Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I move:

That in the opinion of the Senate, the following is a matter of urgency:

The need for the Abbott Government to keep its pre-election promise to design and build Australia's Future Submarine Fleet in Adelaide and to justify why it's planning to destroy Australia's strategically vital shipbuilding capability.

This motion deals with the need for the Abbott government to keep an election promise. I know that might sound like a novel idea, but this is an election promise that every South Australian would say should be kept—that is, the promise to build Australia's future submarine fleet in Adelaide.

We know that asking this government to keep an election promise is an exercise in futility. After all, Mr Abbott has broken so many promises and told so many lies to the Australian people. His promise of no new takes was broken. His promise of no cuts to schools was broken. His promises of no cuts to health were broken. His promises of no changes to pensions were also broken

And just yesterday we saw another new broken promise from a dishonest government, its Prime Minister and his arrogant Treasurer, and that was the promise not to make any adverse changes to superannuation. We know what happened: a freezing of the superannuation guarantee contribution for over eight million Australians.

What we see from this Prime Minister, with absolute clarity, is that all of these promises were made, including the one before the chamber, with one aim only, and that was to get himself elected. Now that Mr Abbott is in power, the promises have all been ripped up—trashed, discarded like litter along the wayside of his first 12 months in power. Twelve months after this election, what Australians know is that this Prime Minister and this government won the election by lying to Australians, and now we are paying for their broken promises.

I raise this track record because it is now clear that this Abbott government is preparing to break yet another promise. This latest broken promise would inflict deep and lasting economic damage on Australia's shipbuilding industry and especially on South Australia. Last year, the current Minister for Defence went to Adelaide, called a press conference in front of ASC and said:

… I want to confirm that the 12 submarines as set out in the 2009 Defence White Paper and then again in last Friday's Defence White Paper are what the Coalition accepts and will deliver.

We will deliver those submarines from right here at ASC in South Australia.

Just before the election, the Prime Minister told the Adelaide Advertiser:

… work on the next generation of submarines should focus here on the South Australian ship yards.

What is occurring now? This government is walking away from its promises to build 12 submarines in Adelaide. It is looking at acquiring submarines from overseas and it has also barred Australian shipbuilders from even tendering to build new naval supply ships, a decision which will simply ensure fewer Australian jobs in this important industry.

The Abbott government is abandoning South Australia's defence manufacturing industry, and we have seen it before. It is abandoning South Australia's defence manufacturing industry, just as it turned its back on South Australia's automotive industry. This decision, if the government proceeds with it, will jeopardise thousands of jobs in South Australia. It will jeopardise small and medium-sized businesses in South Australia, which rely on defence contracts for economic opportunities and rely on defence contracts for jobs. It will also damage the viability of the naval shipbuilding industry nationally. This is a strategically important part of Australia's advanced manufacturing industry.

We also know that defence shipbuilding is an important source of jobs in this country, an important source of advanced technical and engineering skills and an important source of sophisticated technological management and organisational capabilities. All of these things are essential for any nation that aspires to have an advanced, sophisticated and competitive manufacturing industry. They are all at risk from this government's short-sighted approach to the submarine project and to naval shipbuilding.

But there is another matter, and I look forward to senators on the other side telling us the answer to it. You really have to ask, 'What has Tony Abbott got against South Australia? What has the Abbott government got against South Australia?' What we also have to ask is this: where are the government's South Australian ministers and backbenchers? Where are the South Australian ministers and backbenchers from the Liberal Party? Why are they failing to stand up for their state? Why are they failing to represent the people who elected them?

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Failing? You were the minister for finance!

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

There is a lot of noise on that side. They are very noisy in here, aren't they, but I am sure South Australians will hear absolute silence when it comes to public statements backing in the shipbuilding industry in South Australia.

Senator Edwards interjecting—

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Order!

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Edwards is yelling a lot in here, but he is a mouse in the party room, and he is completely mute in the South Australian media when it comes to standing up for South Australia. You are quiet now, aren't you?

To paraphrase Oscar Wilde, for the Abbott government to slug South Australia once might be explained away as misfortune; when it slugs South Australia a second time it looks like perhaps carelessness. But when the Abbott government slugs our state a third time, we can only conclude it is part of a deliberate campaign of anti-South Australian policies—and that is what it has done.

The first hit to South Australia was last year's decision by the Liberal Party to slash support for the automotive industry. What happened? Holden decided it would stop making cars at Elizabeth, a hammer blow to the local workforce. We had a South Australian minister, Mr Briggs, backgrounding the media against Holden, and that was followed by the spectacle of the nation's Treasurer on the floor of the parliament goading Holden to pull out of Australia. The second hit to South Australia came with the government's budget, an unprecedented assault on South Australia's hospitals and schools. Six hundred and fifty five million dollars—

Senator Edwards interjecting—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order! Senator Edwards, you will cease your interjections, please.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. The budget will cut $655 million from hospitals over four years, the equivalent of removing 600 hospital beds or the entire Flinders Medical Centre. The budget cuts $335 million from South Australian school funding over six years, and what does that mean? It means Mr Pyne is presiding over cuts in his home state equivalent to removing 3,000 teachers.

