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

My question is to the Minister for Finance in his capacity as the sole shareholder minister in ASC Pty Ltd. I note the ASC is a government business enterprise which operates in accordance with the Commonwealth's business enterprise governance and oversight guidelines, which include:

A principal objective for each GBE is that it adds to its shareholder value.

With a full workload and greater efficiency with respect to the build costs of the Air Warfare Destroyer ships 2 and 3 in the 2014-15 financial year, and improved profits in that year of $21.9 million, what was the shareholder value of ASC Pty Ltd, taking into account the value of its wholly owned subsidiary, ASC Shipbuilding Pty Ltd?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Xenophon for that question. The financial valuation of ASC is commercially sensitive and, as such, not something that I can publicly disclose, which is precisely the answer that former finance minister Senator Wong gave me when I asked her a similar question about the financial valuation of Medibank Private, from opposition. For further information, though, in relation to the financial performance of ASC, I am pleased to table the ASC's 2015 annual report for the information of Senator Xenophon.

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

Mr President, I ask a supplementary question. Given the government has not yet signed any shipbuilding contracts and, by 2018, ASC Shipbuilding will have no ships on its books—and, by ASC's own estimates evidence, only 100 staff will be left in that entity by the end of 2018—does the government concede that that will diminish the value of ASC?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

The future evaluation of ASC is, self-evidently, a function of its future performance. But, during the most recent financial year, ASC recorded an after-tax profit of $21.9 million, which was a material improvement on the performance in the previous financial year and which was the result of significant productivity improvements. We look forward to ASC continuing to improve its performance moving forward.

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

Mr President, I ask a further supplementary question. Can the minister confirm whether at least the first two OPVs will be built by ASC, as promised by then Prime Minister Abbott on 21 August 2015? Will the minister advise how much of the $89 billion of naval shipbuilding, announced on 4 August 2015, will actually go to the ASC? Does the minister concede the value of this government business enterprise is tied to the extent and value of its naval shipbuilding contracts?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

As I have indicated to Senator Xenophon during Senate estimates, the relevant procurement of relevant Defence assets is appropriately and entirely a matter for the Defence portfolio and for the Minister for Defence, my good friend and valued colleague Senator Payne. The government's naval shipbuilding plan, of course, and the record investment into our defence capability allocated in the 2016 defence white paper, do provide significant opportunities for ASC to gain further shipbuilding work into the future. But my role as the shareholder minister—

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

Pause the clock. Order, Minister.

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

Mr President, I rise on a point of order on relevance. A direct question was asked in relation to whether the first two OPVs will be built by ASC, as promised by Prime Minister Abbott.

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

The minister did, up-front in his answer, indicate that he has already informed you on a previous occasion that the matter would be best directed to the Minister for Defence, so I believe that he was being directly relevant to your answer. I will allow the minister to continue.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Senator Xenophon, in his primary question, actually pointed out that I am the sole shareholder minister for ASC. As such, I am the shareholder minister for one of the potential suppliers in relation to a range of procurements that the Defence portfolio is currently undertaking and will undertake into the future. As such, obviously my answers are provided in that context. (Time expired)