, creating approximately 1,500 direct jobs.

BAE Systems was announced as the successful tenderer for the antisubmarine warfare frigates, and these Hunter class frigates will be the most advanced antisubmarine warships in the world. This is a big deal not just for South Australia but also for the United Kingdom, with the news of the wins being welcomed by the Secretary of State for Defence, Gavin Williamson, who referred to the project as the biggest maritime defence deal of the decade. We can see that there are terrific opportunities and they are based right here in South Australia.

This has required the redevelopment of the Osborne naval shipyard because there is the requirement to build not only ships but also the construction site to build them. This has already started and is scheduled to be completed by 2020. The infrastructure itself has an estimated cost of $535 million and the redevelopment will create up to 600 jobs. We have already seen the earthworks commenced, the piles being laid and over 55,000 cubic metres of concrete being placed in the foundations. The structural steel for these sheds has been ordered from Australian steelmakers BlueScope Steel and Liberty OneSteel in Whyalla in preparation for the main fabrication and assembly halls.

In fact, in December 2018, the steel raising for the new shipyard involved the elevation of more than 8,000 tonnes of structural steel, which had been fabricated by local South Australian companies. Two of these local suppliers were Samaras Structural Engineers and SA Structural. These are two of over 50 local suppliers involved in the project. We talk about delivering jobs for South Australians, but actions speak so much louder than words—and this is certainly one of them.

I would also like to touch briefly on the Future Frigates. Construction is also due to commence in 2023 at Osborne, with a total program value of $50 billion. As we have heard from others in this house, that represents the single biggest defence spend in this nation's history, and it is happening right here in South Australia. Again, the Naval Group Australia estimates that 2,800 jobs will be created in South Australia; of those, approximately 1,100 will be direct jobs and then a further 1,700 will be supply chain jobs.

It is also estimated that the shipbuilding workforce will need to increase by some 3,600 staff from 2021. Around 77 per cent of these are tradespeople in fabrication and electrical and mechanical engineering. Further to that, as the member of Colton mentioned, on 11 February 2019 the Strategic Partnering Agreement was signed between the Australian government and Naval Group Australia. Work on the submarines has taken place under a design and mobilisation contract. The formalisation of this agreement represents the contractual basis of the program.

The federal government's Naval Shipbuilding Plan states that the shipbuilding workforce in South Australia will need to increase by around two to three times from current employment levels, with demand for construction workers reaching a peak of around 5,200 in 2026. While continuous naval shipbuilding will create thousands of jobs for decades to come, unfortunately there is a period of transition as our current shipbuilding workforce redeploys to new opportunities being created across our defence industrial base.

Just by outlining the extent of the shipbuilding program to occur between now and 2030 in South Australia, we can see that the size and skill levels of the naval shipbuilding force in South Australia will need to increase significantly to meet demand. That is why the Marshall Liberal government is developing a comprehensive defence work plan. We talk about having minimum requirements for local content, but we need to make sure that over and above that we have the skills in place to grab this opportunity.

We are looking at funding over 1,200 apprenticeships within those qualifications I have mentioned previously over the next four years. This is part of our commitment where we allocated $100 million in the recent state budget to also secure $87 million of funding from the federal government's Skilling Australians Fund. This will support the creation of an additional 20,800 apprenticeships and traineeships in South Australia.

This really shows, if we need to skill our workers to be able to provide local jobs rather than just having a commitment inked on paper, how it will further solidify, because employing a local workforce that is skilled will be so much more economical as well as reliable. It is necessary for the future success of these three significant projects.

Another step the Marshall Liberal government is taking in the planning process is the recent announcement of the Defence Landing Pad, which will be located in Adelaide's new innovation neighbourhood at Lot Fourteen. This will provide a home for global companies to develop their Australian business strategy and plan local operations. It will be a one-stop shop that will support international defence companies to establish here in South Australia and drive defence industry investment. It will also provide a terrific opportunity for South Australia to capture new defence industry investment as part of a growing local industry with significant employment opportunities.