The budget singled out South Australia in other ways too. We have one of the most extensive networks of regional roads of any state or territory, and when I was finance minister in the former government—

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Oh, now you're owning up!

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Senator Edwards!

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I supported local government funding arrangements which recognised South Australia faced a higher cost burden to maintain these roads. I acknowledge my Liberal predecessor Senator Minchin. He introduced them; we maintained them. They have been scrapped by the Abbott government. This will hurt local government—local and regional councils. It will lead to the deterioration of our state's road network. Mr Briggs has cheered it on, and you opposite are being completely silent.

And now we have a third hit to South Australia: the government's move to abandon its promise to build 12 submarines in Adelaide—a brazen betrayal of our state. It will cost jobs and it will hurt the state's economy. What is up with the Liberal frontbenchers in this government. In the past South Australia has had passionate advocates in federal governments of both persuasions. But there are no Amanda Vanstones or Nick Minchins in this government—only a new generation of South Australia Liberal frontbenchers and backbenchers so spineless, or so ambitious, that they will not stand up for their home state. We see Mr Pyne cutting schools in his home state. We see Mr Briggs acting as cheerleader for his factional mate the Treasurer in his decision to abandon Holden and its workers. We see Senator Birmingham completely silent while the government threatens to dismantle the renewable energy target—another broken promise that would have a negative impact on South Australia's renewable energy industry. I never thought I would say this, but bring back Senator Minchin. Because all the fight has gone out of the South Australian Liberals. They might be too intimidated by the Prime Minister's office or perhaps too interested in personal ambition to stand up for their state.

But Labor will not stop fighting on this issue. We will hold this government to account and we will stand up for South Australia. We will stand up for our state and we will stand up for our fellow South Australians.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I rise on this important issue and the references to promises. I remember the cruellest hoax of all, back in August last year. Senator Wong might be interested to know that the member for Wakefield, Mr Champion, wrote a letter to the constituents of Wakefield in which he stated, three-quarters of the way down from the top of the letter, 'I have secured the future of General Motors Holden until 2022.' What a cruel hoax that turned out to be. Talk about shrill. He is either incompetent—which I suspect—or downright dishonest, because that was not within his remit or his power and he clearly could not say it. But he did trick the voters of Wakefield by suggesting that he had saved Holden. He clearly had not. He has still offered no reason why he would say that.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

Are you going to talk about submarines?

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I am quite happy to talk about all these issues.

Senator Gallacher interjecting—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order on my left. You will cease interjections.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

But if you are going to misrepresent the issues, if you do not want to know the truth about some of your colleagues and the representations that have been made, you should know at least what they are writing to their constituents, misrepresenting the facts, because Mr Champion, the member for Wakefield, certainly did not save Holden. Senator Gallacher must surely acknowledge that Holden were not saved, as was promised, by Mr Champion.

We have fulfilled the promises that we went to the election with. We went to the election in 2013, and indeed in 2010, saying that we would repeal the carbon tax, and for that matter the minerals resource rent tax, and we did. We went to the election saying that we would stop the boats, and within 12 months it is down to one boat in that period of time.

Then we said that we would build the roads of the 21st century. You on the other side are in complete denial. You missed the turning of the sod by the Prime Minister last week on the billion dollar south road extension of the Torrens to Torrens.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise on a point of order on the matter of relevance. The senator is talking about roads. The urgency motion before us is about Australia's future submarine fleet. The last time I looked submarines do not travel on roads, so perhaps you could bring the senator's attention to the topic before the chamber.

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

There is no point of order. The tradition is to debate under broad terms.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

What a nonsense. Senator Wong spoke in here about promises. I am just telling the people in this chamber about the promises we have delivered on. We said we would get rid of the carbon tax. We said we would stop the boats—we are nearly there, 12 months after your six years of indifference to border security led to a tsunami of boats and a tsunami of deaths on the sea.

Now we are talking about the other promise of building roads. We are building them, and we are building them in your home state, Senators McEwen and Gallacher. We are building the roads of the 21st century.

And what else did we promise? We promised to repair the budget, because that is what is done by people who are responsible and understand the driver of an economy—they rebuild a budget, and we always have to. We had to repair the $96 billion in 1996, and we had to repair the blowout that occurred under your reign. All of you over there should hang your heads in shame. And now we have to fix the budget. Part of the budget is health, education and the military. This is where we obviously get to talk about submarines. Submarines are singularly—

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

Boats.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

They are not boats. Can I assure Senator McEwen that submarines are not boats. That might be part of the problem that we have here in this chamber. I guess when the issue was raised, 'We need to spend more money on boats,' they left out submarines, because that is exactly what happened under Labor's reign. They cut more money out of this program, because it was over allocated.

