Nick Xenophon (SA, Independent) Share this | Hansard source

The time is fast approaching when the government will decide Australia's future submarine fleet. In that time it is important to build the case for a sensible, low-cost and methodical approach to that procurement, which will shape the future of the Australian Navy, as well as naval shipbuilding in this country.

That the coalition promised before the last election to build Australia's next submarine fleet in Adelaide is not in question. I have here a list of 16 separate public statements by Mr Abbott as opposition leader and by Senator Johnston as the then shadow defence minister made from September 2012 to September 2013 about building submarines in Adelaide. But since June of this year we have seen the government walking back from its commitments in relation to naval shipbuilding in Australia in general and a future submission project in particular. As John F Kennedy aptly put it, 'Sincerity is always subject to proof'. This government's sincerity in relation to its submarine promise is being stretched to breaking point. But there is still hope that common sense will prevail and the competitive processes followed that pit the best of submarine designers around the world to build them here in Australia.

The government should not be afraid of such competition. Indeed, it is standard practice in defence, when large and expensive defence capabilities are being sought. Competition will tease out the best all-round package for the Royal Australian Navy, for Australian industry and for the taxpayer. Can we all just take a deep breath here. The cost of building submarines is cited to be up to $80 billion by some, but the German sub designer TKMS has quoted a price of 12 submarines being built in Australia, by Australians, in Adelaide at well less than $20 billion.

Since the latest round of speculation about Australia outsourcing its submarine build to Japan, experts in both countries have raised serious concerns with such a course of action. When it comes to capability, sole-sourcing Japanese subs will deny the Australian Defence Force of its stated capability requirements. Publicly available figures reveal that the Soryu has less range than even the smaller European subs available off the shelf and far less range than our existing Collins class submarines. Procuring a Japanese submarine would also likely complicate their ongoing sustainment here in Australia. Japan run their submarines for only about 20 years before replacing them. Our Navy runs their boats for 30 to 40 years. In the latter years of their service, when wear-out failures start to manifest themselves, we may find ourselves with an orphaned class of submarine.

Outsourcing to Japan would mean Australia would miss out on the experience and know-how which comes from the building of submarines, the experience and know-how which can be used to advantage when delivering through-life support to the subs. Off-shoring submarines to Japan will have a massive negative flow-on effect to Australian workers in the naval shipbuilding sector they support and to the economy in general. The Australian economy and industry will miss out on the benefits of technology transfer, innovation, workforce training and skills associated with building submarines and the massive multiplier effect to our economy.

Western governments, including Australia, have always viewed their defence industries as an input to overall defence capability. A strong defence industry is a precondition for a strong defence force. And finally, this decision will have disastrous impacts on my home state of South Australia. I do not want to see my state being de-industrialised through foolish, reckless, federal government policies. We have already seen it with the automotive sector. We may well see it when it comes to naval shipbuilding. We must get the right result here. It is in the national interest to build those submarines right here in Australia, with South Australia playing a key role. Otherwise, we will be looking at massive job losses. We will be looking at outsourcing billions of dollars worth of jobs overseas. That is reckless and must be avoided at all costs.