Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Hansard source

The Abbott government's refusal to recommit to construction in South Australia of the replacement submarines is a betrayal of all South Australians. Prior to the 2013 federal election, the now-defence minister, Mr David Johnston, said:

We will deliver those submarines from right here at the ASC in South Australia. The coalition today is committed to building 12 new submarines here in Adelaide.

The submarine contract was a crucial election commitment for South Australian voters in 2013, but as is now clear, South Australians were deceived. Just as deceitful is the Abbott government's campaign of blaming the ASC and its workforce for problems with the Collins class submarines and the AWD project—just as it blamed car workers for the demise of car making. All of the relevant facts relating to the Collins class submarines were known when Minister Johnston made the commitment in May 2013, but it seems that the bean counters are in control of the Abbott government.

Decisions about major defence contracts should not be based solely on up-front purchase costs, but on a comprehensive national interest test which includes whole-of-life costs; impact on Australia's balance of payments; the economic value that flows to other industry sectors; tax returns to government and social cost savings that arise from keeping jobs in Australia; and—importantly—providing the defence needs of Australia.

For South Australia, the building of submarines and other naval ships is of vital importance. Hundreds of millions of dollars have been invested in building world-class shipbuilding facilities by the ASC, and invaluable expertise, skills and capability have been established. I understand that the current Defence Capability Plan includes 48 vessels to be built over the next 30 years at a total cost of $60 billion to $80 billion, with through-life support of an estimated $180 billion to $200 billion. Based on an AIG review of the Anzac Ship project, BAE estimates that the benefit to the Australian economy of building ships in Australia rather than overseas would be around $117 billion and 613,000 jobs over a 20 year period. With the end of car making in Australia in 2017, shipbuilding provides a much-needed alternative for workers and industries whilst delivering essential defence needs. But there is more at stake than jobs. It is in Australia's national security and economic interest to further develop and maintain its shipbuilding capability.

Shipbuilding is high-value advanced manufacturing, and if developed strategically, Australia could even become an exporter of naval vessels. Conversely, buying offshore simply exports jobs and knowhow, whilst foreign countries become stronger at Australia's expense. Nor do overseas-built ships and submarines meet Australian requirements without substantial modifications. It is the modifications, or the fitting of separately-sourced combat systems, that inevitably lead to delays, additional expense, loss of control over projects and buck-passing when problems do arise. Where—and who—will carry out future maintenance of foreign built or designed vessels? Yet in a complete backflip from his pre-election commitment, Minister Johnston recently said:

Japan is one of several countries we are talking to actively about our new submarine program.

All indications point to Japan being the preferred supplier of 10 Japanese submarines at a cost of around $20 billion.

In late August the Japanese defence team visited the ASC facility in Adelaide for an undisclosed purpose. North Asia correspondent Matthew Carney reports that the cost of the 10 Japanese submarines will be much more than $20 billion. He cites Japanese defence officials as saying that the Japanese military is unlikely to share all of their expertise and that it would take Australia decades to perfect the submarines' top-secret technology. Furthermore, to run and service a fleet of 10 submarines will require at least 1000 staff that need to be trained for 10 to 15 years. I also understand that Japan has never previously exported submarines, so there is indeed no precedent to guide Australia.

Where is the 'defence logic' that the Prime Minister refers to in buying the submarines offshore? As one person recently said to me: 'Buying the submarines offshore does not pass the barbecue test.' Where is the defence logic of outsourcing to another nation our defence needs? Where is the defence logic of Australia losing its capability to defend itself? Where is the defence logic of strengthening a foreign economy at the expense of Australia's? The submarine and naval vessels replacement project presents the government with an exceptional nation building investment opportunity of around $250 billion over the years ahead. It is an opportunity to stimulate the Australian economy, create jobs, build and retain skills, invest in research and development and, significantly, enhance our national security capability. Conversely, outsourcing our defence needs offshore leaves Australia vulnerable. Responsible governments simply do not trade away these opportunities. Unlike the auto industry, which the Abbott government claimed it had no control over, shipbuilding and the submarine replacement program rest solely and squarely in the Abbott government's hands—and Australians know it. (Time expired)

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