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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-02-21 Daily Xml
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Osborne Naval Shipyard

Mr PATTERSON (Morphett) (12:41): By leave, I move my motion in an amended form:

That this house—

(a) notes that the former federal Liberal government chose BAE Systems as the lead contractor for the construction of nine Hunter class frigates for the Royal Australian Navy to be constructed at the Osborne shipyard;

(b) notes that the former Liberal Government secured the full cycle docking program for the Collins class submarines at the Osborne shipyard;

(c) notes that the former Liberal Government secured the life-of-type extension program for the Collins class submarines at the Osborne shipyard;

(d) notes that the federal Labor government has cut the number of Hunter class frigates to be built at the Osborne shipyard from nine ships to six; and

(e) condemns the Malinauskas Labor government for their failure to stand up for South Australian defence industry jobs by ensuring that the federal Labor government continued to build the full complement of nine Hunter class frigates at Osborne shipyard.

To confirm, the amended motion entails a small change to paragraph (a), replaces paragraph (d) and adds in a new paragraph (e), and I talk to that motion. The uncertainty for the South Australian defence industry continues, with confirmation yesterday that the Hunter class frigate program will be cut from nine ships to only six ships, which is another broken promise by federal Labor. In place of those three ships that have been cut, there is a commitment to build a replacement of the Hobart class air warfare destroyer, but of course no decision on that will be made until 2035—there is no description of what that ship might even be. So the South Australian shipbuilding industry has again been left in limbo.

Previously, they were in limbo in waiting 18 months for a series of reviews that were being conducted by the federal government. First, it was waiting for the Defence Strategic Review that was released in April last year. When that review was released it built on some of the former federal Liberal government's reviews. The 2020 review reinforced a number of things, and the DSR did so as well. It reinforced that South Australia was central to the government's largest capability project to acquire nuclear powered and conventionally run submarines to be built at Osborne under the $368 billion AUKUS agreement.

The review also talked about minimum viable capability and offshore purchases by the military and the importance of continuous shipbuilding for the nation's sovereign capability. That is something that had been put out in previous government papers; it is not new. The importance of continuous naval shipbuilding was outlined in the Defence White Paper of 2016 and also the Naval Shipbuilding Plan of 2017.

Responding to this in December 2018, the former federal Liberal government signed the head contract with BAE Systems Maritime Australia to build nine Hunter class frigates for the Royal Australian Navy and for them to be constructed at the Osborne shipyard, which would then create continuous shipbuilding. This was put in place to overcome the valley of death that was created by the Rudd-Gillard-Rudd governments, which did not commission a single ship during its term in government.

These Hunter class frigates were to be optimised for anti-submarine warfare, to help protect our coasts and our shipping lanes, and were also designed to replace the ANZAC class frigates. The Hunter class frigates were to be based upon the UK's Type 26 Global Combat Ship, but modified to meet Australian requirements to protect our shores. This program was going to be a $45 billion program and at its peak employ upwards of 5,000 workers.

To get things going, the former federal Liberal government approved an initial $6 billion for the design activity to incorporate Australian requirements and to also conduct prototyping of the ships' blocks in a new shipyard that was also constructed at the Osborne shipyards in South Australia, and also to meet the long lead times that this project was going to have, to purchase long lead time items for the first three ships. There was budget already allocated toward the first three frigates being put in place as part of that.

Prototyping of the Hunter class began on 18 December 2020 at Osborne, and then that was followed by steel being cut by the first of class in December 2022. The ship is going to be constructed out of blocks—I think 29 or 30 blocks—that then are combined to create the entire ship. I have been fortunate to have had a tour of those shipyards, both as the Minister for Trade and Investment and now the shadow minister for defence industries, and to see how big that shipbuilding exercise is going to be and also how modern the shipyards are. The sheds there are massive. They allow for the construction of the blocks in an environment that is not subject to the elements, which makes a really big difference in terms of quality.

Looking at the shipyard, talking with the BAE staff, this is one of the most modern shipyards in the world. It is certainly much more modern than the equivalent shipyards in Glasgow. They do not have the legacy infrastructure that is hundreds of years old like a number of other shipbuilders throughout the world have. This is an important facet of the program.

