Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

( I move:

That the Senate take note of the Senate Economics References Committee reports Part II: Future of Australia's naval shipbuilding industry: Future submarines and Part III: Future of Australia's naval shipbuilding industry: Long-term planning.

In April last year the Prime Minister made a well-publicised visit to ASC shipyards in Osborne, in South Australia. He announced that the design partner for the Navy's Future Submarine project would be the French company DCNS, and he made this promise: 'The submarine project will see Australian workers building Australian submarines with Australian steel'. That was a direct quote from the Prime Minister at that time. It was quite clear the Prime Minister was gearing up for an election campaign, a campaign in which he desperately needed to shore up his party's support in South Australia.

Now, not quite 12 months later, this government is clearly intent on winding back the commitment he gave then. The government's response to the recommendations in the two reports before us tonight do not use the forthright language Mr Turnbull used at the time of the original commitment that the 'submarine project will see Australian workers building Australian submarines with Australian steel'. Instead what we see is a collection of weasel words, of spin doctors' platitudes. The Prime Minister promised that with:

… every lever of policy that we can engage, it secures our successful transition to the economy of the 21st century and the jobs which our children and grandchildren are entitled to expect.

But the government's responses that we are discussing here tonight highlight an entirely different policy lever. What they do is fail to explain that the government does in fact intend to have Australian industry engage fully in the Future Submarine project. What they say is: 'Defence will seek to maximise Australian industry involvement'. Just what the word 'maximise' means in this context is of course left unexplained. It leaves just enough wriggle room for the government to be able to weasel out of any commitments.

The government has been embarrassed by the evidence tendered to a recent parliamentary inquiry, because it conflicts directly with Mr Turnbull's promise. Last week, at a hearing of the Joint Standing Committee on Treaties, the Head of the Future Submarine project, Rear Admiral Sammut told the inquiry:

… it is important that we use steel of a specification that France currently uses to design its submarines, …

The Rear Admiral said:

… it is very specialised steel. It is not really used for anything else. It is used for submarine hull construction.

He said:

… at the moment we are currently looking at the capacity of the Australian steel producers to produce steel to the very demanding specification that is required for submarine construction, …

It was not a discussion about whether the Australian industry had been approached with the relevant specs and been asked whether or not they would be able to supply the relevant steel. In fact, on Friday, the CEO of DCNS Australia is resigning. Adelaide-based Sean Costello is resigning, and rumour has it that the dispute between DCNS Australia and DCNS France has reached the point now—over the very issue of the extent of the Australian industry's engagement in the Future Submarine project—that the CEO has said he has had enough.

This is a very bad sign. We need to ensure that Australian steel is used in the building of Australian submarines, and we cannot be certain of that, given what the Rear Admiral has said—despite the commitments the Prime Minister has made, despite the commitments that Minister Pyne has made on these matters.

Similarly, we can look to the Chief Operating Officer of DCNS Australia who said that there were surprisingly few potential Australian suppliers. Only 25 out of the 398 identified as possible had passed an initial audit for supply chain involvement in the Future Submarine project. This is not because all of those others were inadequate. He explained: 'One of the things we will be talking about at our next industry brief is the fact that we are a little disappointed in the uptake of this with Australian companies.'

The committee evidence and the evasive language of the government's response in these reports is building a very different picture to the rosy one that Mr Turnbull and Mr Pyne painted a year ago. We have gone from promises about submarines being built 'by Australians with Australian steel', to hints that local steel may not be chosen at all. We have gone from promises about 'jobs for our children and grandchildren, jobs they are entitled to expect', to puzzlement about the low engagement with the project by Australian suppliers.

The complaint in the industry is that Minister Pyne is not interested in this being a national project; he wants to see this as an Adelaide project. We should be working with Australian industry to ensure that we can meet the project requirements at a national level. It is an important part of the department's job to work with industry to ensure that the will of the government of the day is carried out. This does not happen spontaneously. Local involvement does not magically appear through a thought bubble or a ministerial press release or an election commitment. What is required here is political will and a determination by government to deliver on its commitments. It just so happens that this government does things in a report that demonstrates their failure to understand the importance of industry policy and their failure to understand the importance of building Australia's industry capabilities. The committee report recommends 'encouraging Australia's Defence industry to marshal its resources into support of shipbuilding and the submarines project'. That is the view of the Senate.

Further, they recommend 'listening to the technical community's concerns and consulting retired naval engineers and submariners to identify the contributions that Australian firms can make and integrate these into the project as far as possible'. These things are simply not happening. All the government can say in its response to these repeated weasel words is that 'Defence will seek to ensure that local content and support are maximised'. By this government's standards, 'maximised' means that we will provide whatever support we can to the French to build these vessels in France.

The government has put a lot of rhetorical effort into assuring Australians that it wants a defence industry in this country. In fact, it has established a separate cabinet position. But every indication other than the rhetorical is that that proposition is not being fulfilled. The so-called Minister for Defence Industry is being revealed as nothing more than the minister for the South Australian Liberal Party seats. Whatever he is doing, he is not pulling the policy levers referred to by the Prime Minister in his visit to Osborne. Unless this government is willing to work actively to ensure an integrated Australian industry in the Future Submarine project, the Prime Minister's fine promises will come to nothing.

I seek leave to continue my remarks.

Leave granted.