Monday, 17 September 2018
Future Submarine Project; Order for the Production of Documents
It's worth reflecting that we're in this position and are having this discussion today because Labor failed to do anything about submarine procurement when they were in government. We know that was five or so years ago, but perhaps it was the most irresponsible decision because it has left perhaps the most irresponsible minister in the history of this place in charge of procuring some very important strategic weapons. We know Minister Pyne has not only a cavalier disregard for ministerial responsibilities but absolutely zero concern for the public purse. As long as it can deliver a political outcome for him, he doesn't care what the cost is. The political outcome of course was to save the seat of Sturt in the last election, so a promise was made for the procurement of tens of billions of dollars worth of submarines. There are enormous questions still to be answered.
As a relative neophyte to the submarine discussion, I have taken it upon myself to get substantial briefings from people who do know about submarines about what is important for Australia and what is value for money. I find it extraordinary that I could tell you pretty much what it would cost to buy a German submarine off the shelf and to have it built entirely in South Australia. That is relatively public information. Similarly, I could tell you what it would cost to buy a submarine and have it built in Australia by the Japanese designers.
Senator Patrick is asking a very legitimate question: what is the documentation and what is the early assessment cost of the decision the government has taken in this respect? It is the early cost. It's not secret. It doesn't talk about capacity. It's not going to tell us anything. It's just a headline figure. I can go to the Germans and buy an appropriate class of submarine—one of the suite of submarines that they manufacture—and have it built in South Australia. It's going to cost me $1 billion or $2 billion. Why is it that we're not entitled to have that information on behalf of the successful tenderer? I'll tell you why. Because how this determination took place stinks to high heaven. The contractual arrangements that have seen the decision made to use the French tenderers for construction of our submarine project stink to high heaven.
I have huge concerns about the design of these submarines—not simply because they are retrofitting a nuclear submarine with diesel; they're trying to make a submarine be all things in all circumstances. Anyone with a working knowledge of submarines knows that there are different subs for different purposes. Senator Hanson quite rightly talked about the potential for nuclear submarines. Nuclear submarines are wonderful things if you're operating in deep water and in a covert capacity for a very long time. They're not appropriate for a lot of the other work that Australia does in surveillance and counterintelligence and the other mission-ready stuff that takes place in relatively shallow waters. We know that nuclear submarines can go along at very high speeds for a very long period of time, but they also put out a signature that is sometimes more easily detected than a diesel-electric submarine running on batteries. We also know that diesel-electric submarines running on batteries can run at very high speeds for very short periods of time. But, once again, they have their limitations. There are horses for courses. Yet, we seem to have decided that we are going to build a new Seasprite that will be an amalgam of all of these different things and then end up with a perfect scenario.
I have grave concerns about it. I have grave concerns about how that was conceived. I have grave concerns about the break costs attached to this. We don't know what we're up against. I suspect that there is no dollar figure about the break cost in the event that we don't proceed down this path. It is, as in many contractual arrangements, led by people who have very little commercial understanding or very little commercial experience and are motivated more by electoral outcomes than good defence outcomes for the country. I suspect that this is a bottomless pit of compensation if we don't proceed down this path.
As a South Australian, I make no bones about the fact that I'm happy to see submarines and defence work take place in our state. It is very important for the future of our state. But, equally, as an Australian senator, as a taxpayer and as someone who is deeply concerned about the future of this country for every other Australian, I also want to see value for money. I am unconvinced that the submarine contract and procurement process is delivering Australians value for money. The headline figure was $50 billion for these submarines. And then there's another $50 billion, potentially, for ongoing maintenance and running costs. Senator Patrick has suggested, via the estimates process, that that figure could be virtually double that. If you really wanted to go down the path and procure a range of off-the-shelf German submarines and a few nuclear submarines, you could probably do the same for about $50 billion. I reckon that in the end I could probably tick a few boxes in that regard and say, 'Yes, this would help us here, here, here and here, and we'll have a better submarine fleet that is more reliable and more appropriate to the range of circumstances in which Australia engages in tactical undersea warfare and surveillance than is the case now.'
But, in the absence of information, the Australian people can't really make that judgement. In the absence of information, the Senate cannot really identify whether taxpayers have been given value for money, whether there has been some sort of misrepresentation, whether there has been some sort of malfeasance in the procurement process, or whether this was hastily cobbled together as a political fixer. It will have enormous implications, both financial and defence related, for decades to come.
So, with the limited knowledge that I have, both from a personal sense and point of view, but more importantly, with the information that has been provided to me by strategic briefings that I spent virtually a day undertaking with people who are experts in this matter—with due deference to someone who is not my natural political ally in Senator Patrick, but someone who does have a diligent approach to this matter and a great deal more technical expertise and specialist knowledge in this space than I ever will ever have, no matter how many briefings I get—I find myself absolutely in support of this motion for the production of documents. I don't buy, quite frankly, the statement that the minister has put forward today. But I do regret, and I put on the record, that this is the Minister for Foreign Affairs who is representing in a capacity. A brief would have been provided to her, and she has done her duty in this place. I have some questions about whether the minister should be held to account in the manner that some are proposing.