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

I move:

That the Senate take note of the answer given by the Minister for Employment (Senator Abetz) to a question without notice asked by Senator Conroy today relating to the manufacture of the next fleet of Australian submarines.

Today Labor has extended the hand of bipartisanship to the government on submarines. As we all know, this decision will transcend governments and generations. It is one of the most important defence capability decisions that our country will ever make. Prior to the 2013 election, there was bipartisan support for the future of the submarine project—genuine bipartisan support. That promise was to build our future submarines in Australia. But, since coming to government, the Prime Minister has been crab-walking away from that promise. It is an open secret. Even Senator Edwards must know by now that the Prime Minister, Mr Abbott, has a handshake deal with Japan to build our new submarines. It is also clear that, to save his own job, he traded submarines for votes in the Liberal party room. To win those votes, the government has announced a sham competitive evaluation process. But be in no doubt, Senator Edwards and those opposite: this process is being retrofitted to still deliver the Prime Minister his captain's pick for having the submarines built in Japan.

The dysfunction and chaos within the Liberal Party is infecting the submarine decision. Senator Abetz may not be in the NSC—I am not sure—but if he was in the NSC, he was one of the ministers who sat there when they went around the table last October with officials and ministers—and I hope Senator Edwards is listening—and said 'yes' or 'no', 'deal with Japan', 'no tender', 'build in Japan', and 'we announce it with Prime Minister Abe in November at G20'. So, Senator Abetz, if you were a member of the NSC, you know that is the truth. And I accept that if you were not, you may not have been privy to it, because they did not want to bring it to cabinet. But they drew up the press releases in the Department of Defence. They drew them up for an announcement in November of this year. So poor Senator Edwards was sitting there last year being treated like a mushroom by his own frontbench, by his own ministers on the NSC. He was treated like a mushroom, just like every other person in South Australia.

That is why we offer the opportunity today; we reach out and we say that we have outlined a fair and proper process to deliver the best submarine for Australia at the most effective price for taxpayers. The key criterion is to ensure that future submarines are built in Australia. This is a return to the bipartisanship that we saw before the elections.

We are not the only political party offering such a deal. The conservative British Prime Minister David Cameron recognises how important it is for the United Kingdom to build and maintain its own warships. Under Labor's process we would include France, Germany, Japan and Sweden in the competitive tender. We would ensure that the final bids guarantee submarine performance and Australian ownership of all intellectual property.

This is the test for new today: in your five-minute contribution, Senator Edwards, will you make a commitment that the next generation of submarines is built, maintained and sustained in Australia? All you are being asked to do today is to be bipartisan. Build them, maintain them and sustained them here in Australia or are you going to cave-in to the captain's pick again—(Time expired)

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

What a disingenuous rant that was! Let me talk to you about crab-walking. Where was Senator Conroy—when he was in cabinet—when he was crab-walking from Defence Minister Fitzgibbon? Where was he when Minister Faulkner was crab-walking from the issue of the submarine build?

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

Not on the NSC.

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

Where were you, Senator Conroy, when Minister Smith did the same? There were three defence ministers in six years in the Defence portfolio. How trite of you to come in here and accuse us of inaction in building submarines, when you sucked $16.3 billion out of the Defence budget and left it in a complete vacuum. Senator Gallacher was down there that day, along with the other South Australian Senators when the Leader of the Opposition, Mr Shorten, did his big xenophobic rant on the back of a truck—

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

Mr Deputy President, I would like to point out that I was not there; I was in Tasmania.

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

That is better than being in South Australia.

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

I respect the interjection from Senator Gallacher, because I know that if he could have gone to a further place— if he could have got to Norfolk Island that day for a hearing—he probably would have. I know him to be a fair and reasonable person. I have worked with Senator Gallacher, and there is not an island far enough away that he could have found himself on that day. There was not a place he would not hidden that day to get away from the rant of the Leader of the Opposition, who was spruiking the Labor lines down there to the handful of fluoro-vested union spruikers, working up fear and loathing about the government.

