Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Defence, Senator Reynolds. Last night the minister released a statement saying that she had received an undertaking from Naval Group that at least 60 per cent of the contract value of the future submarines build will be spent in Australia. What is the legal basis of the undertaking?

Linda Reynolds (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

I thank the senator for that question and, yes, I can confirm that I've been having ongoing discussions with my French counterpart Florence Parly to ensure that Naval Group delivers not only on cost and on schedule but also for Australian industry capability and content. We have had ongoing discussions and, as I reported back to the Senate per my release, we have agreed on a minimum of 60 per cent Australian industry content. There were very strict guidelines in the agreement we had with France for contracted arrangements, but there wasn't a specific number. That is what I have now negotiated with the French government, and also Naval Group, to ensure that we have a minimum of 60 per cent.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Marielle Smith, a supplementary question?

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

At last night's Senate hearing, Naval Group revealed it would not make any contractual commitment to a local content target for another two years. Given former Minister for Defence Mr Pyne repeatedly asserted that 90 per cent of the build of the future submarines would occur in Australia saying, 'Less than 10 per cent of the work will be done outside Australia,' how is this undertaking now received by the minister any different to that received by Mr Pyne?

Linda Reynolds (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

First of all, nowhere in the contract is a 90 per cent figure mentioned.

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

So Chris was lying?

Linda Reynolds (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

Of course he wasn't. Of course he was not.

Opposition senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

Order! Senator Reynolds will continue when there's silence.

Linda Reynolds (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

As I've said, I welcomed the commitment for 60 per cent, but it is very important to remember the stage that this project is up to. The project is still in the design phase. Even in the design phase, we've had many expressions of interest. We've had 1,500 expressions of interest, and several thousand companies are looking to work with Naval Group.

However, as those opposite would know, when you are designing your house or any other property, if you are still in the design phase you do not go out and get commitments and contracts to deliver supplies before you actually know what you want. At the moment, we are in the design phase of this project. Naval Group will start going out and looking at contracts in 2023. (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Marielle Smith, a final supplementary question?

Marielle Smith (SA, Australian Labor Party) Share this | Link to this | Hansard source

Yesterday the minister criticised Labor's strong advocacy on behalf of Australian defence workers and businesses, saying, 'Those opposite harp on about local content.' Can the Minister explain how advocating on behalf of Australian workers and businesses can be described as 'harping on'?

Linda Reynolds (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

I thank the senator for that question. I have to say I think I've just heard the definition of hypocrisy. You would have far more credibility if those on that side of the chamber when in government had commissioned a single Australian built ship. They commissioned zero. Zero per cent of 100 per cent is still zero. They caused the valley of death which we have fixed through our national naval shipbuilding project. So please don't come and lecture us when you have no credibility whatsoever on shipbuilding.