Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

[by video link] I rise today to speak about naval shipbuilding. When I was listening to the debate on Monday about the Defence Amendment (Parliamentary Approval of Overseas Service) Bill, brought forward by Senator Steel-John, I listened carefully to coalition senators. They rose on their high Senate horses stating that it is the first responsibility of government to make sure that the people of this country live within a safety net of security. They're important words and I believe in those words, but I feel they were hollow coming from senators who were really just momentarily wrapping themselves in the Australian flag. I say that because I haven't seen these senators rolling into the chamber and using adjournment speeches or senators' statements or two-minute statements to express their concern about the Naval Shipbuilding Plan, and in particular the submarines program and the Future Frigate program. Both are late, both are over budget, both have performance concerns relating to them and both have issues around Australian industry contact. This is particularly concerning, noting that we have changing geostrategic circumstances to our north—worrying changes in our geostrategic circumstances, enough so that our formal posture in relation to defence has basically signalled we can no longer rely on a 10-year warning. That warning time has in fact shortened dramatically.

I go to the submarines. In terms of the schedule, the project was stood up in 2009, and in fact I had some involvement prior to that personally in CASG, in Defence. The project was actually being considered well before 2009. It became public in 2009, with a view to purchasing 12 new submarines that would be brought into service by 2025. That date is important because that is the date on which the Collins class submarines are due to retire. We now find ourselves with a program that has a delivery date of 2035. We have some serious strategic concerns to the north, be it in relation to the South China Sea, with the CCP preferring to emphasise the word 'China' when they say 'South China Sea', or, of course, incursions on Taiwan, which is something that we need to have some regard to. So 2035 is simply too late, but that's where we find ourselves.

We've seen the cost go from somewhere around $12 billion in 2009—that was the number being talked about—to ASPI reports talking about $36 billion to $50 billion, and it then moved to $90 billion in out-turn costs. So we've seen a massive increase in the cost of these projects. The numbers are so big, not for the program itself but for the blowout—$40 billion in blowout for the future submarines, and of course that's been exacerbated, because we now have to extend the life of the Collins class submarines beyond their 2025 retirement date to meet the new submarines in 2035. There's no guarantee that they will arrive in 2035.

The performance of the future submarines has also been brought into question. We know from Senate estimates that the batteries that we will use on our future submarines will be lead-acid batteries. Madam Acting Deputy President, I can tell you that in 2025 the only place you will find a lead-acid battery, other than in our future submarines, will be in a museum. That's the only place. We see lithium ion batteries being used in Japanese submarines and planned for pretty much every brand-new submarine that is being placed on the market.

There is also the question of the pump jet propulsion on the future submarine, which creates a huge risk. We ought to be concerned about that risk, because it is by no easy means that we will change the propulsion arrangement should that not work out. That will be a catastrophic project problem if the high risks associated with that pump jet are realised.

Of course, industry involvement has been of particular concern as well. We were promised a project that would make sure that we had a sovereign industry capability. Industry are doing some work on this project, but by and large their expectations are not being met. We need to be able to make sure that, when these submarines are operating beyond 2035, we have the capacity to sustain them properly. That means we need to have industry involvement.

I turn to the schedule for the future frigates. We've recently learnt it has blown out by 18 months. We need to understand, in particular, what that means. When the project was first stood up, we were supposed to have construction starting in 2022. That was subtly shifted in relation to some of the blocks that are being built. There was some confusion around the actual start date, but let's go with 2022. We now know that that 2022 date has been shifted by 18 months as a result of delays in the future frigate program. The actual delivery of the first ship has moved from December 2029 to December 2031—another two-year shift. It makes us think there's nothing happening in the defence space, that there are no geostrategic problems, but these are significant issues. The cost of the Future Frigate program has gone from $35 billion to $455 billion—another $10 billion. No-one seems to bat an eyelid; indeed, the coalition doesn't seem to think that's a topic worthy of addressing. It simply accepts it. It just accepts there's a blowout. We're also seeing issues associated with performance in relation to that project. We know that the weight margin for that project is only three per cent. That means that, over the life of the ship, there's not much scope for upgrades. It also means we're pushing a heavier ship through the water, which will put a load on the propulsion chain, and, as an acoustic specialist, I can tell you it will also make the ship noisier, which is problematic, noting it is an antisubmarine warfare vessel. Again, industry involvement in the program is falling well short.

How do we get into these situations? We have admirals, generals and air marshals who have little or no project experience making recommendations about ambitious and high-risk programs to cabinet ministers who have even less experience. Defence knows to buy off-the-shelf wherever possible. It was recommended to them by Kinnaird and by Mortimer in reviews of our procurement strategy.

That leads me to the life-of-type extension of the Collins class submarines. This was a program that was known about 10 years ago. I recall Cameron Stewart of the Australian reporting on life of type all those years ago. But the life of type has gone from one submarine to five submarines, and now we know it's basically going to be done for all six submarines at $10 billion cost. I note, from answers I've received in the last day or so from estimates, that a second-pass decision on that particular program will not be made until 2022-23. That all leads to the final problem: in the meantime, we are heavily reliant on our Collins class submarines. They are maintained from a full-cycle docking perspective from our Adelaide shipbuilder ASC. They are doing a fantastic job—world benchmarks. Defence, so the government, are thinking about shifting this role to Western Australia. They know that the people won't move, and that's where all the expertise lies. In moving that, they will create a significant risk of nonavailability of the Collins class submarine, which is totally unacceptable, noting the geostrategic environment we are in and what's happening with our submarine programs. The government needs to stand up and make a decision on full-cycle dockings immediately for them to be retained in South Australia.