We are actually doing something. Senator Conroy, I hope you are listening because it was only a few Fridays ago that the Abbott government dealt Australian shipbuilders into the largest defence procurement project in the Commonwealth's history. What a day that was! Now we have some action. Do you know what we have going on in Adelaide over the next couple of days? We have a submarine convention going on. When did we have one of those in the glorious days of submarine building in the Rudd-Gillard-Rudd reign that sucked the Defence budget dry? The light at the end of the tunnel is no longer a freight train, as it was when the Labor party was in power, it is now is a build.

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

A build in Japan!

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

Australian shipbuilders, if they get their act together, have the opportunity to build a submarine force that is world-class, as the Collins class was. Now they have an opportunity to do it. If the union movement came together, stopped protesting and sharpened their pencils to get together with management of ASC and other shipbuilders like Forgacs and Osborne. If they realised that, they would have a real shot at this. 'Do not waste a nanosecond' is my message to the union movement, which has been crying this opportunity but which has been ranting and raving—

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

You're building them in Japan.

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

Senator Conroy, I listen to them and I have heard the experts. That is why I have made the representations that I have and I stand behind them. But do not shrilly come in here, lecturing us about crab walking. It is absolute hypocrisy.

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

You have been treated like a mushroom.

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

I wish I had another five minutes. For almost 80 Defence acquisitions completed by Labor after July 2007, nearly 70 per cent were single-sourced procurements. So much for Labor's commitment to open tenders. If you were actually committed—(Time expired)

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

I would like to put on the record very early in the piece some comments that have been made around the Collins class submarine. Ian Mcphedran said:

In what has been regarded as one of the most incredible naval shipbuilding feats of the modern era, the first Swedish designed Collins class submarine, HMAS Collins was commissioned from a former greenfield site at Port Adelaide in July 1996, just nine years after the project began. The Collins class boats are extremely stealthy and have been known to sneak right under US aircraft carriers to photograph their keels.

So we have a very successful base here. We have world recognised technology efficiency and shipbuilding capability in these submarines. What we do not have, if I can use Senator Abetz's metaphor from his generous contribution to Senator Lundy yesterday, is people looking forward and telling the South Australian community that we need to do this build, design, sustain, maintain in Australia. We have to use his analogy—looking one way and doing another. That is exactly what this coalition government is doing—looking one way and saying: 'Nothing to see here, South Australian public. We will give you 500 jobs.' There was that debacle of a press conference where it came out that the minister was unable to describe what competitive evaluation was but said, 'Don't worry; there will be 500 jobs in it.'

We really need to go back and revisit some of the earlier contributions. When we questioned the Defence minister we were labelled incongruous and stupid. He then went on to say that the ASC could not build a canoe, when all of the evidence in South Australia with the supplement that has been read by thousands of South Australians this week is to the contrary.

What happened is our Prime Minister and the Prime Minister of Japan got together and did a deal. As Senator Conroy said, the National Security Committee ticked off on revoking the promise that we would build 12 submarines right here in Adelaide. That went out the window, and if you want to go into it deeper, Senator Cormann and the Hon. Joe Hockey said, 'Where are we going to save some more money? Slash and burn—who cares about South Australia?' They now have to revisit that because there is such widely-held and deeply-felt antagonism to this position put by this coalition government that people's seats are in jeopardy.

We know from the by-election results of Davenport and Fisher that people are prepared to change their mind about who they support on this issue. And why should we have Senator Birmingham touting programs of training and employer positions, which are all valuable, but there is never a word said about his own state? Never a word is said about ASC. Never a word is said about the small businesses, the people who need these opportunities in South Australia. Not a word is said about the destruction that the closure of Holden will cause in our northern suburbs. If we do not do this design, build and sustain in South Australia, it will be cumulative. He is out there announcing good programs but he is not at home defending his own state.

