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

I move:

That the Senate take note of the answers given to opposition questions by the Minister for Defence.

What we see here today in the chamber is that this government and this minister are not content with lying to the Australian people and in particular to South Australians before the election; they are continuing to lie about that broken promise after the election.

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

Mr Deputy President, on a point of order: the honourable Leader of the Opposition has made the direct allegation that the Minister Johnston has lied and that needs to be withdrawn, as she well knows.

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

Senator Wong?

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

I will withdraw 'lie' and replace it with 'mislead'. That is because before the election this member told South Australians that this government, were they to be elected, would build the submarines in Adelaide. Yet today and every day we see him confecting excuses to walk away from that promise. The important point for today is as this, as I said: they are not content with misleading South Australians before the election, because this government, this Prime Minister and this minister are intent upon confecting excuse after excuse to try to justify a broken promise.

Let us go through some of the excuses which this government has put forward for their broken promise. First, they said that an off-the-shelf submarine would be better and cheaper. The evidence to the Senate committee—which is not from Labor Party people and not from the South Australian government, but from experts in the field—has said very clearly that an off-the-shelf submarine does not have the capability, does not have the range and cannot do the job that the Australian Navy needs. One excuse hits the wall.

Second, the government says that we do not have the skills here in Australia to build the submarines. Again, there is evidence before the Senate committee. Also, we know that we have great shipbuilders here in Australia and a great and highly skilled workforce, who have been denigrated consistently by this government. But important evidence before the Senate committee said very clearly that we do have the skills to build the submarines here in Australia.

The third confected excuse to try to justify Prime Minister Tony Abbott walking away from the promise to South Australians is cost. What we have is the government softening people up by backgrounding the media with inflated costs for an onshore build. At the Senate inquiry I attended in Adelaide, Mr Hamilton-Smith got it right when he said that people were being softened up for a broken promise. We had figures such as $50 to $80 billion been quietly backgrounded to the media by the government in an attempt to suggest that an onshore build would be too expensive. That excuse has been demolished as well by public statements by shipbuilders, including the shipbuilder TKMSA in Australia, about whom Senator Conroy spoke in his question. They stated they could deliver 12 submarines that met Australian requirements for $20 billion with the price including all the programmatic aspects to deliver the submarines in Australia.

That the final excuse that they have returned to is in fact on a capability gap in terms of the timing of the delivery of submarines. The minister has been trying to suggest that is actually the reason. It is not a broken promise and it is not all the other reasons which have been demolished. Actually, it is the timing reason. Let us remember who has said that the minister is wrong: Dr John White, naval shipbuilding expert and co-author of the Winter review that the minister commissioned. He said:

There is still sufficient time available, with adequate contingency, for the competitive project design study to be carried out and to build the future submarines in Australia.

Commodore Paul Greenfield said:

… there does not have to be a capability gap if we get on with it now.

That evidence was given on 30 September.

Finally, Rear Admiral Peter Briggs, the former submarine commander and head of the new submarine capability team, said:

Our strong recommendation is that we get bids from all four potential contenders and make a sensible, informed choice at that point and that we get on with it …

In other words, we should go to an open tender process—a proper tender process.

Every excuse that this government has put up for breaking their promise has been demolished by the experts in the Senate committee. And the only thing that South Australians can conclude by observing this minister's answer today and every day is that this is a government confecting excuses—putting up excuses which are flimsy, misleading and untrue—in an attempt to avoid responsibility for yet another broken promise. (Time expired)

Simon Birmingham (SA, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

If it were all as straightforward and rosy as Senator Wong makes out, you would have to wonder why there was not a defence submarine contract in place when the change of government took place. If it were all as straightforward and rosy as Senator Wong suggests, you would have to wonder why there was not a settled submarine design in place when the change of government took place. If it were all as rosy as Senator Wong and Senator Conroy point out, you would have to wonder why Labor's 2007 promise to build submarines and to start work in 2007 went unactioned for six long years. There were six years of inaction.

