Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

I also listened carefully to Senator Fawcett's contribution and I am glad that I heard it because, even though I did not agree with everything that he said, it was a thoughtful contribution. There is no doubt about that. I would disagree with some of the emphasis and some of his conclusions, but he put a big effort into bringing forward what he thought were the key issues affecting these significant defence spending problems—problems that any government in any country would face.

I also listened carefully to Senator MacDonald, who said that we were in here to filibuster. If there was anyone filibustering, it was Senator MacDonald. If there was ever a demonstration of naked politics winning over thoughtful contribution, then Senator MacDonald was the epitome of that process. The last time Senator MacDonald would have seen a ship—he talks about his Scottish heritage—it would have had a big dragon on the front, when the Vikings were invading Scotland. That is about the level of his understanding of the shipbuilding industry. Based on his contribution, his understanding assumes dragons on the front of the ship, Vikings inside and oars all along the side.

Let us go back to some of the more thoughtful contributions—and I do not want to get dragged into Senator Macdonald's obvious filibuster and his naked political attack on the former government. Every government has problems dealing with projects that are eight times the size of the Snowy Mountains project. That is the size and scope of this project. The technology in these Defence projects leaves the Snowy Mountains for dead in terms of the technology and sophistication of the projects. Successive governments have accepted that building the DDGs in Australia would involve a premium over and above the cost of building them overseas. Why do governments do that? Would the United States allow their shipbuilding industry to be farmed out or contracted out to any other country? No, they would not. If fact, even if you do any small componentry work for the United States defence department, you do that on extremely strict approaches, guidelines and requirements.

I am very concerned—despite the coalition's thoughtful contribution from Senator Fawcett—that, given the leak into the Financial Reviewthis morning prior to the release of the Air Warfare Destroyer Program Audit Office analysis, there is a whale in the bay. The whale in the bay I am worried about is that people will try to use this report, along with another privately determined report that the government is arguing they are going to do, to try and send the work for future warship projects overseas. I really do not want that to happen.

Prior to my discussions, I decided that, given the arguments that have been put up here in relation to other areas of endeavour in this country—manufacturing projects around the place, the Toyota close-down, the problems that the government argues are in other areas—I thought I had better ring the AMWU and ask them about their involvement in this project in South Australia. I am a former national secretary of the AMWU. I spoke to the assistant secretary about half an hour ago, and he indicates to me that almost $100 million has been spent simply on skilling workers up to do this work. That is the scale of this project, about $100 million in training—and that is not just for blue collar workers. That is not just for the welders, the riggers or the technicians—that would be for the management and executive, what falls within the Defence capability that we have within this project.

I have not had an opportunity to have a look at the recommendations. I have not even read the summary of the Australian National Audit Office report

Suffice it to say that, in what I have had a quick look at, the issue of workers' wages and conditions does not seem to be jumping out at me in relation to this. That is consistent with what the Assistant National Secretary of the AMWU, Mr Glenn Thompson, has advised me. He says that there have been no industrial disputes of any significance in this project. Management do not argue that there have been industrial problems at the project. Management do not blame the workforce, as some management are likely to do in some places, for the fact that there is a problem in the project in South Australia.

But this goes wider than South Australia. It also goes to the Forgacs Shipyard in Tomago in Newcastle, a workplace that I know well, and also the Williamstown shipyard, again a place I know well. In my time as national secretary of the union, I have been on all these shipyards looking at what has been done and, quite frankly, marvelling at how skills have moved on since I worked in the ship repair industry at Garden Island Dockyard in New South Wales in the early seventies. These are technological marvels that we are building, and we need to make sure, for a number of reasons, that we can continue to build sophisticated warships and defence capabilities in this country.

As I said, I have not read the National Audit Office report but I know you can go back to some basic principles in terms of how projects operate. You look at the costs in the project, and I do not have any problem looking at costs, but many establishments look at the costs and that is all they do. You have to look at the quality of the product that you deliver, the quality of the training on the job and the quality of the actual delivery of the skills on the job. You have to look at how we deliver on time, and that has been a problem in this project. You have to look at the training; as I have indicated, $100 million has been spent on training on this project to build a new, sophisticated shipbuilding workforce in this country. You have to look at the logistics. How do you get things here in time? How do you do all those things? And I am sure that in the Audit Office report they have some comment on that. You cannot ignore the work organisation, how the work is organised on the job. And you cannot ignore the management systems that are put in place to manage. But a project as complex as this project, and a project as complex as most defence projects, takes highly-skilled management and takes knowledge—that knowledge being worked through out onto the job and into the workplace to deliver a quality outcome on time, on course and at the quality that is needed.

So this is a huge project. I am not sure why this was leaked, because obviously it was leaked yesterday. There would not have been too many people who had a copy of the Audit Office report. I can be pretty confident that it is not the Audit Office that leaked the report. There is no reason why they would want to leak the report, so you would have to say that it has been leaked from elsewhere. The AMWU and the shipbuilding unions do not have a copy of the report. The Department of Defence would probably have a copy and the minister would have a copy. I am not sure where it has been leaked from.

In my view, it is all about setting this argument that there are cost overruns—and I defy anyone to point to any major defence project anywhere in the world where you do not get cost overruns. I have never seen any. I have just seen all the arguments everywhere else, in the press and in some of the industry literature, that talk about the problems of bringing some of these projects in on time. You only have to look at what happened with some of our aircraft projects that are being built both here and overseas, and look at the cost blow-outs overseas on these issues.