We know that the member for Hindmarsh is, at every opportunity, trying to defend himself in that electorate, which is a very marginal electorate. We know that Andrew Southcott is increasingly concerned and has fronted up behind any opportunity to get some profile in this argument. But unless they actually agree to what has been put to them today, they are going to pay extreme electoral pain. People in South Australia want it built. They want the promise honoured. The Labor Party has stepped up in a bipartisan way today as we always have with this project. There has always been bipartisan support. The Australian National Audit Office actually says that there is bipartisan support for this naval shipbuilding capability. And it must continue in South Australia. We will take this issue on for as long as it needs to be to win it. (Time expired)

James McGrath (Queensland, Liberal National Party) Share this | Link to this | Hansard source

It gives me pleasure to speak in this debate because I want to highlight that Labor were in power, allegedly, between 2007 and 2013. They were in power, they were in government, they were in ministerial leather but they were incapable of making a decision on the submarine fleet. Their failure to make a decision and their failure to think about the future defence needs of this country has risked a credibility gap between the ageing Collins fleet and the future submarines. Now Labor want to spend another five years on a tender process. It is rich of Labor, it is typically hypocritical of Labor to call for an open tender process given that back in 2007 Prime Minister Rudd said that Labor would bypass a tender process for submarines. Even Senator Conroy has conceded, in a masterclass in understatement regarding submarines, that it did not go as fast as everybody wanted. In fact, it did not go anywhere under Labor. They did nothing for six years while they were in-fighting amongst themselves.

In the Defence budget, Labor broke their commitment to guarantee an average of three per cent real growth in Defence spending to 2017-2018 and 2.2 per cent real growth to 2030 to fund the promises made in their 2009 Defence white paper. Defence spending under Labor fell to 1.56 per cent of GDP in 2012-13. This is the lowest level of Defence funding since 1938 and that was before the outbreak of the Second World War. They cut the budget for 2012-13 by 10½ per cent. That was the biggest cut to Defence spending since the Korean War. Now Labor come into this place and reach out with their alleged hand of bipartisanship. Actually, what they do is reach out with a hand of hypocrisy and a hand of insincerity in relation to the submarines. They want to talk about a fair and proper process—I was writing the words down while the Labor senators were speaking—and they want to talk about a fair deal for taxpayers. If you want to talk about a fair deal for taxpayers, we can talk about what Labor did in relation to debt. We can talk about what Labor left here on the ministerial desks and on the credit cards and in the savings accounts of Australians—that is, the huge debt that Labor left.

The independent Parliamentary Budget Office stated in mid-2014 that, without action, Australia's debt would grow at one of the fastest rates in the developed world. We are currently paying a billion dollars a month in interest payments. That is over $12 billion a year, for those senators opposite who are not very good at counting with their shoes on. That is enough to build a world-class teaching hospital in every capital city, enough to finish the duplication of the Pacific Highway and it is around half of the Defence budget. It is about the same amount as government spends on aged care. It is more than the cost of the Pharmaceutical Benefits Scheme. It is more than the cost of the National Disability Insurance Scheme. It is more than the cost of higher education spending.

So for Labor to come into the Senate and talk about what we are doing in relation to the submarines is disappointing and hypocritical, because we have to try and clean up the mess that Labor has left behind and ensure that we get the debt down so that we deliver better services for Australian taxpayers. We also need to deliver a submarine fleet that delivers value for taxpayers.

In terms of the acquisition strategy for future submarines we want to provide a pathway—based on a competitive evaluation process—which will maximise the involvement of Australian industry, while not compromising on capability, cost, schedule or risk. And Australia is going to need an international partner to deliver this program. France, Germany and Japan have all emerged as potential international partners, and they will be invited to participate in the competitive evaluation process that will assess their ability to partner with Australia to develop our future submarines.

