Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that naval shipbuilding:

(a) is critical to:

(i) the Australian economy;

(ii) sovereign capability; and

(iii) national security; and

(b) creates thousands of specialist jobs across advanced engineering and high technology industry sectors;

(2) further notes:

(a) that the termination of the Naval Group French submarine contract caused the loss of thousands of jobs and contracts with defence industry sector businesses;

(b) the continued uncertainty relating to the Australia-United Kingdom-United States nuclear submarine announcement about:

(i) where the submarines will be built;

(ii) who will build them;

(iii) Australian workforce participation in the build;

(iv) the workforce skills required;

(v) the number of submarines required;

(vi) the cost of the replacement submarines; and

(vii) the delivery date of the submarines; and

(c) the recent concerns about the performance and few opportunities for Australian firms on the Future Frigates; and

(3) calls on the Government to:

(a) respond to the questions raised about the replacement submarine contract;

(b) ensure that all Australian naval shipbuilding contracts maximize Australian workforce participation with public, transparent and audited mandatory minimum content requirements; and

(c) ensure that all naval procurement is fit for purpose, value for money and delivered in a timely way.

The coalition has been in government in this country for 19 of the last 25 years, and it has been in government for the last nine years. Today, when the government talks up the importance of national and regional security, when there is instability in the region and when Australia should be prepared, Australia has an ageing submarine fleet, no submarine replacement contracts and no clear path for the replacement submarines. All we have is an announcement about nuclear submarines and an agreement with the USA and the UK. None of us know what's in that agreement, but we have, supposedly, an agreement. We don't know who the supplier is going to be, we don't know how many submarines are going to be ordered, we don't know what the cost will be, we don't have a delivery date, and we have no commitment whatsoever on the Australian workforce content or even the skills that will be required if we do have Australian participation in the build. Simultaneously, we have thousands of workers and small businesses throughout this country who had secured contracts and work from the French submarine replacement program who have been left hanging with no contract, no work and no certainty about their own future. Hundreds of millions and perhaps even billions of dollars have been wasted over the French submarine contract. Again, we'll probably never know what the real figure is, but there is no doubt that the figure will run into that amount of money—such has been the incompetence of this Morrison government. In the last nine years this coalition government has gone from a Japanese proposal, under the Abbott prime ministership, to a French contract, under the prime ministership of Mr Turnbull and the then Minister for Defence, Minister Pyne, to the US-UK nuclear option under Prime Minister Morrison and the Minister for Defence, Mr Dutton. This is a serious issue. The Australian government's incompetence has undoubtedly damaged Australia's credibility and trust around the world, particularly with important allies in Japan and the European Union.

Now we have credible reports that the proposed Hunter class frigates may also not be fit for purpose. The BAE model is reportedly too slow, unsafe and more costly to run. These are huge investments, estimated at $45 billion for the nine frigates alone. To have doubts about the design and suitability before we even start the build again highlights the incompetence and bungling of this government. I hope we don't go down the path of seeing hundreds of millions of dollars wasted again. What is somewhat concerning is that BAE, which is the builder of these frigates, has also been suggested as the possible builder of the submarines. That in itself raises questions. Of course, none of the government ministers responsible for those decisions are likely to be around in 10 or 20 years time or whenever any of these vessels are delivered, be they the frigates, which are supposed to come online in 2033 or thereabouts, or the submarines, in 2040. They won't be around to be held to account for their decisions today, just as former minister Christopher Pyne, who campaigned on delivering the submarine contract to South Australians in 2016, is no longer here to account for the embarrassing backflip and failure of his government to deliver for South Australia.

The real issue here is that the naval fleet, and the work attached to it, is so important, particularly given this government's decimation of the auto industry around Australia and particularly in South Australia, where the hope was that the naval contracts would at least pick up some of the losses that we incurred as a result of the auto industry being closed. Sadly, we have no guarantee at all that that will be the case, particularly with the submarine contract, which for the last six or seven years has been mooted as being a winner for South Australia. We now have an agreement which tells us nothing about where the submarines will be built, how many jobs will be created in South Australia or what research and development from the South Australian defence industries will go into that. Once again, we see another key South Australian industry left in limbo, with skilled workers being lost and businesses struggling to stay afloat, because the Morrison government treats South Australia as irrelevant and the South Australian Marshall Liberal government is too weak to stand up for South Australia.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Is there a seconder for the motion?