Senator Conroy interjecting—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order! Senator Conroy, I will not tolerate interjections. I was very firm on Senator Edwards when Senator Wong was speaking, and I expect the same from your side.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

It is very nice of Senator Conroy to join us. Let us get to him. Ours is an approach to defence based on sound economic principles, on value for money, on economic accountability and on the responsible expenditure of public money. Our approach to defence acquisitions is no different. The coalition government is committed to a viable shipbuilding industry that provides value for money while adhering to world's best practice. Decisions in this space are made on the basis of the needs of the services and the responsible expenditure of taxpayers' money—there is no back-of-the-serviette or Coke-drink coaster accounting anywhere in our budget costing rooms, through you Mr Acting Deputy President to Senator Conroy.

Those opposite would have us embark on a procurement path that gives little consideration to our financial responsibilities, little consideration to fiscal prudence, little consideration to balancing the books, and little consideration to the fact that we are spending other people's money. They are called the 'taxpayer'—the people out there in Australia who elected this government on 7 September last year to restore confidence in this economy. Labor's reckless approach to spending in the Defence portfolio is not an example in isolation. It is a part of their rich heritage of fiscal recklessness and their rich tapestry of economic vandalism—with the notable exceptions of Prime Minister Hawke and Prime Minister Keating, since they achieved some reasonable reforms. There was a lone voice in the last government, Mr Martin Ferguson's. He was obviously outgunned by his socialist colleagues, the spendthrifts over on the other side. He left parliament, sadly, and is now working with industry, where he enjoys a great deal of respect. But then there is the current opposition defence spokesperson, who is with us here in the chamber, Senator Conroy, whose most notable contribution to policy making has been that back-of-the-napkin episode.

I remind the chamber, as if it needs reminding, that as the Labor communications minister, Senator Conroy committed the country to a $43 billion policy that was the NBN. This $43 billion policy commitment was devoid of any cost-benefit analysis.

Senator Conroy interjecting—

Senator Conroy, you may laugh about it but $43 billion is a lot of hot dinners. You might think it is not a lot and you may treat it in a very cavalier way, but it does not have a business case at all. It would have blown out to $73 billion, if the coalition had not been elected to repair the damage.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I rise on a point of order on relevance, Mr Acting Deputy President. I appreciate that you are being very tolerant in allowing him to talk across the chamber instead of through you. On the point of relevance, the National Broadband Network has nothing to do with shipbuilding. You might want to draw him back to the topic.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

There is no point of order.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Thank you for the protection from what is quite idiotic. The Labor Party left Australia on a debt trajectory of $666 billion. The Labor Party came to power with a budget surplus of $20 billion, with $45 billion in the bank, and you wonder why we have to scrutinise the budget, Senator Conroy, because clearly you never did or had any intention to. From the way your forward estimates were projected in health, education and defence, you were going to have to start printing money at some point in time. The money was never there for the cuts you talk about. It is just another cruel hoax like the member for Wakefield's promise to that electorate last year that he had secured the future of Holden.

The coalition has brought forward an open competition with Australian industry to construct more than 20 replacement Pacific patrol boats. That is what we are doing. We are doing what this country can. Defence acquisitions will be made on the basis of defence logic. Under this government, they will be. (Time expired)

Bob Day (SA, Family First Party) Share this | Link to this | Hansard source

This is not my first speech. As a senator for South Australia, I feel I must speak briefly on this motion.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I thought you were an enemy of the state!

Bob Day (SA, Family First Party) Share this | Link to this | Hansard source

When I started to read it, I got to the first part, 'to design and build Australia's future submarine fleet in Adelaide', and thought it was like seeing a footballer who has been infringed and awarded a free kick. I said, 'Yes, I will pay that.' But then I got to the second part about destroying the shipbuilding industry, which states: 'why it's planning to destroy Australia's strategically vital shipbuilding capability'. It is like the player who won the free kick but then pushed the infringing player and had the decision reversed. I have not been here long, and I would very much like to support as many senators' motions on important matters as I can. However, I see perfectly good motions—which I would love to support—that are spoilt by a lack of discipline in other parts, and I cannot support them.

I know from my discussions with the defence minister this week that the government is not trying to destroy Australia's shipbuilding capability. As a senator for South Australia in support of my state and its industries, shipbuilding in particular, I know there are opportunities to maintain and grow that capability if the elected leaders of my home state get their act together. I oppose the motion.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The good news, Mr Acting Deputy President Williams, is that I will not need your protection, to borrow the phrase from my learned colleague. I rise to speak on this urgency motion. There is an absolute need, despite what our new colleague from South Australia says, for the Abbott government to keep its pre-election promise to design and build Australia's future submarine fleet in Adelaide. This issue is of the most serious importance for South Australia and our country. Before the election—and this goes to the heart of this debate—Senator David Johnston, now the Minister for Defence, stood outside submarine builder ASC in Adelaide and said the following in a video clip that I will now show the chamber on my iPad:

The coalition today is committed to building 12 new submarines here in Adelaide.

