Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on Australia's vital submarine capability, the procurement process for the replacement fleet and the opportunities for Australian industry if they are able to rise to the challenge. Let me begin by speaking on important work in the defence industry more generally. Such a discussion cannot occur without acknowledging Labor's terrible record in the space. Labor's neglect in government extended to national defence, including the strategically important submarine capability. On Labor's watch, $16 billion was cut from defence. Defence spending was cut to 1.56 per cent of GDP—its lowest level since 1938. Labor made the largest single cut to the defence budget since the end of the Korean War—they cut it by 10.5 per cent. On Labor's watch the Australian defence industry shed more than 10 per cent of its workforce because of budget cuts and deferrals. As a result of Labor's disregard for defence funding, 119 projects were delayed, 43 projects were reduced in size and eight were cancelled altogether. That is what we, the coalition government, inherited. We were promised an updated defence capability plan, but it never eventuated. Such was the mess in this portfolio that Labor never even bothered to produce a defence policy leading up to the election. They simply gave up.

I remind senators that defence is every government's first responsibility. Mr Shorten and Senator Conroy consistently avoid answering questions on why Labor failed to act to ensure there was no capability gap in replacing the Navy's replenishment ships. Mr Shorten claims that if the Labor Party was in government now these ships would be built in Australia. The Labor Party had six years to make that decision and did nothing. The reality is that Labor needed to make decisions two years ago to avoid job losses in the shipbuilding industry. The Senate inquiry into shipbuilding was told that Defence was ready to begin the replacements for these ships four years ago, but it appears the Labor government was not. Labor's plans were bankrupt even before they began. They were good at making promises but totally incapable of delivering on their promises. Labor's legacy of mismanagement means Defence now faces a deficit of $12 billion on current plans over the next decade. As a result, Labor left Defence $30 billion short of being able to achieve the objectives outlined in the former government's fanciful 2009 white paper, rendering it a work of fiction.

For contrast, I will give the coalition's defence story since taking government 18 months ago. In 2014 there was almost $1 billion worth of defence procurement and sustainment work being undertaken in South Australia. That includes 44 separate acquisition projects such as the work on the Air Warfare Destroyer program, the support and upgrade of the RAAF's P3 Orion aircraft fleet and the upgrades to the ANZAC class frigates and the Army's communications systems. South Australia is also home to 58 separate sustainment programs, including the sustainment of the Collins class submarine and the Jindalee over-the-horizon radar network.

The government has a plan for the future of shipbuilding in Australia. We are implementing a reform strategy for the Air Warfare Destroyer project, which was running more than two years late and $600 million over budget under Labor. In early June, the government committed $78.2 million to accelerate design work on future frigates, to keep alive the option of building future frigates in Australia.

Over the next four years, subject to the outcome of the defence white paper, there will be up to $4.2 billion in defence spending for building and sustaining defence materiel in South Australia. I will say that again: $4.2 billion in defence spending for building and sustaining defence materiel in South Australia. Senator Johnston must be commended for such a substantial contribution to the defence portfolio.

Since October 2014, just several months ago, I have been expressing the view that the Future Submarine procurement process should allow for the involvement of qualified Australian companies who can compete for the opportunity on merit. I took this view after hearing expert witness testimony at the Senate Economics References Committee naval shipbuilding inquiry, which persuaded me of two things: that there is merit in a non-targeted approach to selecting a build partner for the Future Submarine project and that the Adelaide based Australian Submarine Corporation is likely to be competitive in a merit based selection process. In any decisions surrounding the acquisition of the future submarine fleet, defence interests must come first. Responsible expenditure of such a large amount of money is also very important.

The Prime Minister recently made the assurance that qualified Australian companies can compete on merit to participate in the development of Australia's Future Submarine project. This is wonderful news for South Australian shipbuilders, indeed for the Australian shipbuilding industry and its members. Minister for Defence Kevin Andrews, accompanied by South Australian coalition MPs and senators, visited ASC in Adelaide yesterday to confirm this message: the acquisition of replacement submarines will be based on a competitive evaluation process, managed by the Department of Defence. This process will take into account Australia's unique capability requirements, as well as considerations such as cost, schedule, technical risk and value for money. Most important to me is the fact that any Australian company that can credibly meet criteria like capability, cost, schedule, technical risk and value for money can compete on merit, as can potential international partners.

To avoid the confusion and doubt that has infected some in this place—I do not mind what you call the process because such specific terminology was never important to the assurance I sought. The assurance I sought was very simple: I asked for Australian companies like the ASC to have the right to compete for the Future Submarines project on merit. That is the very assurance I got; and that is the very assurance that stands today. Navy's needs will always come first. The government's responsibility for responsible expenditure of taxpayers' money will always be taken seriously by this coalition government. And I am delighted to say Australian shipbuilders have the opportunity to put their hat in the ring. From this point on—from this day forward—the ball is in their court.