I do not like to come into this chamber and give Senator Conroy any credit for anything but—do you know what?—more work went into the design of the national broadband network than went into the design of the next generation of Australian submarines. There was more work on that napkin on the RAAF VIP plane, when the NBN was designed, than there was for Australia's future submarines.

The Labor Party come into this chamber today and tried to suggest, as they have done consistently, that there has been 12 wasted months—as I think I heard Senator Conroy shout out at during question time—

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

Twelve wasted months.

Simon Birmingham (SA, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

There he goes again! There were six wasted years, Senator Conroy—six years in which you did nothing. Not only did you not progress things during those six years, you took them backwards. By 2012-13 you had managed to drop the nation's share of defence spending to its lowest level since 1938. You cut the defence budget by the single largest amount—10.5 per cent—since the end of the Korean War. Following your 2009 white paper you cut or deferred some $16 billion. All up, your decisions led to 119 defence projects being delayed, 43 projects being reduced and eight projects being cancelled.

But, worst of all, Labor actually took more than $20 billion out of the forward projections for the future submarine program. That is what they did.

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

Dear oh dear!

Simon Birmingham (SA, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

He can protest all he wants. He can complain all he wants, but the facts speak for themselves. Nothing was done in six years. No contracts were signed. No design was settled upon, and the budget was stripped bare.

We went to the last election with something the Labor Party did not have—an actual policy for defence. Senator Conroy and Senator Gallacher—if he is going to speak—are welcome to quote from Labor's defence policy if they like. But there was not one for the last election. It was blank—as blank as their actions in the preceding six years. Our policy made it very clear that we will make the decisions necessary to ensure that Australia has no submarine capability gap within 18 months of the election. That is exactly what we will do.

We will also ensure that the work on the replacement of the current submarine fleet will centre around the South Australian shipyards. That is exactly what we will do. We have made it clear that there will be more jobs in South Australia in future as a result of our government's commitment to follow through on delivering more submarines for the future.

Labor talked about more submarines for six years, and did absolutely nothing. By the time of the next election we will have settled on designs, we will have progressed under contracts, and we will be in a position where we can identify that there will be more jobs for South Australia. So, rather than the fear campaign that keeps being waged by those opposite—rather than wanting to scare people into believing that doom and gloom is around the corner—our comment is clear: there will be more jobs. There will be more jobs in South Australia. We will make the decisions that Labor failed to make for six years. We will budget to deliver on those decisions, although Labor stripped the budget bare.

We will make sure that we look after the interests of our defence force, the interests of Australian taxpayers, and that we deliver jobs for the future. Unlike those opposite, who have nothing to stand on, I promise you that by the time of the next election there will be clear evidence that South Australia's defence industry is secure in the future—far more than it was under those opposite.

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

The tired, old lies being told by this government have not defended the government on the issue of submarines for the last three months, and they certainly will not get them through the next three months. They can keep trotting out the statement that we did nothing, even when, in estimates, it was agreed that $200 million was set aside and $70 million has actually been spent on the design and the whole process—they can go through all of that—but what is at stake here is the honesty of Mr Abbott and Senator Johnston. They stood in front of the gates of the ASC and said that they would build 12 subs in Adelaide. I have stood right there—in exactly the same spot. I have even shown the Senate the video of Senator Johnston making that promise before the last election.

Where did they start? The government backgrounded all of the media, saying that the Japanese submarine was much better than the Australian submarine on what we were thinking of. Unfortunately, every expert in Australia who knows anything about submarines turned up at a Senate committee to say, 'That's just not true.' Rear Admiral Peter Briggs, one of Australia's pre-eminent submariners, said:

Proposing that you go and buy an off the shelf submarine with a 6,000 mile range, it’s worse than a waste of money, it’s an illusion.