Straight up and out. It is as simple as that—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Senator Conroy, that was out of order.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

in black and white on the television of Australia, and particularly South Australia. That is exactly what he said. That we will deliver these submarines from right here at ASC in South Australia. He said: The coalition today is committed to building 12 new submarines here in Adelaide.

It does not get any plainer than that in black and white. That is your defence minister conning the people, conning the people of South Australia and conning your electors about their promise and about what they were going to do with submarines in South Australia. That is why you should support this motion, Senator. That is exactly why you should, because this is a con job. Not 'might' build; not 'possibly' build. No, Senator Johnston said that the coalition will build 12 new submarines in Adelaide. I have jogged the Senate's memory by showing you the video clip live in colour of Senator Johnston making that commitment.

But what has happened since the election? The opposition has asked the defence minister seven times in the Senate to recommit to his pre-election promise. He has refused every single time. Seven times—and refused every single time. And what about the government's South Australian senators? Silence. What about those who made a contribution recently from the government? Silence, as well. While you may have failed to win Liberal Party preselection, I am told by some of those opposite—I have lost count of how many—you are not a government senator. You have the opportunity to hold this government to its promise—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Senator Conroy, you will direct your remarks through the Chair, please.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr Acting Deputy President, I am glad you have remembered that standing order.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I wish you had.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

And I will. From the South Australian Liberal senators—silence. They have not uttered one word demanding that this promise be kept. Not a word. Today is a test for South Australia Liberal Party senators and other South Australian senators. Will they stand-up for there state against a broken promise of this government, or will you all stay silent?

It is clear from the public statements of the Abbott government that it plans to abandon this promise and buy submarines from overseas. Just last week, we saw a secret delegation of Japanese submarine experts secreted into ASC. The South Australian government was not even told. They just brought them in, hid them and raced them out. They would not let them stop and answer questions. They would not even let them stop and answer a question at the airport. They dragged them through the airport with cameras following and still would not stop and answer a single question.

The government seems determined to do all it can to undermine Australia's strategically vital submarine and shipbuilding industry. In uncertain times, the last thing we should be doing is killing our submarine industry. It is against our national interest. It hurts our national security and it undermines our defence capability. The most vital question for you to consider over the coming months—because this is going to become live very soon—is: are the Japanese submarine's designed to meet Australia's capability needs and not to simply take them off the shelf from Japan? That is the most fundamental question. And what do you hear emanating from our defence establishment—from people who know about the submarine build? This government is not only breaking its election promise about where it is going to build them in South Australia but it is also not buying a submarine from Japan that has Australia's unique strategic needs for range, endurance and capability. That is the test. Do the Japanese submarines meet our capability needs?

This government is planning on spending billions of dollars on new submarines that are not going to be what our Navy say they need. The government is also doing nothing to ensure the survival of Australia's shipbuilding industry. Here is what the minister said—and I will not show it because I would not want to anger you again, Acting Deputy President Williams. Here is what the minister said:

I get really fired up when I find us giving away our manufacturing base in the Defence space—

(Time expired)

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I rise as I have done on multiple occasions to talk about shipbuilding in South Australia, and specifically in this case on submarines. I would like to go to the wording of this MPI, which talks about design and build, and yet the clip that we just had played emphasised the build. I just want to talk about design for a moment. The three areas that I want to talk about are the design, the build and the vital shipbuilding capability.

Firstly, in terms of design, one of the things that I had the privilege of doing in 2012 was travelling with a bipartisan committee to Spain, Germany—two of the committee went to France as well—the UK and the US, looking at submarines and the potential for Australia to build a future submarine. One of the things that became very clear was that there were two aspects of design that we need to be very much aware of. Firstly, that Australia does not have the capacity to design a submarine from scratch as a unique Australian design. Whichever nation we choose to partner with, we will need a design partner. That was the clear message that came through to the delegation from each of the nations, including those who do not have any skin in the game—for example, the UK and the US. So, whether we ended up going for a design that originated in Germany, Japan, Spain, France or Sweden, the reality is that the design will be a shared effort. In terms of numbers and capacity, we just do not have the base here in Australia to design from scratch a submarine without taking on completely unacceptable levels of risk. That is the first point about design: we will have a design partner, just as we did with the Collins where it was Kockums. The engagement of potential design partners is not unusual, and with that in mind we have had people from multiple nations coming through South Australia, looking at aspects of our defence industry and our defence needs.