This is not a defence to say that you simply cannot have any cost overruns on these projects whatsoever. That is why I say you have to have the cost under control; you have to have the quality; you have to have the delivery; you have to have the management systems; you have to have the work organisation on the job; and you have to have the skills, the training and the research and development. These are the things that go together to make a successful project. And even when you pull all of these things together, sometimes things outside your control mean that you cannot deliver on time and on budget.

That is the reality, and I would just counsel my colleagues on the other side of the chamber that when they make a speech about this now that people can go back to that speech in a few years time and see what has been said. And when you make a speech on this you have to understand the complexity of these projects. There is no magic wand, no silver bullet, that the coalition can pull out of the back of their pockets because they will get some policy issue that says, 'We're going to do something on shipbuilding. It will be a tough management approach on building any of the new projects that we have.'

The big issue that we are faced with is that, regardless of all the arguments you could put forward, like Senator Macdonald did, and all the duck-shoving and all the blame-shifting that you do—you can do all that—the problem that we have at the moment is that we want to keep workers in the industry. We want to keep the skills in the industry and we want decent South Australian workers to have a capacity to go and help build our defence capabilities, and we want them to have decent wages, decent conditions and some security that the skills that they have learned over this period of time can be applied in the future to help them and their families to thrive—and to help the South Australian economy thrive.

It is the same as in Newcastle. The same issues apply in Newcastle. This skills are there; we need to keep those skills. The same applies at the Williamstown Dockyard. And you can blame the Labor Party all you like, but it is now time for the coalition to govern. And the coalition needs to govern on the basis of dealing with this so-called 'valley of death'; these hundreds of millions of dollars that have been spent skilling up the workforce at Williamstown, in South Australia and in Newcastle—that all that skill is not lost to the country.

A few weeks ago I was given a copy of a report by the AMWU, and I would recommend that the coalition senators have a look at it. It is a well-designed and well-thought-through argument about what should be done. It is called Design, build and maintain our ships here. I am glad that we have maintained our ships here, because when I first came to Australia in the early seventies I worked for over 12 months at Garden Island Dockyard maintaining the DDGs that were there at that time. I worked on the Kembla, which was an old wooden-hulled ship which had been a minesweeper. I worked on the Melbourne and I worked on a range of ships there. It kept me in work, it kept me with an income and it helped the defence of this country by having skilled people working in Garden Island and maintaining our defence capability. They were highly skilled, well-paid and committed people.

What we have at the moment is, if you look at the document that the AMWU has put out—and I recommend that other senators have a look at page 15 of the document—it clearly outlines what is happening in terms of the workloads in Defence. And the workload has started to dip massively, and unless there is something put into this valley of dipping jobs then we are going to end up losing many of those skilled workers—4,000 highly-skilled workers in the industry will be lost. And whether those skills can ever be brought back into the industry is going to be a moot point.

But what we are foreseeing is that in the future through from about 2019 to 2036, with some long-term planning, these workers' jobs can be secured. In fact, what the AMWU report is saying is that if the workload and the skills capacity for a lot of this work comes into Australia, we could keep a workforce of between 5,000 and 6,000 employed for over a decade in the shipbuilding industry—maintaining our own ships, building our ships, building the skills and making sure that we understand the problems that are outlined in the Australian National Audit Office report. We need to make sure that we deal with those issues and that we build a strong, skilled workforce.

I fully support what Senator Carr was saying. I do not know what the point was of launching an attack on Senator Carr when he wants to look after, and help, Australian workers. I do not think attacking Senator Carr helps when we have such a serious situation. The AMWU has 10 recommendations in this area. They have had a look at this because their members' jobs and their members' families depend on it. They say:

1. The Australian Government should build more Air Warfare Destroyers to immediately help preserve national shipbuilding skills and capacity …

I will shorthand these because I do not want to run out of time. The recommendations continue:

2. The Australian Government should bring forward the project to replace the Armidale Class Patrol Boats to help develop Australia’s capability to design and build patrol boats.

3. The Australian Government should bring forward the project to replace HMAS Success and HMAS Sirius, and build the ships in Australia.

These recommendations are all designed to overcome that 'valley of death' and keep skilled people employed. The recommendations continue:

4. The Australian Government should require all shipbuilding contracts to specify a level of block fabrication outsourcing appropriate to the type and number of ships required.

5. The Australian Government should build Australia’s new multipurpose icebreaker in Australia.

6. The Australian Government should continue to support apprenticeship and other shipbuilding training programs, including requiring these schemes in all Australian Government shipbuilding projects.

7. The Australian Government should expand the role of the current Defence Expert Industry Panel to encompass Government’s non-Defence shipbuilding projects and include members from associated Departments.

8. The Minister for Industry should convene an annual meeting of Ministers responsible for shipbuilding programs to review and provide direction to coordinated, long-term Government shipbuilding plans.

9. The Australian Government should direct that the future frigate project be established as a rolling build program for the Navy’s future surface combatant fleet …

We need a skilled shipbuilding workforce in this country. We need it for our defence capabilities. We cannot rely totally and consistently on off-the-shelf ships brought in from overseas. If we bring them in from overseas we will save some money in the short term and we will trash $100 million worth of training for workers in South Australia and around the country in the long term. That would be an absolute disaster.

We need to understand that there is a 'valley of death'. We need to understand that something has to be done. There is no use making recriminations against the previous government, because we have the problem now. The coalition are in government; the coalition can do something about this. With some cross-party support for the shipbuilding industry we can go in and argue that these jobs should stay. I would welcome an opportunity to go with any of the coalition senators to talk to the minister and argue for the protection of jobs. It should be a cross-party position; it should be non-partisan. We should support our shipbuilding industry.