As I said, on my tour I got to see the first block that had been constructed, and it gives you an idea of the size and also the construction techniques. This is to such a high standard that BAE are actually looking to have this as part of their first Hunter frigate. Seeing this scale, it is important to make the point that the Liberal Party provide bipartisan support for these shipbuilding undertakings here, because when it comes to South Australia's defence industries we support decisions that have been made in the national interest—the decisions on AUKUS, but also the Hunter frigates program. They are massive opportunities as well as sovereign capability.

As I said, the workers building these blocks were doing that during the lead-up to the Defence Strategic Review, which was released in April of last year. Out of that review, instead of confirming that, yes, the nine frigates will go ahead, instead there was more uncertainty, more delays, as a surface ship review was instead ordered, again creating massive uncertainty and delays. If you look at some of the comments from the defence industry over that period, there are comments from AIDN CEO, Brent Clark, saying companies cannot make any decisions, and defence cannot do any work until that is done. So it is causing massive uncertainty.

The federal Labor defence minister received this review back in September last year and has been sitting on it ever since. You have a defence industry wracked by uncertainty and chaos, and I just wonder what the future holds here. That has been going on for 18 months.

Knowing there was this uncertainty, and seeing the impact on the workers in South Australia, the opposition called on a public version of this surface fleet review to be released as soon as possible. That was before Christmas last year. At the same time, we also called on the Premier and the Minister for Defence Industries to go over to Canberra and persuade their federal Labor colleagues to back the nine ships being built here at Osborne. Unfortunately we saw no urgency, not from the Premier, and none from the Minister for Defence Industries. That was very concerning.

We saw no public declarations from the government urging their federal counterparts to make sure the Hunter class program was delivered as promised, delivering those nine ships. Instead, what we heard on radio was the Premier appearing to foreshadow a reduction in the scope of the Hunter class program, saying that if the federal government was serious about continuous shipbuilding the announcement of at least six frigates was required.

All of a sudden, two weeks later we had the Premier doing a mercy dash over to Canberra—just two weeks ago, before the announcement yesterday. You really have to wonder how influential a trip like that could have been in terms of the decision-making process that had been sitting on the minister's desk since December. It really was a case of too little too late, and could well have been much more of a PR exercise for the SA public than anything else.

Then we have the Premier's language after that all of a sudden changing, preparing South Australians for the bad news that there would be a cut to the number of frigates, really caving in to his federal colleagues and trying to defend them out in public.

Finally, yesterday we had the federal government release its response to that surface fleet review. What it showed was that WA had a significant win with the announcement that there would be eight frigates built at Henderson. For South Australia, it was confirmed there would be a cut to the number of frigates built at Osborne, down from nine ships to six ships. To offset this reduction there was a verbal commitment to build the replacement for the Hobart class air warfare destroyer, but with no decision happening until 2035. The type of ship is unknown; that will be decided by the Navy in the future.

The reality is that the announcement yesterday definitely amounted to a cut to the frigates program and a verbal commitment to build a replacement to the AWD, with the decision happening by 2035. That is 11 years away, and there is no budget attached to this promise.

The Premier has been out there trying to make a positive spin, saying that the six frigates have been locked in. However, as I said, the opposition has bipartisan support for the construction of these Hunter frigates and there is the money already spent there, the effort put in there, the time put in to the design of the Hunter class frigate, the massive sheds built there, the most modern shipyard in the nation.

As well, the federal government has a rolling integrated investment budget for defence that stretches for 10 years into the future—longer than the usual four-year budget cycle—and there was money in that that was to be drawn down for Hunter. So the Hunter class was going ahead. Yes, it is good to have confirmation of the construction of the first Hunter class frigates, but the real confusion and delay was a direct result of the lengthy review process.

Then we had the Premier on radio trying to say that the nine frigates were only a promise. On FIVEaa radio the Premier made the point that unless dollars are in the budget a commitment is not real. The idea that there was no money in the budget for the frigates is ridiculous; as I said, there was money in the budget for the Hunters both in the four-year federal budget cycle and also over the longer 10-year horizon that the defence budget operates over. However, by the Premier's own admission, any announcement regarding the Hobart class AWD replacement ship is not real money until it is in the budget.

