TRANSCRIPT: DOORSTOP – AUSTRALIAN SUBMARINE CORPORATION
TRANSCRIPTION: PROOF COPY E & OE
DATE: 6 May 2013
TOPICS: 2013 Defence White Paper.
STEPHEN SMITH: Thanks very much for coming. I'm very pleased to be back at ASC and Techport at Adelaide and obviously very pleased to be joined by the Premier.
I wanted to come to South Australia in the aftermath of the publication of the White Paper last week to make some remarks about our maritime capability, in particular, our submarines. There are a range of very important decisions in the White Paper which have implications for submarines, for our maritime surface vessels, and they have very positive implications for ASC, for Techport, and for Adelaide and South Australia.
Firstly, so far as submarines are concerns, when I was last here back in December of last year, I made the point that we were looking at basing our land based test propulsion system for the new Future Submarine Project here in Adelaide in Techport, and that decision has been confirmed by the White Paper.
So, that work will start now and so in the future as we do the detailed work on the Future Submarines project and again, the White Paper reconfirms, recommits to 12 new submarines to be assembled in South Australia, the work for the very important land based test propulsion system will occur here. There'll be some additional work on that system in Melbourne and Western Australia, but the bulk of the work will be here.
We've also announced in the White Paper that the four options which the Government was looking at, an off the shelf model for a future submarine, a modified off the shelf model, an evolved Collins design, or a brand new design has been now narrowed by the government.
We are now focusing only on two options; an evolved Collins or a whole new design. And because this is the submarine design centre and a key centre for submarine maintenance, all of that work will essentially occur here.
We have discounted a military off the shelf model so far as submarines is concerned because our analysis shows that it doesn't give Australia either the operational or the strategic reach that we need for our maritime country and maritime continent to patrol our northern and western approaches and to reach to the Indonesian archipelago.
So, we are focusing now on an evolved Collins or a wholly new design. The Collins Class submarine is the most capable, conventional submarine in the world at the moment and so to return to a military off the shelf model would see a capability less than the Collins.
The Collins, as you know, has had its difficulties, but we are very pleased that the work we've been doing in a concentrated way over the last two to three years is now seeing a Collins Class maintenance and sustainment in a much better position.
Today, for example, we've got two submarines in maintenance here. One submarine in maintenance in Stirling in Western Australia, but two available for operations and one actually in the water. So, of our six Collins Class submarines, we've got three which are available for operations. That's a substantial improvement on what was available when I first became the Defence Minister.
So far as surface vessels are concerned, the three Air Warfare Destroyer Projects - work on that will continue here in Techport until 2019 and in the meantime, the White Paper also announces to bring forward of consideration of the replacement for our two supply vessels or our replenishment vessels, HMAS Sirius and HMAS Success, and ASC and Techport will be able to put forward their options for that work. We've also announced the bring-forward of our patrol boats. So, both those pieces of work bringing forward from 2018 to consideration now.
All in all, the combination of the ongoing Collins Class maintenance, the land based test propulsion system here for the Future Submarines Project, the narrowing of the options to an evolved Collins or a brand new design, and the bring forward for our supply ship's consideration or replacement, the bring forward for our patrol boat for consideration for replacement, all of this is good news for Techport, good news for Adelaide, good new for South Australia.
One of the issues we've been grappling with what has been described as the Valley of Death so far as maritime and Navy ship building is concerned. A document published with the White Paper last week is the Future Submarine Industries Skills Plan. This maps out our Navy, Defence, Defence Materiel, and the defence industry can see a smoother flow of work to retain our skills in the maritime ship building industry. Whether that's the design and technical skills, or whether that's when the world has hit the metal.
And because this is such an important document for ASC, for Techport, for Adelaide, and South Australia, I'd like to present the Premier with his own personal copy.
Jay. So, there's your copy of the Submarine Future Skills plan and I'll hand over to you and then we're happy to respond to your questions.
JAY WEATHERILL: Thank you.
Well, the decisions that have been made by the Federal Government, announced by Minister Smith, on Friday and the briefing that we've had today gives us great confidence in the future for Port Adelaide and not only Port Adelaide but South Australia.
What they've now done is chosen the most important option for South Australia's skills and capabilities, the option which is most likely to drive an advanced manufacturing future for South Australia. And this document sets out exactly how they're going to get there.
We're about 3000 people down here at the moment working on various elements of the program. The submarines, the Future AWD Project, and also the beginning of the Future Submarine Projects.
This allows us to sustain that employment into the future. We know we have a good pipeline of work through to 2019. The question becomes what we do after 2019. And all of the decisions and the thinking that's gone into this document means that we'll have a continuous pipeline of work.
