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Defence Shipbuilding

Wednesday, 03 June 2015

Hansard Extract: The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Defence Industries, Minister for Veterans' Affairs) (14:05): I seek leave to make a ministerial statement.

Leave granted.

The Hon. M.L.J. HAMILTON-SMITH: The most important single jobs and industry question facing South Australia over the next 30 years is whether we build 12 submarines and eight frigates in our own country or sell off naval shipbuilding jobs to overseas manufacturers. Between 18 and 22 May this year, I travelled with Defence SA officials to France, Germany and the UK to meet with a number of defence companies to discuss both submarine and surface shipbuilding activities in Europe and Australia.

The Defence SA contingent, accompanied by the chief executive of the industry body, the Defence Teaming Centre, also met with BAE in London to discuss the successful air warfare destroyer program and the options ahead for the future frigates construction. During these very successful meetings our delegation met with the German shipbuilder TKMS in Kiel and the French industrial group DCNS in Paris. TKMS in Germany had eight submarines in the shipyard under construction; the group is an accomplished exporter of technology and submarine manufacture to a range of countries. DCNS is a proven manufacturer of nuclear submarines with a record of success in exporting designs, technology and the manufacture of submarines to overseas markets.

Both shipbuilders expressed their willingness to embrace the Australian defence industry and to build in Australia. Both companies have proposed plans for an in-country build OF Australia's future submarines as international design partners. During our meetings we conveyed the South Australian government's clear commitment and support to the Australian defence industry and we offered our assistance in securing an Australian-built submarine solution by either company.

As I travelled on to China to join the Premier on the successful China trade mission, our agency, Defence SA, went to Denmark to meet with the ship designer Odense Maritime Technology (OMT) and their partner company Valcon. These companies have designed highly innovative shipbuilding solutions. Defence SA also went on to Sweden to meet the Collins class submarine designer Saab and to Italy to meet with successful Italian shipbuilding company and frigate designer Fincantieri. The delegation also visited Japan to join the international maritime conference MAST Asia 2015.

South Australia has also recently received visits from DCNS from France, and from representatives of the Japanese industry, organised by the commonwealth. They toured the shipyard and had meetings here with the state government and ministers. At all of our meetings the South Australian government and its representatives were hosted by the most senior members of these organisations, who provided open and informative commentary on their businesses, expressed their interest in doing business in South Australia and welcomed the support the state government offered.

While this visit was underway, back in Australia the federal government stated that the competitive evaluation process for the submarine procurement could mean that we might not build the first few in Australia—we might not build any at all here. Then we had phantom forensic audits, yet to be seen by anyone other than the leaker, that made extraordinary unsubstantiated claims about the cost of the air warfare destroyer program, designed to cast a shadow over the launch of Australia's newest air warfare destroyer, the HMAS Hobart.

If such an audit exists, the state government believes it should be released so that its claims can be tested. Compared to the international shipyards of Europe, there is a vastly different level of confidence in Australia's shipbuilding capacity than there is in the shadowy corridors of Canberra. The federal government does not appreciate that the investment of large global defence companies plays a vital role in our current shipbuilding strategy, the jobs they provide to Australian workers or the flow-on business it provides to our SME community.

Ms Chapman: Kevin Rudd has got a lot to answer for.

The SPEAKER: The deputy leader is called to order.
The Hon. M.L.J. HAMILTON-SMITH: I can assure the house, however, that while our federal government appears to have little confidence in the Australian defence industry—

Ms Redmond interjecting:

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

The Hon. M.L.J. HAMILTON-SMITH: —to build our future surface ships and submarines, the century-old icons of European shipbuilding has admired us from afar. They expressed their great desire to expand their interests here, but could not commit until the federal government gave industry a clear commitment to the future of naval shipbuilding, something with which members opposite could be most helpful. It is apparent from this industry visit that a successful shipbuilding future for Australia is indeed possible. It will require a continuous build of submarines and frigates in Australian shipyards by Australian workers and Australian businesses based predominately in Adelaide.

Here is the lay of the land in international submarine construction: firstly, the French manufacturer DCNS can build a conventional version of its Barracuda-class submarine in Australia on budget and on time. And our visitors confirmed that the German manufacturer TKMS can build an evolved type 216 submarine in Australia on budget and on time. BAE, OMT and Italy's Fincantieri as a result of our visit have proven that all possible design partners for Australia's future frigates can build in Australia on budget and on time. In all of these scenarios what matters most is that Australia's sovereign submarine build is done for Australia, in Australia, by Australian workers, just as the federal government promised it would be.