Dennis Jensen (Tangney, Liberal Party) Share this | Hansard source

We do have a proud history in shipbuilding, having built many great warships in the past. But we also had a proud history in the manufacture of horse-drawn carts, thermionic valves and a host of other industries that no longer exist. Indeed, Whyalla ceased shipbuilding in the 1970s. We need to allow our industries the opportunity to innovate. Rent-seeking simply sucks up money and inevitably the rent-seeking industries die, despite the use of public monies to try to prop them up.

Our nation's defence, and spending on defence capability, must not be a vehicle to provide for sheltered workshops in any industry. It is important to note that the current crisis in shipbuilding is a result of Labor's gutting of our defence budget by $18 billion over the next decade and pushing time lines and schedules to the right. Indeed, Labor left defence in such a mess that we need to get a new white paper and defence capability plan drafted. It is essential that the industry meet appropriate productivity benchmarks, to ensure that the industry does not get fat at the taxpayers' expense, as has been the case so often in the past.

As I have said, industry needs to innovate, not simply rely on Australian defence contracts to see it through. There is a clear example of this innovation in my home state of Western Australia. Austal have won contracts for littoral combat ships against the best shipbuilders in the world, not because of the largesse of the Australian taxpayer propping them up but because their products are highly innovative and they have developed a reputation for reliability and innovation. Austal also have contracts with the United States Navy for 10 Joint High Speed Vessels.

There was discussion about the issue of submarines, which is very problematic. For our next submarine, there is no conventional submarine in the world at the moment that can meet our requirements, meaning that we will have an orphan submarine capability. People might think we can just use a European sub, but you need to increase the air-conditioning load significantly, simply because of the temperature of the waters that we operate in versus, for instance, the North Atlantic. This alone means that you need a substantial redesign of the boat.

In my view, we should consider purchasing Virginia class submarines from the United States Navy, which would allow us to look at some of the niche capabilities that we have in Australia. For instance, some of our sonar capabilities are absolutely groundbreaking. These could go into not only our boats but the US boats as well, which would then give us a clear spiral upgrade path. We might not be making the boats in Australia, but we would have the ability to do shallow-level maintenance of not only our submarines but also the United States Navy submarines that operate in our area.

Let us take a leaf out of Austal's book. Looking at the technologies available, Sonartech Atlas have two sonar systems, called PIPRS and SAAPS, that are world-leading technologies that have been picked up by the Americans and the Europeans. We will never be cutting edge with conventional shipbuilding. We will always be paying over the odds in Australia for conventional capabilities as we do not have the critical mass, the volume of work, required to continue shipbuilding ad infinitum. According to the ANAO, the effective rate of assistance is over 30 per cent for indigenous shipbuilding. Treasury believe the premium to be over $1 billion. That is from the ANAO's Audit report No. 22 2013-14: Air Warfare Destroyer Program.

Once, we designed and built our own fighters and bombers. Then we just made fighters. Now we simply buy them already constructed. The reason for this is that they become more complex and the numbers purchased reduced, leading to issues of critical mass. The same thing has recently occurred with our car industry. Let us be innovative rather than simply harking back to the past.

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