What that means is that we can have skills and capabilities stay in South Australia. It means workers here will continue to be able to have a future for themselves. Businesses will be able to invest on the strength of these industries continuing in the future, and that's important. It's important that there's security so that businesses that are making business decisions know that there's a long term future down here.
The other thing that the Commonwealth Government has done by backing this in is to back in South Australian skill and capabilities. Backing Australian skills and capabilities for a future making things.
For me, I haven't intruded on the Defence issues. They're matters for the Commonwealth Government about looking at capability. But from an industry development perspective, it is an absolute no brainer for the largest procurement project the Commonwealth is going to undertake to be doing that here in Australia.
When you can build skills and capabilities for Australian workers that can then be used throughout the whole of industry. This doesn't just stay in these four walls of this particular facility. It spills out and effects skills and capabilities across the whole South Australian landscape, and that's exactly what we wanted to achieve when we set up Defence SA and bid for this work.
We've now got about 25 per cent of the nation's in-country Defence spend. That's a fantastic achievement for a small state like South Australia and it's the springboard for an advanced manufacturing future. I want to thank the Commonwealth Government for committing itself to this decision.
I also want to express grave concerns about the Federal Coalition. Even in today's paper we hear them - obviously the Federal Shadow Defence Minister's been off speaking to some Americans. He's come back from that. It's managed to find its expression in The Financial Review today where we see at least the American defence analyst seems to be very convinced that the Coalition within the first six months should they be successful in becoming elected will be going straight back to an off the shelf option.
That is no South Australian skills and capabilities. Not backing in South Australian workers, but wanting to export all of these opportunities offshore. Now, it doesn't make sense from a Defence perspective, it doesn't make sense from an industry development perspective, and I call on Tony Abbott and I call on his Shadow Defence Minister to back in the Commonwealth Government's decision to back South Australian skills and capabilities and commit to the design options which mean South Australians - Australian skills and capabilities stay here in Australia.
JOURNALIST: Do you think the Coalition will see sense should they win Government given the fact that the Defence sector is telling you, obviously, the capabilities just aren't there off the shelf?
STEPHEN SMITH: I endorse the Premier's remarks. The remarks made on Friday afternoon in the aftermath or release of the White Paper by the Shadow Defence Minister are very concerning. They're very alarming from a strategic point of view and they're very alarming from a South Australian jobs and development point of view.
The Shadow Minister for Defence, Senator Johnston, has consistently and repeatedly over the last two years said that he is focusing on a military off the shelf option for replacement submarines. He also said on Friday that he would not touch the Collins Class submarine with a barge pole.
And so that throws up not just the spectre of the Opposition if they are successful in September - throws up not just the spectrum of an evolved Collins Class design for the Future Submarine being thrown out, work on a wholly brand new Australian design being thrown out, also conjures up notions of whether the Coalition, if in Government, would put the same investment, the same resources, the same effort into maintenance and sustainment of the Collins class submarine, which we've been doing to get our submarines back into the water at a sensible operating rate.
And beyond the Collins Class submarine, it's quite clear that the Shadow Minister for Defence's instincts are to buy a military off the shelf model. That's got two very concerning aspects. Firstly, the Collins Class submarine is the most capable, conventional class submarine in the world, so going to a military off the shelf model would be a lesser capability than the Collins.
It would not give us the strategic or the operational reach that we need for a maritime country and a maritime continent - insofar as Adelaide, Techport, and ASC is concerned, runs the very grave risk that all of the work that we have referred to - the land based test propulsion system here - would not occur under the Coalition.
The work on the Future Submarine Project, the design work, all of the technical and skills work on that front would not be done here. So, there are very grave risks as a result of what the Shadow Minister for Defence and the Coalition has said in the response to the White Paper on Friday. And the Premier is quite right. Tony Abbott needs to clarify precisely what would occur if he wins the election in September.
JOURNALIST: In terms of the Valley of Death, you mention the possibility of ASC bidding for patrol boats or supply boats, but there's no guarantee for these Air Warfare Destroyer workers for continuity of work. Is there after 2019?
STEPHEN SMITH: The work on the Air Warfare Destroyer Project, our three Air Warfare Destroyer build, and that'll be ongoing here until about the middle of 2019. And I've referred to the ongoing maintenance and sustainment work on the Collins Class submarine and the work that under a Labor Government is and will be done into the future on the design for the Future Submarines Project.
So, rule of thumb, that's just under 2000 workers on the Air Warfare Destroyer Project and just over 1000 workers on the submarine project. The Air Warfare Destroyer work will continue until 2019. In the meantime, we are bringing forward consideration of the supply ships or the replenishment ships.
That's to bring forward essentially from consideration in 2018 for consideration now and also the patrol boats on the same timetable. And that means that ASC can put forward its suggestions, its views, on both of those projects. There can never be guarantees when it comes to work done in our national security space.