The second thing is that Australia must have an understanding of the design. My whole professional career prior to politics was involved in the support, the certification and the testing of defence materiel. If there is one thing that I can bring to this Senate, it is a deep understanding of the fact that, if we want to be a sovereign nation with capability to own, deployed effectively and maintain defence equipment, we must understand the design. The way we do that will vary. In some cases it will be completely developing and owning a design here; in other cases it will be a transfer of IP from other nations; in some cases it will involve us sending engineers to work deeply embedded with manufacturers and other armies overseas. Whichever mechanism we put in place, it is imperative that we understand the design to make sure we can sustain the equipment through its life and that we can repair the equipment.

We cannot ever afford to be completely dependent upon another nation. I can point to numerous examples—particularly in the aerospace world which spend my background—where even our most trusted allies at times when they were under pressure and did not had the capacity to provide spare parts or design effort or even updating of systems to meet the requirements for new threats or operating environments. I can also point to cases where we have saved considerable money and developed more effective and capable systems by having an indigenous design and certification capability for our weapon systems so that either we can be smarter about how we prepare them or we can have the option to modify to meet new threats or environments. They have proven to be very capable in joint exercises against the parent service—in some cases the US where the two capabilities have exercised together.

Secondly, in terms of build, one of the things we learnt during this delegation was that there is a range of options for built, many of which come around the risks with quality and therefore the safety and effectiveness of the system and the risks with cost and schedule. One of the consistent messages that came through to the committee was that the preferred avenue for most vendors was to build the first couple of boats—particularly if you are going to build a number of boats in flights—in the country of origin of the design such that the workforce, whether they be manufacturing production workforce or the engineering workforce, have the opportunity to train with and to get the hands-on experience of the build of that boat. Then that company would work at the Australian manufacturing facility—which the coalition and Labor have identified as South Australia—to then look to build the rest of the flights of boat in Australia. That achieves a number of things: it achieves a risk reduction in making sure that we have the right skills and the competence in place to build the boats, yet it achieves an effective transfer of IP and knowledge—not only for the remainder of the build, but, importantly, it also establishes the infrastructure and the engineering know-how to support the fleet of boats through their life. If needs be, rather than a refresh program or service-life extension—it might adopt the model that some countries use of scrap and rebuild to continue the production line. In that way you continue the upgrade cycle for those vessels.

The last part is about their claims of destroying shipbuilding capability ,and it goes to the issue of the valley of death and losing existing investment. I merely lay on the table again the fact that I have laid out in this place a number of times before: at the moment we are just past the peak of workforce for the Air Warfare Destroyer program. We are now in 2014; the Air Warfare Destroyer decision to build at ASC was made in 2005; and the decision to award the design to Navantia was made in 2007. That means that if we wanted a follow-on surface ship to sustain the investment we have in skills and infrastructure at the shipyards in South Australia, Victoria and in New South Wales, that decision would have had to have been made six, seven or possibly eight years ago in order for that work to continue.

The way this government is looking to achieve economies of scale to get the productivity to where we want to be and to sustain our vital and strategic shipbuilding capability is to say: we are now in government and we have been for almost a year; we cannot make a decision to have a completely new design of ship built here at this time, but we can commit to doing the engineering work and to look at how we can use our investment design knowledge around the Air Warfare Destroyer hull to commit to integrating both the CEA radar and the Saab 9LV combat system—both produced here in Australia. On the basis of that engineering risk reduction work we can then look at extending the build program for hulls of the same design as the Air Warfare Destroyer, which will become the future frigate. That means very little risk and, by capitalising on the already-made investment in skills and infrastructure, we can continue to build hull blocks, which get rid of the concerns about the valley of death. When the more complex side of Air Warfare Destroyer program is complete—which is the fit out of the combat systems—we can then roll on to the assembly of the hull blocks and the CEA radar and 9LV systems. So, far from destroying Australia's strategic vital shipbuilding capability, the coalition is in fact putting in place concrete and funded steps to maintain this capability which, for all the reasons I have outlined before, is vital to us having not only the jobs in South and Australia but also the sovereign capability to own and effectively employ defence assets.

Penny Wright (SA, Australian Greens) Share this | Link to this | Hansard source

I am pleased to speak to this motion, because I care about jobs and, as a South Australian senator, I especially care about South Australian jobs. The Australian Greens support the maritime engineering and shipbuilding industries. When it is in our national interest to procure naval vessels, we are committed to ensuring that manufacturing and building of the vessels occurs in Australia and that our naval vessels are maintained here in Australia. In the future, grappling with climate security threats will inevitably involve increasing naval capacity, particularly with regard to amphibious vessels, which will build local jobs, skills and investment in local design, building and maintenance of our navy and other ships. On an island continent I believe it is crucial that we have the advanced manufacturing know-how and capacity to build our naval vessels and ships.

