Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

The mishandling of the replacement submarine contract and Collins class maintenance program highlights the utter incompetence of the Morrison government. But one should not be surprised, given the coalition government's bungling of the NBN and NDIS rollouts—the other two major national projects this government was entrusted with.

This is a government now into its third term. Construction of the submarines has not commenced. The design phase is already nine months behind schedule. We don't know with any certainty when construction will commence, how much work will be local, when the first submarine will be ready for use, when the last submarine will be built and what the total cost will be. Even if construction were to commence by the now delayed start date of 2024—and that is a big 'if'—it means that it would take this government 11 years, from its election in 2013, to commence construction.

With the last of the 12 submarines expected to be finished around mid-century, Australians are quite rightly asking whether the submarines will be out of date before they hit the water and whether they will meet Australia's defence needs in 2050 and beyond. There are growing differences of opinion about whether the submarines are even fit for purpose, with calls for the contract to be scrapped. According to the national audit report, the cost of the 12 submarines has already blown out from $50 billion to $80 billion, and work has not even started. Likewise, the local content of the submarine build is slipping by the day. Increased local content actually reduces the net cost, because the government will recoup much of the outlay through personal income tax, company tax and GST income from wages, profits and income spent in Australia.

In 2016, the former member for Sturt, Christopher Pyne, built his re-election campaign for the seat of Sturt on the claim that he had delivered for South Australia by securing the submarine contract. He had submarine corflutes plastered throughout his electorate. On the ABC's Q&A program of 23 May 2016, Mr Pyne said:

DCNS has admitted that probably less than 10% of the work will be done outside Australia. Now, most people regard a local build as about 60 to 70%. So, in fact, that's very good news for Adelaide and Australia.

I repeat: Mr Pyne said that less than 10 per cent of the work would be done outside Australia. Now government ministers, and the former member for Sturt, not only walk away from that claim but have even resorted to blaming SA industries for the shortage of skilled tradespeople in South Australia to do the work, and, therefore, industry being unable to meet local content promises. This is from a government that decimated South Australia's skilled workforce by killing off the auto industry and allowing ASC's own workforce to wither while the government dithered. Skilled tradespeople in engineering industries cannot wait around for years without work whilst the federal government vacillates about what work it will send to South Australia and when. That was the case with the replacement submarine program, which was initially promised to Japan, and now we see it as the Morrison government flounders over the full-cycle docking maintenance of the Collins class submarines.

Work that was previously based at Osborne is now under threat of being lost to Western Australia. It has long been understood that South Australia was to maintain the Collins class submarines. In their book Collins Class Submarine Story, Peter Yule and Derek Woolner wrote:

It was not until December 2003 that the contract, worth about $3.5 billion over 25 years, was awarded to ASC, ensuring that the submarines will be maintained through their lives by those who built them.

The government should come clean as to what is in the contract and whether that statement is correct. The continuing uncertainty just adds to the woes of South Australia's struggling economy, where we recently had a call from a prominent SA businessperson for the state's civic leaders to come together and develop a way forward for South Australia. That, of course, doesn't say much for community confidence in the South Australian Marshall Liberal government. And can I say: I totally understand those feelings.

The Morrison government may feel that it has little to lose or gain in South Australia at the next election, and that may well be true, but people's lives are being left in limbo. The Morrison government should stop turning its back on South Australia and make clear where the future maintenance of the submarines will take place.