Sam Dastyari (NSW, Australian Labor Party) Share this | Hansard source

I present the report of the Economics References Committee, The future of Australia's naval shipbuilding industry: tender process for the navy's new supply ships (part 1), together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

I rise to speak on the Economics Reference Committee report, The future of Australia's naval shipbuilding industry: tender process for the navy's new supply ships (part 1)and, in doing so, I want to raise a series of issues that have been identified as part of this committee process.

I want to start by saying that this is only the first part of what is going to be a much larger inquiry into the future of Australia's naval shipbuilding industry. This is a small component of what is going to be a much bigger inquiry into not only what has been an improper and wrongly conducted tender process but also what is going to be the future of the Australian shipbuilding industry, which has economic, national security and job ramifications.

This inquiry highlights the government's failure to support Australian jobs and Australian industry in the Australian shipbuilding industry. The report is a damning report on this government. It shows the contempt that that coalition has for Australian workers and the Australian manufacturing industry. We have seen it with Holden, we have seen it with Toyota and now we are seeing it with Australian shipbuilders. The Minister for Defence's announcement to offshore the build of two Navy supply ships to Korea or Spain was a kick in the guts to Australian shipbuilders—shipbuilders who are already facing an uncertain future, while the defence minister fails to address the valley of death; shipbuilders who are watching the defence minister fail to keep his promise to build the Navy's future submarines here in Australia; and shipbuilders who are seeing a defence minister offshore Australia's strategically vital shipbuilding industry.

I would like to remind the Senate that soon after making this announcement the minister said, 'The construction of these vessels is simply beyond the Australian industry.' Let me say that again. The minister himself said, 'The construction of these vessels is simply beyond the Australian industry.' This is plainly not true. As we heard from stakeholders at the hearing in July, Australian companies are willing and able to work right here in Australia. We have also heard Australian shipbuilders have the skills and capacity to build these ships right here in Australia. Three companies from across Australia have said in their submissions that the ships can be built here in Australia. Peak bodies, state governments and the workers' representatives say the same thing.

My issue is not simply that an Australian company is not going to be awarded the contract; my issues is that a process has been determined that does not allow them to participate and tender in the process. Frankly, this should be an open, clear, transparent process. Where there is an argument on different sides about whether or not Australian companies have the ability to produce these ships, that is fine. That is why we have tender processes. That is why we allow companies to come and compete, to present their case and put forward their plan and ensure the best plan succeeds. Frankly, the emphasis should be on how we can create opportunities for Australian companies to be able to compete—not on how we can find a way to exclude Australian companies.

I know there are those—and there are those from DMO and others—who hold the view that Australian companies are not capable of this build. That is fine. They are entitled to their view. But that is why we have a tender process in which Australian companies should be allowed to participate. That is why we allow these things to get tested. The decision by this government to exclude Australian companies from even being able to present their case and to compete is, frankly, nothing more than a kick in the guts.

This is a government that is not listening. This is a government that is hell-bent on offshoring the shipbuilding industry. Excluding Australian shipbuilders from tendering to build Australia's supply ships is a disgraceful decision that will directly result in Australian jobs being exported overseas—and all of this despite the minister himself saying last year, before the election, 'I get really fired up when I find us giving away our manufacturing base in the defence space to foreign manufacturers. It is just not on.' Well, rather than getting fired up that Australian jobs are being sent to foreign manufacturers, this minister has put up the white flag.

It is clear that only Labor supports Australia's strategically vital shipbuilding industry. The plan that we took to the last election would have brought forward the build of these two ships and strengthened Australia's shipbuilding industry. It would have supported jobs, training and advanced manufacturing in this industry. There are those opposite who said one thing before the election and are now doing something very different. It is time that Australia had a defence minister and a government that will stand up for our strategically vital shipbuilding industry—not a defence minister and a government that are prepared to see thousands of Australian jobs go overseas.

This inquiry will produce a much larger report. There will be site visits. We are going to go out there and talk to the workers, talk to the manufacturers and talk to the industry. But this first report clearly indicates that the tender that is being investigated as part of this process should have initially been open to Australian firms. Frankly, the government should go back to the drawing board, reopen the tender process, allow Australian firms to compete and allow the different debate. The debate that was had in the committee was: are Australian companies capable of this build? That debate should be conducted through the tender process. The companies should be allowed to present their case. They should be allowed to bid. It makes no sense—there is no logic of reason—to exclude Australian companies and Australian workers from being able to compete for Australia's own shipbuilding industry.

We all know the issues of the valley of death. We all know the issues that are facing the shipbuilding industry. We all know that this, compounded with the submarines and other issues that are heading towards the shipbuilding industry have the potential of resulting in the loss of thousands of jobs and that these kinds of builds need to happen when they can happen in Australia. This government made a decision to exclude Australian firms and to simply limit it to two providers, a Spanish firm and a Korean firm, and not allow the Australian firms to even participate—if for no reason other than to at least create more competitive tension. The more companies that tender, the more companies that bid, the more companies that are prepared to put forward their case, the better it will be in terms of driving down the price and creating a competitive environment. This is not the way this process should have been conducted. There needed to be a greater level of transparency, a greater level of openness and frankly a greater level of emphasis on protecting Australian jobs. In this instance the government has failed. We will continue to proceed with this inquiry.

I want to thank Senator Edwards and those in the coalition for their participation in the preliminary part of the inquiry. I think we are going to have a very frank and open debate. There will be a series of different views. That is a healthy demonstration of how the Standing Committee on Economics has been working and will continue to work, where, while there are differences of opinion, there is a level of respect and congeniality which has been a hallmark of this committee—a committee that I am proud to now be chairing. I also want to thank the secretariat of the economics committee, Kathleen and her team, for their incredible work, the tireless advocacy and the work that they do on behalf of the committee. It has been a real honour and privilege to be working with them. I seek leave to continue my remarks.