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

My question is also to the Minister for Defence, Senator Johnston.

Opposition Senators:

Opposition senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Order!

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

Would the minister update the Senate on the progress of the air warfare destroyer program, which was running more than $350 million over budget and 21 months behind schedule under the watch of the former finance minister, Senator Wong.

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

I thank Senator Bernardi for his support and interest in the Defence portfolio. When we came into government we faced a potentially critical problem with the air warfare destroyer program.

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

Release the Winter report!

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Conroy!

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

As Senator Bernardi has quite rightly said, it was running 21 months late and $360 million over its target cost; and that was about midway through the construction of ship one. Labor failed in its duty to deliver naval capability. Issues were put in the too-hard basket, just as I have indicated over so many weeks with the future submarine project. So yet another challenge was left to this government, and more particularly Defence—to me—to fix. We all want a viable local shipbuilding industry; I think that is a given. People are supportive of our defence industry, but they do expect and demand value for money. The air warfare destroyer program must be recovered, and the Abbott government has a plan to do this. Minister Cormann and I commissioned the Winter review to get to the bottom of what was wrong with the program. The overall intention is to get industry to the type of productivity we were able to demonstrate through the Anzac frigate build program. Our advisers are working hard behind the scenes with ASC and the other industry players to transform this program from the problem that it was. It has been an enormous challenge.

Senator Conroy interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Conroy, you will have an opportunity later to ask questions.

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

And yes, we have been frustrated. But I am very pleased to say that through our combined efforts we are beginning to see the types of green shoots that our program was designed to produce. Ship one has been consolidated and is being fitted out ready for launch next year. Ship two is well into construction and has improved in terms of productivity, not cost, by 30 per cent. Ship three's blocks are now under construction. If this keeps up we may have a shipbuilding industry in Australia.

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

Mr President, I ask a supplementary question. I would ask the minister to inform the Senate of what other actions the government is taking to support Australia's important shipbuilding industry.

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

Again, I thank Senator Bernardi for the question. As you know, I have been a strong advocate for maintaining shipbuilding in Australia. Indeed, there is a Senate report from about 2006 that sets that out. Unlike Labor, the government's interest has been in action rather than rhetoric; in decisions, not doorstops. The government has funded $78.2 million—remember we have only spent $60 million of the $214 million for submarines—and work is now underway to bring forward preliminary engineering and design deliverables that help us to understand how to build future frigates in Australia—in South Australia. This will focus on the continued production of the current AWD hull using cutting-edge Australian companies, including our own indigenous radar electronic system. In parallel, the government is reviewing Australia's shipbuilding requirements, capabilities and capacities in order to inform a long-term strategic plan.

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

Mr President, I ask a further supplementary question. Could the minister advise the Senate of how the government's support of Australian shipbuilding compares with the record of its predecessors?

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

Again, I thank Senator Bernardi for the question. In August 2007 the then opposition leader, Kevin Rudd, said that (1) a Labor government would ensure that submarines were built by ASC and (2) construction would begin in about 2017. And then he said: 'Starting the process this year'—2007—'will guarantee continuity of work for South Australia's defence industry.' But, as we all know, absolutely nothing was done. Gee—that sounds a bit like a broken promise, I would have thought. Instead, they took $20 billion out of the future submarine program. When I became Defence minister I was immediately advised that Navy faced a capability gap because nothing had been done.

Senator Conroy interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Conroy!

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

You would think, given the bleating now, that they would have been interested in at least writing a contract. But no. Under Senator Wong's watch the program for AWD— (Time expired)