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

I was quite excited when I saw this motion on the Notice Paper, talking about naval shipbuilding and the member for Makin moving it. I thought: 'This is great. We're going to see some well earned praise for the coalition government and what it has done for naval shipbuilding, what it has done for defence investment and what it has done for the fine state of South Australia.' But all we get is carping and whining and whingeing—typical negativity. I like the member for Makin. He's a great fellow, but that five minutes that he just delivered is five minutes of my life I'm not going to get back. I'm annoyed about that because I thought he was going to talk up our sovereign capability. I thought he was going to talk up the fact that we are investing record amounts. I thought he might even have been just a tad honest about the fact that, during the Gillard and Rudd years, defence spending dropped—and the defence minister talked about this in question time today—to 1.56 per cent of gross domestic product. That was the lowest level since 1938, and the member for Makin knows, as we all do, what happened in 1939.

We are putting in place investment of $90 billion in new naval ships and submarines. The member for Makin should be talking that up, because South Australia is going to play a key role in that shipbuilding. There's more than $1 billion in modern shipyard infrastructure—

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

Order! I just remind the member for Makin that he was heard in silence during his speech. Give the same respect to the other speakers.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

There's up to $62 million in workforce growth and skilling initiatives to enable the delivery of these platforms. It's not just the ships and the infrastructure to build those ships; it's the upskilling of the people. It's making sure we've got the right trades and the right apprentices, and, when it comes to getting young people into the workforce to do all those sorts of jobs, there's no better side of the House to do it than the Liberals and the Nationals. We have a proven track record. The member for Makin talked about the longevity of this government and how many years, over the past quarter of a century, we have been in government. There's a reason for that. It's because the people of Australia know and trust that, when it comes to national security and when it comes to defence investment, we will be the right ones on the treasury bench to deliver, and deliver we are doing.

I note the member's reference to the contract with Naval Group and the AUKUS announcement. I'm not going to enter into a debate about contractual arrangements. They form part of the national security, which is quite rightly kept within the confines of the Prime Minister, defence chiefs and others who decide national security. But, whilst I recognise the talents and skills of those who work in the electorate of Makin—I do—I welcome any opportunity for workers in any electorate of Australia to partake in this process. I know, having gone around as the then Assistant Minister for Defence—and, indeed, as the Minister for Veterans' Affairs—to the various military bases and to where they manufacture armoured personnel carriers and other equipment, that it is a question of not just where the product is completed but all the other manufacturing plants and factories in towns right across the nation. That includes Tasmania—and I acknowledge the service of the member for Braddon, who is no longer in the Chamber. It is the entire country that feeds into the process of getting the right military equipment, and that is what we're doing. When it comes to shipbuilding, 70 defence vessels and 1,700 vehicles are being built in Australia right now.

We're getting on with the job. We're getting the job done. That's because the people trust us when it comes to defence and when it comes to national security. When it comes to shipbuilding, certainly, they know that the Liberals and Nationals will deliver, and they remember that when Labor was last in office there was not a ship built. Labor did not build a single ship. We are getting on with the job. We're fixing up the errors of the past—the Labor past—and we're making sure that, for us, national security comes first.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on this important motion, and I thank the member for Makin for raising this very important debate. For South Australians, defence industry jobs were meant to provide a vital lifeline following the loss of manufacturing in our state, especially the loss of General Motors Holden. Thousands of people worked not just at GMH but at manufacturing plants around the place that supported GMH. But this government's continued mismanagement of defence contracts has thrown the manufacturing industry into chaos and insecurity.

The Australian naval shipbuilding industry is facing a double threat. Firstly, we have the submarines. Most experts feel that the decision to switch to the nuclear option makes sense from a defence point of view, especially given that the French submarines contract was plagued by cost blowouts, changes in the commitment of local content, and delays. We on this side of the House have been supportive of the arrangements with the AUKUS deal, the Australia-UK-US deal, but that doesn't mean we can ignore this government's constant bungling of defence contracts; nor should it detract from the fact that it was a diplomatic debacle with the potential to impact Australia's honour, security and sovereignty. As a consequence of this mismanagement, around 350 Naval Group Australia jobs, the majority of which are in South Australia, will be lost. That's not to mention further potential job losses and uncertainty about the future in some of the supply chain companies.

To date, the Prime Minister has not provided any details or guarantees as to whether the submarines will be built in Adelaide. This creates continued uncertainty for the workers and associated industries. We must ensure that Australian industry is involved in the development of these submarines from the start in order to ensure that Australia has the capability to maintain the vessels into the future.