As part of this evaluation process Defence will seek proposals from potential partners for pre-concept designs, options for designs built overseas or in Australia and/or a hybrid approach, and costs and schedules for each option. The future submarines program will involve an investment of around $50 billion over its full life, and it is very important that we deliver value for money for Australian taxpayers. That is what this government is going to do, rather than spitting out press releases for dirty, grubby politics, which is what Labor are currently doing.

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

I, too, would like to take note of the answers given today to Senator Conroy, which, once again, demonstrated the incredible mess that the coalition has got themselves into with regard to the future submarine project.

The government promised before the last federal election to build the 12 future submarines in my home state of South Australia, in Adelaide. We know they back flipped on that promise. We know that the hapless former defence minister slurred the Australian Submarine Corporation. And we know that the Prime Minister, Mr Abbott, has done a deal with Japan to give the work to that country without any sensible, transparent and accountable tender process.

It has been a saga of dreadful mishandling of the most important procurement process ever in the history of Australia. Today, I was very proud when the Leader of the Opposition, Bill Shorten, came out and offered an olive branch to the coalition—he offered a hand to the coalition—to get this most important procurement project right. We asked for their bipartisan support to put in place a decent, accountable process—an accountable process that would deliver for Australia and for South Australia the best possible, cost-effective submarines that are suitable for Australia's security. The process would guarantee the work is retained in Australia to build and to maintain those submarines and to ensure that we have the shipbuilding skills in Australia for the future.

The process that Labor put forward today in South Australia—in my home state—would commence with the four most prominent non-nuclear submarine designers from Germany, France, Japan and Sweden. It would be a 12- to 18-month process, involving a request for proposals, a project definition study and a request for tender, with a decision taken by the end of 2016 about where we would get the design for the submarine from. It is a concrete, clear, accountable, sensible process. It is the first time we have had on the table a real process to ensure that the submarines that we desperately need in this country are built and, most importantly, maintained in Australia.

It was disappointing that the coalition took barely any time to consider this very sensible bipartisan approach to them to fix this problem of the future submarine project. Almost immediately, the useless defence minister, Kevin Andrews, who was dumped into that position when he did not really want to be defence minister—

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

I rise on a point of order. If she is going to use those sorts of descriptions—

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

She has a name: Senator McEwen.

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

When there are male senators I say 'he' and when it is a female senator I say 'she'. If there is something offensive about that of course I withdraw that.

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

She has a name.

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

I assume 'hes' also have a name, Senator Wong. But that does not overcome the fact that if the senator wishes to use that sort of terminology she may as well abide by the standing orders and refer to the minister appropriately.

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

Senator McEwen, you need to refer to members or ministers in the other place by their correct titles.

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

Thank you Mr President, I will attempt to do so, when it is warranted.

As I was saying, what the Labor Party has put on the table today is a process that the coalition should sign-up to, because it is the most rational process. It is a reasonable process and one that will actually deliver. It was interesting that Senator Abetz had to take offence when I criticised the Minister for Defence. It just shows how rattled the coalition are by this whole process.

Many of those opposite were disappointed by Mr Abbott's captain's pick, which only came about in the context of a potential leadership spill. When his own job was threatened, Mr Abbott suddenly invented this process, and coerced the defence minister into supporting him in this so-called tender process, which was demonstrated again today by Minister for Defence, Mr Andrews, as a fig leaf for a decision that has already been made. It is a fig leaf for a decision that has already been made in a dodgy deal that the Prime Minister has stitched up with Japan, and which will dud this country, because there are no guarantees under that dodgy deal that this important work will be done in Australia, in my home state. There is no guarantee at all.

As a passionate South Australian, and a great fan of the Australian Submarine Corporation and a person determined to ensure that we have skilled manufacturing jobs in my home state of South Australia, I implore the coalition to put the past behind us and to join with Labor to ensure that this most important defence procurement project is delivered in Australia and guarantees jobs for Australians and guarantees the security of Australia into the future.

Question agreed to.