Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Defence, Senator Payne. On 30 January the Minister for Defence Industry said that the definition of local build was a minimum of 60 per cent Australian content. The frigate tender documents released under FOI specify a minimum of only 50 per cent. Which is correct, Minister Pyne's statement or the tender documents?

Marise Payne (NSW, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

I thank Senator Gallacher for the question. What I think the senator will find, if he looks in closer detail at the tender documents—

Eric Abetz (Tasmania, Liberal Party) Share this | Link to this | Hansard source

That's a big ask!

Marise Payne (NSW, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

That's true, Senator Abetz—I will take that interjection. What I think Senator Gallacher will find, if he looks more closely at the tender documents, is that the 50 per cent Australian industry content that was achieved on the Air Warfare Destroyer Program was provided to the future frigate participants in the tender documents to which he refers, with the guidance that the Australian industry content of the future frigate program is expected to be higher. As you know, the government has been completely clear—I have, the Prime Minister has and Minister Pyne has—that we are not in the business of mandating percentages in the major programs, because our focus is on maximising industry participation within capability, within cost and within scheduled requirements. That is the approach we have taken consistently. The reason we don't want to mandate specific percentages is that we don't want to be in the business of capping Australian industry participation without delivering the best capability for Navy and creating a highly competitive and productive Australian industry base.

What is important as well is that each of the future frigate tender participants—and I have spoken about them in this chamber before—have developed an Australian industry capability plan, as part of their required tender responses, which describes how they intend to (1) maximise opportunities for small to medium Australian suppliers in both the build and sustainment phases, and (2) transition their existing supply chains to Australian supply chains and explore opportunities to integrate Australian suppliers into their global supply chains.

So the Australian shipbuilding industry will be absolutely, fundamentally and completely involved in the build and sustainment of the future frigates. It will include direct and indirect involvement across the supply chain and support service, and will create thousands of jobs.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Gallacher, a supplementary question.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I thank the minister for her very comprehensive answer, which we will need to go through in detail. On 9 October last year the minister said about Australian industry participation in the Future Submarine project, 'Some people say they want a percentage on that, but I don't see why you'd want to put a floor on an item like that.' Given that we have seen the Minister for Defence Industry apply a percentage—now shown to be false—how does the minister reconcile her views with those of the Minister for Defence Industry?

Marise Payne (NSW, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

There is absolutely no inconsistency. What the Minister for Defence Industry has observed is that in previous discussions there have been generally accepted views around at least 60 per cent. But the government's approach—consistently across the Prime Minister, me and the Minister for Defence Industry—is to absolutely maximise Australian industry engagement. I myself have attended—

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Wong, on a point of order?

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Yes, on direct relevance. The Minister for Defence Industry said a 'minimum' of 60 per cent. How on earth is a discussion about a maximum relevant to a minimum?

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Wong, I consider the minister to be directly relevant to the question.

Marise Payne (NSW, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

I'm enjoying enormously talking about Australian industry participation in the naval shipbuilding industry. One of the reasons that it is such an enjoyable exercise for me is that there is not one single person on the other side who can speak with any authority on this matter. Do you know why, Mr President? It's because in the entire term of the Labor government—let me remind you, 2007-2013—not one single order was placed for one single ship to be built in Australia. Not one!

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Gallagher, a final supplementary question.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

Isn't it clear that, despite losing out on the plan to send submarine jobs offshore, the Turnbull government continues to undermine local content in Australia's defence industry?

Marise Payne (NSW, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

That really does bring the Labor Party's interest and engagement in this issue to a level of low farce that even I'm surprised by. Of course, their Australian industry content in naval shipbuilding was zero per cent. That would be the difference.