Last week, this was reiterated to me during a meeting I had with representatives from Engineers Australia. Their studies have shown that, to meet the demand for workers over the next 12 months, the defence industry will be required to grow at unprecedented levels. This can be challenging at the best of times, as we all know, given the unique nature of defence jobs, such as security clearances and a whole range of other things. While Australia possesses some skills in nuclear, we lack the skills required to work on the maintenance of nuclear propelled submarines. In fact, a 2016 Australian Department of Defence paper looking into Australia's requirement for submarines noted the government had ruled out nuclear since the time required to amass such support systems and skilled people would extend beyond the time frame for replacement of the Collins class fleet.

I understand it takes five to seven years of postgraduate experience before an engineer is considered competent for independent practice. This means we'd need to begin training our local skilled workforce immediately if they're required by 2032 and if we want to employ people here in this country. Given these challenges we must ask the question: even if the submarines are built locally, how many of the jobs will be local? It is not only the submarine project that is creating uncertainty for workers and industry. There are now reports that raise concerns that the future frigates program is facing multiple technical capability and safety issues. The future frigates, the second-largest procurement project in Australia's history, is based in Adelaide, and it's another example of mismanagement by this Morrison government. It's already running $15 billion over budget, it has faced delays over several years, and now we know there are serious concerns that the vessels may be slower, vulnerable to detection and with limited range.

The Morrison government must take control of our critical defence contracts, get them back on track and see these projects delivered to create local jobs and save current jobs. We on this side of the House have provided a bipartisan commitment to spend $270 billion on defence over the next 10 years. We have committed to the nuclear powered submarines, but we now want to see a clear commitment by this Morrison government and the state's Marshall government to growing our sovereign defence industry with a focus on creating local jobs.

Pat Conaghan (Cowper, National Party) Share this | Link to this | Hansard source

If the global pandemic has reminded us of anything at all it's the importance of national security and our sovereign capability and their impact on Australian jobs and the Australian economy. Minimising our reliance on and the impact from external supply chains and other state forces has never been more important. Thankfully, this government is committed to effectively facilitating all of the above, and Australia's shipbuilding industry forms an important part of this commitment. In fact, a recapitalisation commitment this significant has not been seen since World War II.

The sad fact is that Australia's national security and strategic environment has seen a negative downturn in recent years, with military modernisation evolving at speeds not experienced before. The capabilities of potential threatening sources have been rapidly advancing and expanding, meaning our homegrown technology edge is not what it used to be. We are now in a position that we must act swiftly to meet the evolving threat, with the Indo-Pacific region now at the centre of strategic competition. It is uncomfortable to realise that our naval shipbuilding enterprise faces a real threat from foreign espionage.

I've said this when discussing matters relating to national security, but the sad fact is that what you can't see can hurt you. There are those with different interests to our own that seek to compromise or collect Australian intelligence. Unfortunately, this includes our next generation of naval capability. Thankfully, under the current proposed reforms to the security of critical infrastructure act, the federal government is introducing a naval shipbuilding identity assurance program. Harnessing the capabilities of AusCheck, it will provide a constant and consistent level of background checking and identity assurance for every person requiring unescorted access to our naval shipyards and multi-user sustainment sites. It will be modelled on the aviation security identity card, also managed by AusCheck, which is used to conduct background checks on people requiring access to restricted areas in airports, and to date this has proven to be very effective. It is a relief to see the program will be rolled out very quickly in the coming year.

On a very positive note, in my own electorate of Cowper, companies like Birdon Group and Bale Defence are set to benefit directly from the renewed focus of national naval shipbuilding enterprise. Both Port Macquarie based companies have previously secured large-scale overseas contracts, and in recent months it was great to see Bale Defence awarded the ADF contract to supply 40 rough terrain vehicles, with potential for larger future orders. It will be exciting to see mid-North Coast local ingenuity being utilised for our own naval capability, as it absolutely should be. Seeing our world-class local heavy engineering and industrial manufacturing capabilities used to their full potential is a gratifying prospect. This commitment to naval shipbuilding will support at least 15,000 jobs nationwide by the end of the decade, and I look forward to seeing Birdon Group and Bale Defence expand their teams and capabilities.

But in the process we must recognise that mid-sized and small Australian companies are more cost-competitive than the large overseas primes and their subsidiaries and suppliers. Australian companies must be given the opportunity to compete and participate on a level playing field as prime contractors. Examples like Birdon Group and Bale Defence in my electorate have already proven their capability and cross-competitiveness in not only US military contracts worth billions of dollars, just for the two, over the past decade, receiving high praise for quality performance. Before now, I appreciate, there has been a reluctance for local companies to invest in equipment and manpower without the security of Australian contracts to shore up the spend. This government's longer-term commitment now and into the future will allow local industry to invest with confidence.

Milton Dick (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time allocated for this debate has expired. The debate is adjourned, and the resumption of the debate will be made an order of the day for the next sitting.