The experts told us that the government's fantasy about buying existing Japanese submarines was an illusion. That is what the experts said, so the government said, 'Oh dear. That one has hit the fence. Let's move on. Cost!' The next backgrounding the government did of all the media was to say it would cost between $50 billion and $80 billion to build the subs here in Australia. What did the experts queue up at the Senate committee to tell us? What did the companies say? The experts at TKMS wrote a letter to the government to try to head off this shonky decision to hand the submarine contract to the Japanese. They said that they could build 12 new submarines in Australia for $20 billion—not the $50 billion to $80 billion advanced by the government but $20 billion. So, when it comes to their excuses, just do not believe the government's lies.

Then the government started going around the country saying, 'We've missed out on how good the Japanese subs were and we've missed out on the cost, because none of that's true. Skills! Australia doesn't have the skills to build submarines.' Well, unfortunately, what did the experts say about that? BAE, the shipbuilders involved in the AWD project, who had to listen to the government make claims about 150 gross man hours per tonne as a productivity rate, say that they are achieving a productivity rate of 76 gross man hours per tonne. But today, yet again the minister stands up and says that Australia, based on the AWD, does not have the skills and cannot get the productivity. Do not let the evidence get in the way of the answers from the Minister for Defence in this chamber!

There is the tender process. Now they are claiming we do not have time because the Collins subs will retire before we will finish building the subs. What does the pre-eminent leading naval shipbuilding expert in this country, Dr John White, say? He is so good that Senator Johnston just received a report that he hired him to write on Australia's shipbuilding industry. What does he say? He says:

There is still sufficient time available, with adequate contingency, for the competitive project design study to be carried out and to build the future submarines in Australia …

Every excuse to break the promise— (Time expired)

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I want to follow on from the comments that Senator Birmingham made. I think he was onto something when he was comparing the inaction on the submarines while Labor were last in government to what they were doing on the NBN. They did spend billions of dollars on the NBN and we all saw the results of that—not much service to people and nothing rolled out, but lots of money spent. We saw no planning on the NBN. After reflecting on hearing Senator Conroy, who is now in charge of the submarine in a shadow capacity for the Labor Party, I thought, 'What would be more frightening? Having a Labor government do nothing on submarines or having Senator Conroy doing a lot? What would be more frightening for us as a nation?' We all saw the results for the NBN when the Labor Party tried to spend billions of dollars, did nothing and wasted money in convoluted contracts, when they clearly did not have a commercial bone in their body in order to sign something which will protect the interests of this nation.

We just saw an example of that. The shadow defence minister of our nation would like to take, as somehow almost tendered documents, statements made on a radio station by a European submarine builder, which are apparently evidence enough of what the budget should be. If this is how the Labor Party put their budgets together in government, maybe it starts to explain a lot about why our budget is blowing out and why they could never hit a deficit target in their whole period in government.

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

This is about submarines!

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Apparently, it is okay, Senator Gallacher, for us to say that a company has said something on the radio, so it must be a fact. Because someone has said in a radio interview that they could build something for $20 billion, that is now an established fact. That is not the process we are going to take in government. We are not going to rely on evidence from a radio transcript in a $20 billion decision for this nation. The decision is about the defence interests of our nation and will have decade-long consequences on how we can defend our nation.

The approach that we take when we are going to spend that sort of money, when we make a decision that will be about protecting the interests of our children and grandchildren in this nation, is to take the best evidence from the Department of Defence. They have the experts who are independent and are not working for particular companies—not that there is anything wrong with that, but everybody of course has their own barrow to push. We need to rely on independent evidence, and that is what this government is doing. We will not be cherry-picking evidence provided by particular people. We will be properly testing it through the process that the Labor Party also used on defence decisions when they were in government. It will be a two-pass process: there will be a first-pass process to go to cabinet and a second-pass process when more due diligence is done. That is what will happen and that will lead to better decisions by our government.

I was also listening to Senator Wong. She said that we do have the skills here in this nation to build a submarine. I have been to some of the Senate committee hearings—I am a member of the Senate economics committee—and I cannot think of one witness who thought that we can build a submarine alone in this nation. That cannot happen. It did not happen with the Collins class submarines; it is not happening with the air warfare destroyers. We will have to rely on expertise in other countries. Everyone recognises that. The Collins class was a multicultural submarine. It was made up of Swedish design, a US combat system and French propulsion. We will have to do the same with any decision we make in the future. It cannot all be done here, but there will still be plenty of work done in Australia, particularly in Adelaide, as the minister has outlined.

