Richard Marles (Corio, Australian Labor Party, Shadow Minister for Defence) Share this | Hansard source

Recently, the Australian National Audit Office released its report on the government's naval construction programs, and it made very sobering reading indeed. Across a range of findings, it raised serious concerns about the way in which the shipbuilding program is being undertaken. It said, for example, that workforce shortage was a risk that Defence was aware of but that the workforce plan due in February 2017 had not been completed by February 2018—an entire year's delay. It noted that the cost of the first phase of the shipbuilding college had blown out from $25 million to $63 million without any explanation and had no ongoing funding. Let's be clear: making sure that there is a workforce that has the appropriate skills for this project is going to be absolutely essential if the much-heralded shipbuilding enterprise that the government speaks of actually comes to fruition.

The report talked about the government's promise to retain 200 workers at Osborne by moving them onto the frigate, offshore patrol vessel and submarine programs. Defence has said it would not be funding those workers from the budgets for those programs. Exactly how that works is a question whose answer remains at large. The report went on to describe a Defence internal review warning about time-line compression in the Future Frigate Program:

extreme risk—

that cost and schedule over-run was likely, and that to proceed on the current schedule had the potential for severe reputational damage to Defence and the Government.

They are extraordinary words coming from the ANAO report. I would have thought that, for any minister, reading those words and hearing that there is an internal defence review warning that the program of government action involved extreme risk would be a moment when you would pause for thought and actually think about whether or not the direction being pursued was the right one. There are few reports that I have read which actually use that phrase. The review went on to offer two solutions to manage that risk; none were accepted, according to the ANAO report.

Other key findings of the report were as follows:

Defence has advised the Government of its assessment that the naval construction programs carry high to extreme risk. Key risks relate to the delivery of expected capability, program cost, ability to meet program schedules, and management of the industrial base. The Naval Shipbuilding Plan did not address the management of these risks in any detail.

That is comprehensive in terms of the review of basically the entirety of the government's naval construction program. In almost every respect, it raises serious questions about how that is proceeding and the way in which it is being managed, and particularly about the way the risk is being managed in terms of the costs of these projects, the time lines of the projects, whether or not the projects will experience an overrun and indeed, as mentioned with the shipbuilding college, whether or not there will be the appropriate workforce, with the appropriate skills, able to deliver on this government's promises—and in fact not just this government's promises but successive governments' commitments to building a surface ship fleet and a new generation of submarines for our Navy, which it most certainly needs. As I said earlier, these commitments very much enjoy bipartisan support. But with that bipartisan support comes, from the opposition, deep concern in reading this report about what it means and what is going on. That ultimately is my question to the minister: given all of these reports and assessments by the ANAO, what on earth is actually going on?

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