In this case we have no nomination of the ship type yet by the Navy—it might not even be an AWD. By the time the decision is made it could be another optionally manned vessel. We certainly do not have a design or anything to put to tender, and there is no budget any more than 10 years away. We know in the lead-up to this the Australian Industry Defence Network CEO Brent Clark on radio has been talking about this. In previous comments he also said, 'When we talk about 20 years into the future, when we talk about 2043 for the end of the Hunter class build, there's no financial commitment, there simply isn't.'

By the Premier's own definition of what is real and what is not real, the promise to build the replacement for the Hobart class is not real until money is coming in. Out of this there is uncertainty, there are questions: what class of ship will it be; when will the construction of the first ship commence; how many workers will be required; what will be the percentage of Australian industry content; has that been locked in; and, will there be more or fewer workers required than for the Hunter frigate program? When nine frigates were being built, we knew how many workers there would be for the seventh, the eighth, the ninth ship build.

Again, referring back to some comments by AIDN CEO Brent Clark, he said publicly that six Hunter class frigates on their own would not meet the federal government's promise of a continuous naval shipbuilding program here in Adelaide. The Premier is relying on a verbal promise from federal Labor of continuous shipbuilding, when the reality is that the only announcement confirmed yesterday is a cut to shipbuilding in SA.

So, unfortunately for South Australians, fewer ships means fewer jobs and fewer skills. The opposition has long said that anything less than the nine promised frigates would be a failure from the Premier, and yesterday's announcement shows that he and his Labor colleagues have let down South Australians.

Mrs PEARCE (King) (12:56): I move to amend the motion as follows:

(a) remove (a) and insert new (a) 'notes that the federal government has chosen BAE systems as the lead contractor for the construction of the Hunter class frigates and a replacement vessel for the Navy's Hobart class destroyers for the Royal Australian Navy to be constructed at the Osborne shipyard;'

(b) remove (b) and insert new (b) 'notes that the former Liberal federal government considered moving the full cycle docking program for the Collins class submarines from the Osborne shipyard to Western Australia;'

(c) remove (c) and insert new (c) 'notes the Labor federal government announcement that continuous shipbuilding will be funded at Osborne; and'

(d) remove (d) and insert new (d) 'supports the Malinauskas Labor government in standing up for South Australian defence industry jobs and continuous shipbuilding at the Osborne shipyard.'

It is interesting to note some of the comments just made, in particular with some of the amendments pertaining to BAE, particularly considering that previously we heard from a teammate completely dissing on initiatives that are in partnership with BAE, initiatives that are there to bolster the workforce for these very important projects we are speaking about now.

I am so pleased that the long-term continuous naval shipbuilding in Adelaide has been secured for decades to come, with the federal government confirming it will proceed with the construction of Hunter class frigates and a replacement vessel for the Navy's Hobart class destroyers at Osborne. Hunter class frigates will be built continuously in Adelaide through to the early 2040s, and will be followed by the replacement for the Hobart class air warfare destroyers, which will also be built right here in Adelaide.

Deputy Prime Minister and Minister for Defence, the Hon. Richard Marles, MP, announced an $11.1 billion increase in the nation's investment in sovereign naval capability over the next decade. This brings both acquisition and sustainable investment in the fleet of 26 major surface combatants to a total of $54.2 billion over the next decade, raising our nation's defence spending to 2.4 per cent of the GDP by the early 2030s.

This is a transformative investment for the South Australian defence industry, importantly because it underpins the creation of 2,500 direct, well-paid and, if they should so choose, lifelong careers for South Australians. It is great news for jobs in our state and it is great for our state's economy.

As many of us are aware, the Osborne Naval Shipyard, which is currently undergoing a significant expansion of its submarine construction yard, representing an estimated $2 billion infrastructure investment, will remain at the epicentre of the nation's shipbuilding endeavours. This gives the South Australian defence industry, including defence primes, workers and supply chain companies, the security that they have been demanding.

South Australia is well placed to provide the right setting and interventions to support the design and construction of major defence projects critical to our nation's security needs. These include helping industry to raise, train and sustain a suitably qualified and experienced workforce, and developing and sustaining the necessary industrial capability. The industrial base and skilled workforce firing up now to construct the Hunter class frigates is a key stepping stone to our state's future ability to deliver the SSN-AUKUS fleet of conventionally armed nuclear powered submarines, the most complex machines that have ever been built. I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 13:00 to 14:00.

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