The companies will also have access to government and industry support services in one single location. These will provide assistance with local regulations, business establishment and real estate as well as provide information on workforce availability and skilling opportunities. Further to those skilling opportunities, just yesterday it was reported that Adelaide University, Flinders University and the University of South Australia have signed an agreement with French company Naval Group and the National Centre for Scientific Research to found an international research laboratory right here in Adelaide. This research lab will work on artificial intelligence, autonomous systems and human factors as well.

Again, this will skill many South Australians not just in the defence industry but also in the broader advanced manufacturing industry with desperately needed skills in this state, and that will help grow a new industry here and provide jobs for many decades to come. In fact, Flinders University Vice-Chancellor Professor Colin Stirling said that Adelaide was an ideal location for such a laboratory. The members for Waite and Davenport and I met with Professor Stirling, as well as with staff of Flinders University, last year regarding how they are trying to build these sorts of relationships to work not only with the defence industry but also with advanced manufacturing.

South Australia's economic future will be significantly bolstered through this naval shipbuilding program. The Marshall Liberal government is working very hard to maximise local employment opportunities for all South Australians.

The ACTING SPEAKER (Mr Pederick): Chair of Committees, member for Flinders.

Mr TRELOAR (Flinders) (12:17): Thank you, Mr Acting Speaker; what a fine job you are doing. I rise today to make a contribution to the very important motion brought to this house by the member for Colton. It is a very important motion because it is a very exciting time for South Australia. The motion reads:

That this house—

(a) welcomes the federal Liberal government’s commitment to the $90 billion shipbuilding program, which will secure the future of South Australia’s defence industry for decades;

(b) notes the significant work being undertaken by the South Australian government to ensure that South Australians can reap the maximum benefit of the shipbuilding program; and

(c) notes the significant negative impacts on the current workforce as a result of the former federal Labor government’s failure to progress any future shipbuilding contracts during its last term in office.

The Australian government has committed $90 billion over the coming decade to modernise and strengthen Australia's naval forces whilst building a strong, sustainable, sovereign Australian shipbuilding industry. That naval shipbuilding is set to deliver unprecedented economic benefits to South Australia.

We have always had a history of shipbuilding in South Australia from the very early days. We were a coastal colony, and shipping was very much a part of our small and insular economy even then. Shipbuilding in South Australia began even before formal white settlement. In 1803, American whalers built the 30-tonne Independence at American River on Kangaroo Island—and I have no doubt the member for Bragg is well aware of that.

So shipbuilding began in the very early days and it continued, but a perennial problem for South Australian shipbuilders was the lack of suitable timber. Much was imported from the other colonies, in particular Tasmania and New South Wales. The government dockyard was operating by the 1850s and, along with a shipyard at Goolwa, was producing paddle steamers and barges for the River Murray trade—interesting and exciting times.

Shipbuilding continued and reached a new peak in the 1940s. Whyalla was famous for its iron and steel but also for its shipbuilding industries. We manufactured our first ship for the Royal Australian Navy even before the Japanese had bombed Pearl Harbor in December 1941. A total of 58 ships were built in the Whyalla shipyards. Ultimately it closed in 1978, which was a sad day, but we proved that we could do it, and it was a really important part of the state's economy, for Whyalla in particular.

In between times, we had been building coastal ketches, and many wooden and timber boats were made in backyards at home. In fact, my own Uncle Wilf built a boat called the Saucy Ann, which he steamed from Port Lincoln to Coffin Bay, and if he had not had Axel Stenross with him he would have turned back—that is what he told me anyway.

We, of course, were building Collins class submarines in the 1980s. There were a few problems associated with those submarines, as the member for MacKillop pointed out, and we are now about to embark on building Future Frigates and Future Submarines. It is a very exciting time for South Australia. Around 5,200 direct jobs will be created through naval shipbuilding activities in South Australia, and many more supply chain opportunities.