These all need to be done by way of competitive arrangements, but the very good news for ASC and Techport is you've got a guaranteed workflow so far as the Air Warfare Destroyer Projects are concerned until about the middle of 2019. And in the meantime options will be there for ASC and Techport to put their views forward to try and get their views known and heard on the bring-forward of our replacement for the supply ships, and the bring-forward of our replacement for the patrol boats.
In the meantime, under a Labor Government, there would continue to be considerable work for the land-based test propulsion system, new work on that front, and also new design work - technical work for an evolved Collins design for the future submarine, or a brand new design.
JOURNALIST: So when would a decision be made on the bring-forward? And is there any money in the budget currently, if you're bringing it from out years to within the current budgeting period?
STEPHEN SMITH: We have already decided to bring forward consideration of those two projects and that'll start now. There is money in the forward estimates which will be published in next week's Budget to cater for that bring-forward. And we will then, in due course, make decisions as to what our replacement ships are on both of those projects.
JOURNALIST: So when would you anticipate construction could begin, or work could begin here?
STEPHEN SMITH: I wouldn't put a timetable on that, but the reason we've brought it forward five years is because when you look at the Future Submarine Industry Skills Program, what we're trying to do is to get a smoother flow of work. So we want a smooth flow of work from, for example, the Air Warfare Destroyer Project when that finishes, in the fine print of the Future Submarines Program document, we're also looking at the possibility of bringing forward for early consideration some aspects of the Future Frigate Program. Now that would be design, that would be technical, that would be systems, for example radar and the like.
So whether it's patrol boats, whether it's Future Frigate, whether it's supply ships, we're trying to get a smoother flow of work. Now that doesn't guarantee that the patrol boats, or the Future Frigates, or the supply ship's replacement will come here, or Newcastle, or Western Australia or Melbourne, but it does mean that all of those very important naval and general maritime shipyards all know that the potential is there for a smooth flow of work. And that's the thrust of the Future Submarine Industry Skills Program, and that's the thrust of the white paper decisions that we've made in this space.
JOURNALIST: Wouldn't the smoothest flow of work been to build a fourth Air Warfare Destroyer?
STEPHEN SMITH: I've seen that suggestion, and the 2009 White Paper opened up the potential for the Government to consider the acquisition of a fourth Air Warfare Destroyer. But there's no point making a decision for a fourth Air Warfare Destroyer unless it was something that we need strategically and operationally. And the very strong advice from the Chief of the Defence Force and the Chief of Navy was that a fourth Air Warfare Destroyer was not required in a strategic, a tactical, or an operational sense.
And so on that basis, when you are faced with making a national security decision, you can't - and I've seen one commentator expressing it in the same way, you can't let the tail wag the dog. You've got to make a national security decision, and so the national security decision we made was that there was no requirement for a fourth Air Warfare Destroyer. But then to make sure that we don't lose the skills that we've acquired on the three Air Warfare Destroyer Project build - whether they're technical skills or whether they're metal cutting skills, we wanted to, in a sensible way which matched our strategic and tactical and operational demands, make sure there was a smoother flow of work.
We're bringing forward consideration of our supply vessels because the Success and the Sirius are both ageing platforms, and we don't want there to be a gap in capability. We're bringing forward our patrol boats because our patrol boats have been worked very heavily in recent years. So it makes sense from a strategic, tactical and operational point of view, but that also made sense from a smoother flow of work point of view. But you can't - when you're trying to fill a skills gap or retain the skills, you can't make a national security decision which involves billions of dollars, but for which there is no strategic or operational necessity.
And that also - the strategic and operational necessity, also drove our decision on narrowing the focus on submarines to an evolved Collins, or to a brand new design, because strategically and operationally, none of the off the shelf models give you the strategic reach or the operation reach that Australia needs as a maritime continent with important northern and western approaches, with the growing importance of the Indian Ocean, but also, the need for our submarines to have the capability of engaging in the Indonesian archipelago.
JOURNALIST: There's reports today of an hour long meeting between Ben Roberts-Smith and Tony Abbott which has sparked some speculation that Ben Roberts-Smith may be interested in a career in politics. Are you at all concerned by that? And do you ever have similar behind closed doors private meetings with him yourself?
STEPHEN SMITH: I think, frankly, that story's been over egged. I see reported in the newspaper that he had a secret meeting which was witnessed by all concerned and, as a consequence, there being reports of it. It's entirely a matter for Mr Abbott and for Ben Roberts-Smith. But from time to time, I have conversations with Ben as I do with the other VC winners, whether it's Mark Donaldson or Dan Keighran.
I have no idea what was discussed in the meeting, go off and ask Mr Abbott or Ben if you like. But whenever I see, blazoned all over newspapers, stories of a secret report, I take it with a grain of - secret meeting, I take it with a grain of salt. I think they both happened to be in Geelong at the same time.