Of course, there are always important questions to ask when defence procurement and the building of a multibillion-dollar fleet is being contemplated. Uppermost must be the confidence that they will meet Australia's security needs. We do not want to replicate circumstances that could allow for a repeat of the kind of acknowledged design mistakes that have occurred in the Collins-class submarines—mistakes which have not benefited the industry nor Australia's defence and security. What we do want, though, is the maintenance of advanced manufacturing as an industry in Australia and particularly in South Australia, a state which will be so adversely affected by the loss of the Holden manufacturing plant following previous losses of advanced manufacturing.

What we do have in South Australia is a skilled, sophisticated workforce capable of building the ships we need for the future—ships and vessels like landing helicopter docks, the vessels required for the Pacific patrol boat program and the vessels needed to replace the Armidale-class patrol boat. The South Australian workforce has the expertise, and these vessels should be built in South Australia.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution in this debate and, unlike Senator Edwards, I will probably address the subject at hand. The reality is what has really been missed in this debate is:

Successive Australian governments have accepted that building the DDGs in Australia would involve a premium over and above the cost of building them overseas. The decision to build locally is based on a desire to retain shipbuilding jobs and facilities, project management and design skills, and experience with sophisticated naval combat systems, so as to enable through-life support in Australia and a continuing naval shipbuilding industry.

That assistance has been measured by the Australian National Audit Office at about 30 per cent—$1 billion.

It is not an accident that successive governments, successive ministers and successive politicians—very prominent amongst them, I might say, South Australian Liberal senators—accepted this premium. Why? Because they were batting for their home state. They wanted jobs. They wanted some manufacturing. They knew and could see into the future, as all senators should be doing, that you need a manufacturing base in a small state like South Australia. We have wheat, wine, mines and the rest of it, but manufacturing is what keeps the vibrant city of Adelaide going. They could see, as in the considered contribution from Senator Fawcett—I understand Dave; he is very technically perfect. He understands this better than probably most senators in this place, but he did not get out and bat for workers and manufacturing jobs. He did not play a State of Origin game. We all love State of Origin, and that is what this place should be about. When your state is under attack, you should be batting for the jobs in your state. You should not be, as Senator Edwards did, bagging someone else for some other misdemeanour or catastrophic performance in your comments.

You should be looking very closely at the 27,000 jobs in the defence industry of South Australia. Successive governments have accepted that there is a premium for having those 27,000 jobs. Are this government and minister abandoning that well-worn path? If he is, he should get up and say so. He should simply say: 'That's it; we've changed our mind. Successive governments have been wrong. My predecessors as Minister for Defence—Robert Hill, Nick Minchin or Amanda Vanstone—were all wrong. We shouldn't be doing this. We should simply go to a supermarket and buy some submarines over there. We'll worry about the warranty later on. We'll worry about the maintenance later on. We'll worry about the rebuild later on. We've only got this small bit of money and we're going to do it this way.' I do not think that is how defence should work.

Defence is the defence of this country, and 27,000 people in South Australia are working diligently to be efficient, productive and do a 100 per cent job every day. Not all of the design-and-build process has been all that efficient. In fact, the National Audit Office, when asked if this means people are taking their wages and not doing the work, said: 'No, that's not what it means at all. It means the work they've done has been redesigned and that in cases they've had to do the work six times. So there is a productivity issue, but it was a language difficulty between a Spanish designer and an Australian shipbuilder.'

Go back to the Swedish designer of the Collins class. There were umpteen examples where there was a disconnect between the design and the build and there was a loss of productivity. But we have been doing it long enough, and our people really are worth investing in. We should not be cutting for the short-term objective of reducing expenditure by potentially putting 27,000 jobs at risk.

I respect Senator Fawcett's contribution in this area and would defer to his knowledge in a lot of cases. He is very, very diligent on a lot of this stuff. Senator Edwards, I said the other day, is bereft of knowledge on most things other than wine—and, on today's performance, I think it's consumption of wine that's his special subject! Senator Rushton has not said boo on this. Senator Birmingham is completely absent from the debate. Senator Birmingham has not made a contribution other than a snide comment across the chamber to the Leader of the Opposition in the Senate when she had to leave for a meeting the other day. And Senator Bernardi has probably got the handcuffs on, because his contribution would blow the place up! Sooner or later South Australian electors will look at this gang and say they are not batting for their home state. Acting Deputy President Williams, I have heard your contributions many times. Senator Macdonald is famous for it. Senator Smith has batted for Western Australia. No-one from the Liberals in South Australia are out there advocating for the 27,000 people in this area.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I thank you for the opportunity to contribute to this debate. I just cannot understand why the Labor Party continues to beat itself up. It is as if they are lemmings looking for a cliff to jump off. Now here we are, in this situation with regard to the question of submarines and South Australia.