The contract to build 12 Attack class submarines in this state is the next step forward. It is a $50 billion project—huge numbers. It is a mammoth undertaking; we are proud to take on the challenge. It is the largest defence procurement in the nation's history and is an undertaking of national firsts in size, scale, complexity and duration. In fact, it will define the future of advanced manufacturing in Australia, and it is happening right here in South Australia. It is a critical transition for our manufacturing sector to take us into the 21st century.

The $35 billion Hunter class frigate program, which will deliver nine antisubmarine frigates to the Royal Australian Navy, will create and sustain 1,500 direct jobs, in addition to the 600 jobs needed for the redevelopment of the Osborne South shipyards and opportunities through the supply chain. As well as that, two offshore patrol vessels are being built by ASC Shipbuilding, with production directly employing up to 400 workers at Osborne and creating 600 indirect jobs.

The Defence Landing Pad, which has been spoken about by members on this side, is to be located in Adelaide's new innovation neighbourhood at Lot Fourteen here in the CBD and will provide a home for global companies to develop their Australian business strategy and plan local operations. This undertaking is attracting global interest. A new one-stop shop supporting international defence companies to establish in South Australia will drive defence industry investment, and where better to do it than right here in South Australia? The Defence Landing Pad will enable international businesses to build relationships with South Australian businesses and create opportunities for supply chain collaboration.

In relation to training and skills, our government is committed to maximising the local benefits for this huge investment into our state, which includes ensuring that we have the skilled workforce needed to deliver this project. We are also introducing measures to further develop South Australia's skilled workforce by working with industry to strengthen South Australia's VET system, including giving industry a stronger voice through the re-establishment of the Industry Skills Council.

Most significant in all of this is that we will be creating more than 20,000 new apprenticeships and traineeships utilising the federal government's Skilling Australians Fund. This is significant: it gives school leavers the opportunity to take on a trade, undertake their training and, more importantly, to live and work in the state they grew up in. I think that is a critical point in relation to this project. I know that we have a number on this side who have undertaken apprenticeships in the past and become skilled in their trades and are very proud of that, and we will be continuing that tradition in South Australia.

So, while continuous naval shipbuilding will create thousands of jobs for decades to come, unfortunately there will be a period of transition as our current shipbuilding workforce redeploys to new opportunities being created across our defence industrial base. But, by and large, it is a tremendously exciting project. It will set up South Australia's industrial base for the coming decades, and set us in good stead for the 21st century, and really set us up as the defence state in this commonwealth.

Ms LUETHEN (King) (12:24): It is my pleasure to rise to speak to this motion because our government was elected on a platform of jobs, better services and lower costs. I am therefore rising to support this motion, which recognises that the Australian government has committed $90 billion over the coming decade to modernise and strengthen Australia's naval forces, while building a strong, sustainable sovereign Australian shipbuilding industry—which we will benefit from in South Australia—and that is fantastic news.

Naval shipbuilding is set to deliver unprecedented economic benefit to South Australia. Around 5,200 direct jobs will be created through naval shipbuilding activities in South Australia, plus many more supply chain opportunities. When I have been out doorknocking over the last five years, both as a councillor and now as a state member, one constant piece of feedback and ambition from our community both young and old has been a priority to create more jobs in South Australia. The landmark contract to build 12 Attack class submarines in South Australia is the next step forward in this $50 billion project. This project is the largest defence procurement in the nation's history and is an undertaking of national firsts in size, scale, complexity and duration. It will define the future of advanced manufacturing in Australia, and it is happening right here in South Australia.