I want to finish with some evidence that was also presented at one of these Senate committee hearings. It was from Mr Glenn Thompson, who is the Assistant National Secretary of the Australian Workers Union. He put in his submission that the project to replace the HMAS Success, which has just been re-contracted, should have been approved and announced many years ago. I put that to him and said, 'I presume that this means it should have been done more than one year ago.' Mr Thompson replied, 'Absolutely.' So here we have the assistant national secretary of the AWU saying that the Labor Party should have made that decision years ago on that ship, and their own union bodies are damning them for their inaction. The reason that we are in this plot right now is that Labor had six years to do something on this and did nothing.

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

I rise on the motion to take note of answers by Senator Johnston to questions by Senator Wong and Senator Conroy. It was really pleasing that Senator Birmingham broke his self-imposed exile and contributed to the debate. He has been conspicuously absent in this debate right throughout. But, as normal, his pedigree came to the fore. If you check his resume, Mr Deputy President—I am not sure that you have ever bothered to do that—you will find that his experience in life is restricted to political office as an adviser and the like. Real-world experience is not all that prominent on his resume, so he did what he was expected to do as a professional politician: he put his hand in his pocket, went on the stump, prevaricated and introduced other topics of no relevance to the critical matter at hand.

You cannot move in South Australia without realising this is a widely-held and deeply-felt subject. Of the number of telephone calls over a few short weeks from constituents to my office—I stress these were not from Labor held constituencies—70.5 per cent indicated that they wanted the submarines built in South Australia; 2.1 per cent indicated that they did not want the submarines built in South Australia; and 27.4 per cent had no view. This is a widely-held and deeply-felt important issue. As Senator Wong correctly put it, the minister has ignored the experts, is misleading the public and is breaking a promise.

The first point of misleading was when he introduced the AWD project, which he said was several hundred million dollars over budget, but he ignored the fact that the Audit Office produced a very comprehensive report. Part of the reason for those overruns was:

Immaturity in the detailed design documentation provided by Navantia, predominantly associated with drawing errors or omissions, contract amendments and late Vendor Furnished Information.

This resulted in 'an average of 2.75 revisions per drawing' and led to:

… costly and out-of-sequence rework in cases where construction work already undertaken no longer matched the design.

So I will not cop the workforce there being denigrated by anyone—particularly not this minister saying that they lack productivity. When asked, the Defence Materiel Organisation CEO said that there is 'no lack of productivity' from the workforce. It is 'costly rework' that is driving this loss of productivity on the project. That does not fall within the remit of the people who turn up there every day to do their job—and do it in a damn good way and in a very efficient manner.

As I said, Senator Birmingham has come out of his self-imposed exile, but let us look at what has happened with the other Liberal senators in the recent weeks. One South Australian senator broke ranks. My good colleague Senator Edwards, deputy chair of the economics committee, has said the project should go out to open tender. Locking Australia out of the process was like 'not inviting an uncle to a wedding'. Senator Edwards has stepped up and is backing submarines in South Australia. Senator Fawcett has been eminently on the record right throughout this and has had to correct an erroneous report of his position, but he has been, very clearly, on the case and on the job in South Australia. Now I go to Senator Ruston. Senator Anne Ruston said that the government should consider the evidence from expert witnesses. That is not criticism from Senator Wong or Senator Conroy. That is criticism from Senator Ruston. The government should consider the evidence of expert witnesses. It is a bit of free advice to her own government. Then we have the member for Hindmarsh, a Liberal MP, lobbying the PM for the local submarines bill. It is very clear that widely-held, deeply-felt community sentiment in South Australia says: 'Don't break a promise, build the subs here, make them in Australia, manufacture them in Adelaide and keep people in work.' It is a very clear sentiment that I endorse.

Question agreed to.