JOURNALIST: When is construction of the next generation of subs expected to start here Aus Corp?
STEPHEN SMITH: We're not proposing to put a timetable on that. What we know is this: the Collins Class submarine build, all of which occurred here. The build took place and they went into the water between 1996 and 2003. When they want into the water they had an on-paper life of type of 28 years. Part of the work that we've been doing to remediate the maintenance and sustainment of the Collins is also to look at the Collins life evaluation. And that has said that there's no reason why we can't get one more rotation, or one more cycle, out of the Collins, another seven years.
So that sees the prospect of the Collins Class continuing to operate until 2031-2038. So the Future Submarines Project is a long-term project. We're not talking months and years here, we're talking years and decades. And I have been very assiduous, and I've made the point from day one as Defence Minister that I'm not going to be rushed into the Future Submarines Project. When I first became Minister, a lot of people said to me, you should rush off to Cabinet and get approval for the Future Submarine Project, and I said I'm not proposing to do that until we've got a very clear handle on the mistakes that we made with the Collins Class submarine, and we've got the Collins Class operating better.
And a lot of the lessons we've learned from our last two years work on that Collins Class submarine will be invaluable for this Future Submarine program. All of our experience in defence capability work - are the mistakes you make early in the piece are magnified and maximised later in the piece. And that is particularly true of what will be the largest defence project the country's seen and the largest capital works project the country's seen. So I'm not putting a timetable on that, I want to make sure we do everything we can to get all of the detail right. And that's what we're doing.
In the meantime, we are making substantial improvements on our Collins Class submarine maintenance and sustainment. Operational ability is slowly but steadily and surely improving. I rarely make political points when it comes to national security issues, but let me make a couple of political points.
You would be forgiven for believing, when it comes to the Collins Class submarine, that the Howard Government did not exist. The last of the Collins Class submarines went into the water in 2003, and the first went into the water in 1996. Last time I looked the Howard Government got into office in 1996 and stayed until 2007, 11 years. If you believe the Shadow Minister for Defence you'd think the Collins Class submarine only started to have difficulties in December of 2007. So the Howard Government was on watch during the period of time in which the Collins Class submarine went into the water, and then the first 11 years of their maintenance and sustainment. We have done more work to improve to Collins Class availability, and maintenance and sustainment in the last two to three years than was done in the years 1996-2007 under the Howard Government. So I'll just make that point.
So we're doing better with the Collins Class submarine, and we're doing all of our methodical planning for the Future Submarine in the manner in which we've outlined including the design work which will be done here, including the land-based test propulsion system, the vast bulk of which will be done here.
JOURNALIST: That next generation sub - that timeframe, that's blown out hasn't it?
STEPHEN SMITH: No - It has - No.
JOURNALIST: Because it was previously suggested it 2021 we would get a start date - won't we?
STEPHEN SMITH: It has not blown out. I have never as Defence Minister put a timetable on when work would begin in terms of the build, or when they would go into the water. I've always made the point, what we don't want to occur is a gap in capability. We now know that there's no reason why we can't see the Collins Class submarines operating until the 2030s. So we want to have a progressive ongoing build, but the most important thing about the Future Submarines is to get all of the planning and all of the detail right, to learn the lessons of the Collins Class submarine. The big mistake with the Collins submarine was not to have a maintenance and sustainment plan from day one. We won't make the same mistake with the Future Submarine whether it's an evolved Collins, or a brand new design.
JOURNALIST: So the fact you've got flexibility with the Collins Class will extend the life of that. What's the latest construction can start of the next generation?
STEPHEN SMITH: Well again I'm not putting a timetable on it other than to simply say we want to make sure that we get all of our planning right. This'll be the single biggest capital works program that the Commonwealth has seen. There'll be any number of Defence Ministers who will be on watch in the course of its preparation and its build. This is a project that will go not for years, but for decades.
The most important thing is in an assiduous, methodical, careful way, to get all of the planning right, and that's what we're doing. And as a result of decisions made in the white paper, that planning and careful work, the vast bulk of it, will be done here. Okay.
JOURNALIST: What technologies and capabilities do you want to see in the Future Submarines that are currently in the Collins?
STEPHEN SMITH: Well firstly we need to have a submarine which is as capable as the Collins Class submarine. But given the Collins Class submarine went into the water between 1996 and 2003, obviously we want an advanced and superior design and submarine on that. The big mistake that Senator Johnston and the Coalition are making is that there is no military off the shelf submarine currently available which has the same reach and capability as the Collins.
So obviously we want a Future Submarine which is fit for purpose and fit for the future, and that's why we're doing all the work we are. I think the Premier and I have got to go.
Thanks very much.