On 11 February 2019, a Strategic Partnering Agreement was signed by the Australian government and Naval Group, and work on the submarines has taken place under the design and mobilisation contract. The formalisation of this agreement represents the contractual basis for the program. The $35 billion Hunter class frigate program, which will deliver nine antisubmarine frigates to the Royal Australian Navy, will create and sustain 1,500 direct jobs, in addition to 600 jobs needed for the redevelopment of the Osborne South shipyards and opportunities through the supply chain. Two offshore patrol vessels are being built by ASC Shipbuilding, with production directly employing up to 400 workers at Osborne and 600 indirect.

The Australian government has not made a decision to move deep level maintenance to Perth. Let me make this clear: the Department of Defence is creating options to prepare for contingencies, and it is the National Security Committee that decides these matters. The Defence Landing Pad, to be located in Adelaide's new innovation neighbourhood, Lot Fourteen, will provide a home for global companies to develop their Australian business strategy and plan local operations.

A new one-stop shop supporting international defence companies to establish in South Australia will drive defence industry investment. The Defence Landing Pad will enable international businesses to build relationships with South Australian businesses and create opportunities for our supply chain collaboration. Let us look at training and skills and how we are preparing for this.

The Marshall Liberal government is committed to maximising the local benefits of this huge investment in our state, which includes ensuring that we have the skilled local workforce needed to deliver this project. Investing in training equipment like welding simulators and providing funding for additional work-based apprenticeships will help us to create the skilled workforce that is required to fully capitalise on the naval shipbuilding program. The Marshall Liberal government is also introducing the following measures to further develop South Australia's skilled workforce:

we are working with industry to strengthen South Australia's VET system, including giving industry a stronger voice through the re-establishment of industry skills councils;

we are creating more than 20,000 new apprenticeships and traineeships, utilising the federal government's Skilling Australians Fund;

we are reforming the subsidised training list so that it is guided by industry and opening up funding contestability; and

we are establishing a new technical college in Adelaide's western suburbs with a focus on defence.

The Australian government has announced the ASC Shipbuilding Structural Adjustment Program to support workers who have been made redundant, backdated to 1 July 2018. Workers and their partners from ASC Shipbuilding or an affected supply chain business are eligible for this program.

The program has two components. Pre job loss transition support will include skills assessment, career advice workshops and information on local labour market intelligence. This component will be delivered by Hender. The second component, post job loss, provides immediate access to intensive employment support through Jobactive employment providers, including job search, which is preparing résumés and preparing for interviews, retraining and self-help facilities.

The support includes immediate access to intensive employment support through Jobactive employment providers, including job search. This should be a terrific support to these people, who might need to change their career for a period of time. The assistance includes a $2,000 employment fund to assist workers to retrain and obtain licences and tickets, as well as relocation assistance if required.

Let's just for a moment outline the federal Labor government failures. Any job losses at ASC and elsewhere in the shipbuilding industry are a result of Labor's valley of death. As the air warfare destroyer programs near completion, the Air Warfare Destroyer Alliance, including ASC Shipbuilding, has been steadily releasing its workforce. While continuous naval shipbuilding will create thousands of jobs for decades to come, there will be a period of transition as our current shipbuilding workforce redeploys to new opportunities being created across our defence industrial base.

In February 2019, in our last parliamentary session, I had the opportunity to ask the Premier for an update on the formal signing of the $50 billion Future Submarines contract and what this project will mean for South Australia. I was so happy to hear the good news in reply from the Premier. He said:

What a happy day it was for South Australia yesterday when I was in Canberra for the signing of the Strategic Partnering Agreement between Australia and the Naval Group, between Australia and France, between the people of this state and the people of France. What a great outcome for our state…We are on the precipice of an unprecedented flow of work to South Australia…

This is exactly what my King electorate want to hear and what they have been asking for. The Premier reminded us all that zero vessels were commissioned under the Rudd-Gillard-Rudd debacle. He also told us that 54 separate vessels had been commissioned by the Coalition, and they will create a huge amount of work coming to South Australia for generations to come, and this is very, very good news for the people of our state. We absolutely love jobs coming to our state because this is what South Australians and the people living in King told me matters to them. They care about jobs and they care about our young people being able to have the choice of a career in South Australia.

