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Current Issues

Defence Shipbuilding

Wednesday, 15 October 2014

Hansard Extract
Sustaining the future of Australia's naval shipbuilding industry is absolutely vital to our economy, to our advanced manufacturing future and to jobs. We are currently at a critical crossroads, where the federal government will either choose to spend $250 billion to deliver and sustain our future Navy fleet here in Australia or to send that money to overseas companies employing foreign workers and adding to overseas economies.

Today, I appeared before the Senate Economics Committee to discuss this important issue and to answer questions on behalf of the government. As current shipbuilding projects are due to ramp down in the next 18 months, securing a continuous workflow of future projects is vital to our economic and security efforts. The federal government's words and actions on this issue to this point are not making industry, the South Australian government or the South Australian people very confident about their commitment to building Australia's next submarines in Adelaide. This puts the industry's future at risk. It is imperative that the government divert from its current route.

Mr Tarzia: Work with them, please!

The SPEAKER: The member for Hartley is called to order.

The Hon. M.L.J. HAMILTON-SMITH: Dr John White, a nationally recognised expert in the naval shipbuilding field, last week recommended to the Senate Economics Committee that the design, build and sustainment of our future submarines should be managed by one authority which will run a fair and competitive tender process within Australia. The South Australian government agrees with Dr White's position.

His recommendations were further endorsed by economics expert Dr Göran Roos, who agreed that, if we purchased a submarine from Japan, we would simply be using Australian taxpayers' money to build a new Japanese shipbuilding facility and to recruit and train new Japanese workers to do the building work. The same would apply wherever the submarine was built if it were overseas. We would then pay that overseas country to optimise their own design to be able to fulfil our requirements.

A recent study by the National Institute of Industry Research, commissioned by the Economic Development Board of South Australia, indicated that Australia as a country is at least $21 billion better off by building in Australia than to purchase overseas, in addition to creating 120,000 man years of additional jobs—not days, not weeks, but years of additional jobs—in the economy over the life of the project as compared to building overseas.

To ensure the best outcome is achieved, a sensible approach must be taken. The state government is engaged with the Prime Minister and the Minister for Defence on this key issue to help advocate for South Australian industry. We will also provide a submission to the commonwealth on the development of a defence white paper and we will work as cooperatively with the commonwealth as we can to secure the right outcome.

In order to make our submission a reflection of what key defence and industry leaders think and feel, on Tuesday 21 October the South Australian government will hold a summit at parliament, in this chamber, to hear from them. It will be an opportunity for all of the facts on this matter to be heard and considered. As well as the Future Submarine Project, the summit will explore how South Australia can best position itself for other key projects, such as Land 400 and future frigates. It would be an error not to listen to the leading experts in this area and consider all available options on such important issues. We hope that the commonwealth government will adopt a similar view.