Nick Champion (Wakefield, Australian Labor Party, Shadow Assistant Minister for Manufacturing and Science) Share this | Hansard source

I know you're going to say I can't use props, but it's a very important graph and I'm only illustrating to those who might be watching that they should go and have a look at that report by the Auditor-General and the ANAO, because it makes a number of important points about the government's Naval Shipbuilding Plan.

The plan itself is very important. Presumably I can refer to the Naval Shipbuilding Plan. But on page 64 of that it says 'why it is critical to manage this workforce growth.' It makes the point that one of the things that bedevilled both the air warfare destroys and the Collins-class constructions was not inefficiencies in terms of people not doing their jobs; it was the growth of that workforce and the acquisition of skilled workers. That just doesn't happen overnight, and that's what the report makes clear. That is an economic risk to those projects, and presumably it will be an economic risk to future projects.

Interestingly enough, on page 68 of that report it talks about the rehiring of former naval shipbuilding workers. There's an interesting point in there where it says:

However, the longer these workers are out of shipbuilding jobs, the greater the chance they will find attractive work in another industry or exit the labour force. Mature age workers could potentially fill vital foreman and middle manager roles, or supervise the training of the future generation of naval shipbuilding workers.

It also goes on to talk about recruiting people from the oil and gas industry and from the automotive manufacturing industry. But the government's done absolutely nothing about either of those things, and it's still letting people go at the ASC. This is a critical economic risk to shipbuilding in South Australia. If you don't believe me, have a look at page 29 of the ANAO report:

Has defence determined its workforce requirements?

There is a box that says:

Defence has not determined industry workforce requirements for naval construction programs.

The report goes on to say:

The assumptions of Defence’s current workforce planning activities are not based on a cost-benefit analysis. In particular, whether maintaining the shipbuilding workforce between the Hobart Class Destroyer and follow-on surface-ship builds is the most cost-effective way of establishing the naval shipbuilding enterprise.

Think about that. What that's saying is that this government did not look—did not look!—at the cost of redundancies at ASC or at the cost of dispersing the shipbuilding workforce at ASC versus holding it there and having those workers continue to be employed. They could have trained another generation of shipbuilding workers and they could have trained apprentices. ASC could have been the host employer to build and maintain that shipbuilding workforce. I put to you the cost of making these workers redundant and the cost of those redundancies: the cost of having someone to manage the redundancies, the cost of the redundancy itself, the economic cost to that worker, the cost to the community and then the cost you have to contemplate of going out there to find that electrician, to find that rigger, to find that welder. That's a cost too. So, we're dispersing the workforce, as this graph shows, completely destroying it, running it down to zero, and then we're going to run it back up again—running it down at great cost, running it up at great cost. This is this government's magnificent achievement: the destruction of one workforce and the creation of another, at great economic cost and without a cost-benefit analysis.

What they have done is set up a Naval Shipbuilding College. We will hear all about that, this Naval Shipbuilding College. In the mind's eye, you can imagine people training in rooms and the like. But that's not what this Naval Shipbuilding College does. What it actually does is broker, apparently, between private industry, who have to be the host employers to these apprentices, and all the other providers who are currently there at the moment—providers like PEER, which is the group trainer for electricians in South Australia. Why do we need this middleman? The price of this college has blown out from $25 million to $62 million; the cost has blown out by 2.5 times already—to perform a function that I'm a bit curious about why we need it. Why do we need this $62 million middleman?

Here's the rub. I know employers of welders. I know welding shops who look down the track. They have their own apprentices, they do their own workforce training, they are industrious employers and they are profitable employers. They don't need help from government, truth be known. They can go out there and make a profit without us. But here's the thing. They're terrified that one day soon, when the frigates kick off, we are going to see a wage spiral. This has happened before, whenever there is demand for skilled workers. We know these workers. You can't produce them overnight. It's four years to produce an electrician, plus another year to get them really up to scratch in shipbuilding. These are not the sorts of skills that you can acquire overnight. It's the same thing for a welder and the same thing for a rigger. For white-collar workers it's even worse. For engineers, you do a three-year degree and then it is three years, really, getting your head around shipbuilding. So, these are workers that cannot be produced overnight. We have welding shops in my electorate that are terrified of losing their welders to the shipyards in three or four years time. And they're expected to do this government's job; they're expected to take on extra apprentices, perhaps to get the shipbuilding college to be the broker between them and the group trainers.

This is a ridiculous situation for us to be in: the destruction of one workforce—the redundancies and the pain and suffering that goes with that—and, on the other hand, we face a skill shortage in the shipbuilding industry in South Australia in the future. This is what this government is going to bequeath to us. This is the cost of having three different prime ministers, I've forgotten how many defence ministers, at least two defence industry ministers now and this revolving door through the ministry. This is the cost of it. This is the price that the workers of South Australia will pay, and this is the price that these projects might well pay in the future. And what will the government—the future opposition—say then? They'll say, 'It's all the workers' fault,' just like they've done previously.

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