The Premier told us that signing the strategic partnership agreement was a signature for a $50 billion plan, and that is only part of the work that is coming to South Australia—a total of $90 billion. Construction work is underway at the moment on the massive frigate yard, and it has already been decided to build a massive submarine yard. More than $1 billion worth of construction work is underway right now down at Osborne. We have set to work. I also commend the Minister for Industry and Skills, who has worked very hard to make sure that we have the skills in our community in place.

The yard is underway and the Naval Shipbuilding College, a fantastic new facility, is underway so that we can prepare for the jobs of the future and the skills for the future. I am really looking forward to securing South Australians' future in SA, and we will do all we can to ensure South Australians reap the maximum benefit of this program.

Mr HUGHES (Giles) (12:34): I guess the question is about maximum benefit. We all want to see these incredibly important projects that are going to happen here in South Australia maximise the state's opportunities, especially when it comes to the provision of jobs. That is why it was concerning that, in the negotiations that took place, the federal government did not lock in obligations in relation to the provision of employment in these important naval build contracts.

At one stage, the federal government indicated that 90 per cent of the work, or 90 per cent of the jobs, would be sourced here in South Australia, but then that dropped again. Upon closer questioning recently from Senator Penny Wong, it became very apparent that, contractually, the companies involved were not locked in to job numbers or job percentages in South Australia. That is a source of concern, but it is not to say that these projects are not going to be significant or very significant job generators.

I think the federal government have some form on maximising local opportunities. I know this full well, given the crisis we went through in the steel industry and in the lead-up to the steel industry going into administration. As the local member, I entered into debate with the federal government about mandating the use of Australian steel on federally funded projects, and they just would not come to the party. They belatedly did some work on protecting the industry from a range of dumped steel products, but when it came to using their ability, their capacity, especially in conjunction with the states, for federally funded or partly federally funded infrastructure projects, they would not mandate the use of Australian steel.

I always attempt to be fair, and there are some projects where they are using Australian steel. The Inland Railway project will be using steel sourced from Whyalla as the only producer of rail in the country, and there have been one or two other projects. However, instead of taking a more generalised approach to ensuring that we maximise the use of Australian steel, that has been lacking.

When it comes to the submarines, there is a little bit of a rewrite of history. We know that the submarines were going to go offshore to Japan, and we know that was the Abbott government's intention. If we as a state had taken a passive approach, the submarine contracts would have been lost overseas. However, to the credit of the Weatherill government, a concerted state campaign was launched to secure those contracts for South Australia.

It was always interesting that a number of federal Liberal politicians, when discussing the submarines, would consistently talk about the Whyalla Steelworks. There is no doubt that the Whyalla Steelworks will get some of the work, but the federal Liberal members would often refer to the submarines themselves as being built with the use of Australian steel. I will not bore members with tonnages and throughputs in the steel industry in Australia, but to not just imply but explicitly state that the steel for the submarines would be sourced from Whyalla was utter nonsense because we do not produce a flat product at Whyalla and we do not produce the specialised flat product at Whyalla.

Whether BlueScope, which does produce a flat product, produces the nature of the product needed for the submarines is questionable. However, the overall tonnages we are talking about over an extended period of time for the building of the submarines are fairly marginal, even as a high-value product, when it comes to the steel industry in Australia. Clearly, other countries have the capacity to produce those specialised steels.

It would be great to see it happen in Australia, but the investment that would be needed would not be justified by the scale of the submarine project and the length of time over which it would be built. Clearly, some of the port facilities, some of the factory-like facilities, that are going to be needed and some of the long product will be sourced from the steelworks in Whyalla.

