Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

My question is to the Minister for Defence and relates to the Future Frigate Program. In June 2018, the Type 26 was announced as the basis for what we now know as the Hunter class frigate, with claims of large-scale job creation, work for Australian industry and a schedule that was fundamental to establishing the naval shipbuilding program. Real Australian suppliers, as opposed to local shopfronts for foreign industry, remain of the view that the opportunities they expected to be able to compete for are being pushed to BAE Systems' standard suppliers in the UK and shopfronts here. What action is the government taking to ensure all Australian owned and controlled suppliers are being offered full and fair access to work packages for the project?

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

I thank Senator Patrick for the question, and I also thank him for the courtesy of prior notice, particularly in the circumstances. More than 1,300 Australian companies have prequalified for inclusion in the BAE Systems Maritime Australia Hunter project supply chain. We already have contracts with BlueScope for Australian steel. Here are just some of the great Australian businesses working on the Hunter: Indigenous business TQCSI-Yaran; InfraBuild Steel Centre; APS Adelaide Profile Services; Intertek Adelaide Inspection Services; and MG Engineering.

The Hunter class frigate program will achieve a minimum of 58 per cent Australian industry content, with a target Australian industry content of over 60 per cent. This means Australian jobs, skills and growing our sovereign industrial capability. There are already over a thousand Australians working on the Hunter class frigate program, which will grow to 2,200 at the program's peak in the late 2020s. As design of the Hunter progresses, even more work packages will be released to Australian industry in both the build and sustainment phases. Already companies such as Voxon Photonics have won work with BAE Systems to support naval research in Australia and in the UK. But, of course, our targets for Australian industry content are not set-and-forget. We are maximising Australian industry content across naval shipbuilding and have established a robust Australian industry assurance program to ensure that Australian businesses are afforded every possible opportunity.

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

Senator Patrick, a supplementary question?

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

The government mandated the use of Australian steel in the Hunter class project—a very good decision—so mandating clearly can be done. What criteria must be met for the government to stand and intervene in respect of utilisation of non-shopfront real Australian company industry capability?

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

Thank you, Senator Patrick, for the question. I'm incredibly proud to be part of a government that is unashamedly backing Australian industry. In 2013 this government took a stand to rebuild our Australian naval shipbuilding industry. In the 2020 Force structure plan we committed to build more than 70 naval vessels right here in Australia. A key part of strengthening our sovereign industrial base will involve working with trusted partners and suppliers, particularly where Australia is growing and developing capability. Our collaboration with international suppliers is helping build Australian capacity and also our sovereign capability. These companies are establishing uniquely Australian subsidiaries that are doing a number of things, including transferring skills and know-how to Australia, employing thousands and thousands of Australians, and exporting Australian-built cutting-edge capability to the world.

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

Senator Patrick, a final supplementary question?

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Despite the project having an underspend, which can be an indication that things aren't progressing as quickly as possible, at budget estimates last year the minister and department officials advised that the project was proceeding according to schedule. Can the minister confirm that the Hunter project is proceeding to plan and remains on schedule, both in respect of past milestones and immediately pending milestones? Can you advise on what basis that assessment is made?

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

Senator Patrick, you will be glad to know that the answer is yes. The Hunter class frigate project remains on track to meet government and Navy requirements. Design activities are well underway, and we commenced prototyping in December 2020 on time and as planned. The next design milestone—system definition review—will occur between March and November next year. We remain on track to cut steel in 2022.