Originally, in the 1980s, the decision was made to build submarines in South Australia, not for good policy or defence reasons, but simply because of regional issues. Time does not allow me, on this particular occasion, to talk about that. But I do want to talk about three issues this afternoon. The first issue is Labor's failure, as usual, to advance Australian shipbuilding. The second issue is the actions of the Abbott government in trying to undo the wrongs and put the whole defence situation back on track, including shipbuilding. Thirdly, I would like to make few comments about the actions of the Abbott government, led by the eminent defence minister, Senator Johnston, in fixing Labor's neglect by the building of new supply vessels.

Let me start by going back to 31 October 2007. This is an article I am going to quote from TheSydney Morning Herald. The then opposition leader, Kevin Rudd, said:

A Labor government would … ensure the submarines were built by ASC at its Port Adelaide site, with construction to begin in about 2017.

The then opposition leader said that the:

…$6 billion air warfare destroyer project in Adelaide at that time would be tapering off.

Mr Rudd went on to say:

Starting the process this year will guarantee continuity of work for South Australia's defence industry and those employed in the sector ... a Labor government would make it a priority to ensure that the necessary preliminary work on Australia's next generation of submarines was carried out in time for consideration and initial approval in 2011.

We have gone passed 2011 and nothing has happened. He talked about detailed analyses—well, we all know what his detailed analyses were. We saw plenty of evidence of that with the NBN and himself and Senator Conroy and decisions on numbers, taking us through to 40 years into the future. When talking about vital military capability for Australia, Mr Rudd went on to say:

Work on the production of new submarines is a task essential to Australia's national security that the Howard Government has failed to tackle.

If you have a look at where Labor's failure has been in this place, it is an endless list, but I took out the main priorities. Firstly, deferring the critical strategic decision on the submarines. Secondly, deferring the critical strategic decision on the Navy tanker ships. I go on—asleep at the wheel was the then Labor government, as the new destroyer program went off the rails. Of course, here we are now with the Labor Party moving this matter of urgency when, indeed, they are in no position to criticise, because their contribution to the whole exercise has been lamentable. You might say, 'Well, give me some examples of this.' I will, indeed.

It was under the so-called leadership of then Minister Stephen Smith when $16 billion was cut out of the Defence budget. It would not have happened had Senator Faulkner been the defence minister. As we know, Senator Smith did not want to be the defence minister; he wanted to be foreign affairs minister, and he made that plain to everybody, including those in the Defence family. You can understand how that went down. The share of GDP spent on defence had fallen in the last years of the Labor government to 1.56 per cent—its lowest level since 1938. That was after the incoming Prime Minister, Mr Rudd, spoke about maintaining the vital military capability for Australia. In fact, in 2013 the first person to speak on this debate was the Leader of the Opposition in the Senate, a South Australian senator, the then finance minister, Senator Wong. It was the largest cut to the defence budget since the end of the Korean conflict. They cut 10.5 per cent from the budget itself.

What happened under Labor? This is what amazes me that they would bring this matter of urgency for debate. It was on their watch that the Australian defence industry shed more than 10 per cent of its workforce because of budget cuts. It was under the Rudd-Gillard-Rudd governments that they made three decisions regarding defence vessels and not one of them went to the Australian shipbuilding industry. The first was HMAS Choules, which I had the pleasure of being on board when it was named in Fremantle harbour. It was purchased from the UK for $100 million. The second was the new Antarctic icebreaker to replace the Aurora Australis. It has not been decided yet, and I will stand corrected but I understand from the Labor government at the time that not one Australian company was invited to bid. The third was the LHD landing craft, which achieved its first pass approval, but to be built overseas—the hull to be built in Spain and then returned to be fitted out.

We then go specifically to the submarines themselves. What has Senator Johnston done, having picked up the lamentable situation? As he said the other day, when he opened the box there was nothing in it—zero. So no decision has been made yet, but what he has moved towards immediately is the production of a white paper to be delivered in 2015. He made the point that, regardless of the final decisions taken, there will be substantial submarine related work in Adelaide and that means more jobs for South Australia. He also made the point that I introduced my contribution on, and that is that decisions will be made on defence logic, not regional policy. They will be made on the basis of sound defence policy.

What are the three main criteria in the submarine replacements? The first is the right submarine for Australia. The second is that it works from the start. The third is that it be affordable throughout its life. Regrettably with the Collins class, although it certainly had many features that made it an enviable vessel, none of the three criteria or objectives were met. So we do need to do better with the next generation of submarines. Nobody would take anything away from the excellence of the captains and crew of our Collins class submarines. As you know, Mr Acting Deputy President Williams, they are based at HMAS Stirling south of Perth. We interact often and frequently.