I think we need to remember not only the active campaigning to ensure that we got the submarines here in South Australia but also that governments past—Labor governments past—took a calculated risk in making very significant public investment in Techport. It was an incredibly important initiative that has paid dividends for our state from thereon. I cannot recall whether the Liberal opposition at the time supported that public expenditure. It would be interesting to go back. I would not be surprised to see that they had attacked public expenditure on Techport because we were talking about a significant amount of money, but it was a significant amount of money that was well invested to benefit the future of our state.

I think it is important—I know that there are some tradespeople opposite—that I have a few words to say about the naval contracts. I am probably the only person in this chamber who has actually worked in a shipyard, in the double bottoms and tanks of ships, as a painter, docker and grinder. I know the capacity of shipbuilding to provide a whole range of jobs from semiskilled to trade jobs to professionally qualified people, such as engineers and others.

It is an incredibly important job generator for a state like South Australia, so I am not going to say that the lack of a lock-in in percentages is a disaster because, clearly, there are going to be jobs. But I do feel that we are failing to maximise the benefits for the state by not being up-front and explicit in the signing-off of contracts. The more jobs that we create here in South Australia and the fewer in France and elsewhere is what we should be seeking.

Mr PEDERICK (Hammond) (12:42): I rise to support the motion:

That this house—

(a) welcomes the federal Liberal government's commitment to the $90 billion shipbuilding program, which will secure the future of South Australia's defence industry for decades;

(b) notes the significant work being undertaken by the South Australian government to ensure that South Australians can reap the maximum benefit of the shipbuilding program; and

(c) notes the significant negative impacts on the current workforce as a result of the former federal Labor government's failure to progress any future shipbuilding contracts during its last term in office.

The Australian government has committed $90 billion over the coming decade to modernise and strengthen Australia's naval forces whilst building a strong, sustainable, sovereign, Australian shipbuilding industry. We have heard a lot of bleating from the other side, initially from the leader of the Labor Party (member for Croydon), the member for Ramsay and now the member for Giles about how many jobs and how much work South Australia will get.

Guess what? If we were only getting one job, it would be 100 per cent more jobs than Rudd-Gillard-Rudd got for South Australia and shipbuilding in this state. But we will have thousands of jobs coming to this state through the great work of the Australian federal government and the Marshall Liberal government, which I am so proud to be a part of, in making sure that we get this work so that we can keep these people employed.

We have seen what has happened with the Rudd-Gillard-Rudd failure where there has been a valley of death. We have had to put in programs to support workers coming out of that. Labor do not even support people from their own electorates working on these vessels to help secure the defence of our great nation.

I briefly want to contrast how many ships or vessels Labor commissioned under Rudd-Gillard-Rudd with what is happening now under a federal Liberal government. I will just look at the numbers. That is right: zero under Rudd-Gillard-Rudd and federal Labor when they were in power. I will give you the number of how many are going to be commissioned under an Australian federal Liberal government: 74 vessels. What a boost to this state and to the federal government of Australia.

It just smacks of utter hypocrisy that the state opposition in the Labor Party are bleating about jobs. When they should have been fighting for jobs and lobbying the Rudd-Gillard-Rudd government, they were caught up in their own turmoil. I am so proud that we are delivering and that the federal government are delivering. It is such a great thing for this state to have this massive level of investment. Any day of the week, 74 vessels beat zero. I commend the motion and commend the member for Colton for bringing it to this house.

Mr COWDREY (Colton) (12:46): I thank all members who have contributed to the motion today: the members for MacKillop, Flinders, Morphett, King, Hammond, Croydon, Ramsay and Giles, no matter how verbose or fanciful their contributions. I could finish by reiterating the failings of the Labor Party with regard to naval shipbuilding here in South Australia, but they have been well recited in the chamber today. No amount of spin or pandering will change the fact that the Rudd-Gillard-Rudd government failed to provide a sustainable pipeline of work in naval shipbuilding here in South Australia. I will instead reinforce that the Marshall Liberal government is committed to maximising the local benefits of this huge investment into our state by the federal Liberal government. I look forward to support for the original motion.

Amendment negatived; motion carried.

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