Part of the urgency motion today speaks about the government planning to destroy Australia's strategically vital shipbuilding industry. In the last few moments of my contribution I want to speak more generally about that strategically vital shipbuilding industry. Under the Abbott government and with Senator David Johnston as the defence minister, a man who has done an enormous amount of research into this, and with the input of people like Senator David Fawcett and others on our side we are getting this whole issue under control.

The minister has said in this place that his first priority is the air warfare destroyer program because it went so badly off the rails with the last Labor government. He wants to ensure that everything is in place for a continued naval shipbuilding industry in this country. That is one of our very strong objectives. He has already been speaking to state premiers and ministers to get their cooperation. As I mentioned, the 2015 Defence white paper will shape the decision making, support the strategic and capability needs of Defence, deliver value for money, build commercial confidence and promote global best practice. Of course we are going to need full cooperation from the unions, employee groups, the Australian defence business industry and the Royal Institution of Naval Architects, to name just a few, to put the wrongs right.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

Before I commence my contribution to this important matter of urgency debate today I would like to acknowledge that this week the parliament is hosting participants in the Australian Defence Force Parliamentary Program. It is a wonderful opportunity for all senators and members to have someone from the Australian Defence Force work with them for a week. I am very privileged indeed to have Lieutenant Commander Steven McCracken from the Australian Navy tracking me around this building and assisting me in understanding more about Defence, Defence personnel and what they do for our country.

I have been privileged to serve in this Senate chamber with Liberal senators who stood up for South Australia and fought very hard to bring defence industries to South Australia and to keep defence industries in South Australia. I am talking about former Senators Hill, Minchin and Vanstone. I certainly did not agree with them on a lot of things, but I agree with their passion for Defence in South Australia. No doubt, they had to stare down their cabinet colleagues and occasionally a Prime Minister to ensure that South Australia was part of Team Australia. Now we have a Prime Minister who talks about Team Australia but clearly leaves South Australia right out of the team. Who do we have now in the Senate chamber standing up for South Australia? Certainly lots of senators on this side of the chamber. Senator Wong, Senator Gallacher and I are standing up for South Australia.

We had a contribution earlier in this debate from Senator Edwards, which I have to say was completely farcical. I am not sure how many times he mentioned submarines in his speech about submarines—not very often. He talked a lot about roads and other things. He very rarely turned his attention to the critical matter of the future of defence shipbuilding and the future submarine project to our home state of South Australia. I do not agree with all of what Senator David Fawcett said, but at least his contribution was considered and thoughtful and he has some view of the future.

Senators Birmingham, Bernardi and Ruston have been no-shows in this debate. Where are they? Indeed, where is the state Liberal leader, Steven Marshall, in this debate? Steven Marshall was quite prepared to stand with the Minister for Defence, Senator David Johnston, last year before the election and swear solemnly that they would commit to building the 12 future submarines in my home state of South Australia at the Australian Submarine Corporation. But now, like the minister, Steven Marshall is running away from that commitment. They promised the people of South Australia one thing before the election and immediately after the election they reneged on that commitment and are walking away from the 27,000 people in South Australia who are employed in defence industries. It was the same Senator Johnston, the now Minister for Defence, who before the federal election told us how fired up he got when people questioned the ability of Australians to continue to supply defence platforms. He said on 9 August 2013:

I get really fired up when I find us giving away our manufacturing base in the Defence space to foreign manufacturers, it’s just not on.

That is what the then opposition spokesperson for defence said before the federal election. What do we find out now after the federal election? There are sneaky visits of Japanese submarine builders to the Australian Submarine Corporation in South Australia. Undoubtedly there are negotiations between the now defence minister and those submarine providers from overseas about the future submarine project. He is not hot under the collar now. He is not standing up for South Australian defence manufacturing now. He is cosying up to another country and is planning to outsource the building and the design of 12 Australian submarines, which are integral to the future of defence shipbuilding and shipbuilding generally in my home state of South Australia.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Have you ever been down there?

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

I am devastated to think that this promise that was made by the Liberal government before the election is now going to be reneged on by people like you, Senator Bernardi, because Liberal senators in this place have clearly been rolled by their cabinet colleagues. They have not got the guts to stand up to the Prime Minister and say, 'What are you going to do for South Australia?' You have not got the guts. You are all so frightened of your own shadow and you are all so ambitious that you do not want to upset the Prime Minister.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I'm ambitious!

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

We know your ambitions are finished, Senator Bernardi, but the rest of them are gutless wonders.

It is a tragedy for my home state of South Australia that this crucial Defence shipbuilding industry is now going to be ignored and walked away from in favour of submarines being built somewhere else—not by South Australians, Senator Bernardi, probably by overseas workers. The future of Defence shipbuilding is absolutely integral to the economy of South Australia. If those Liberal senators over there do not understand it, then they should get up out of their seats, resign their positions and give them to those who will stand up for South Australia.

Question agreed to.