Minister for Defence - Opening Address at the Submarine Institute of Australia 2nd Technology Conference - Adelaide Convention Centre

Ladies and gentleman can I begin my acknowledging Premier Weatherill - South Australia is and continues to be the Defence state, as I said approximately one week ago at PAC13. Vice Admiral Ray Griggs, Chief of Navy, Peter Horobin, President of the Submarine Institute, Steve Davis Executive Officer, Head of DMO Warren King, David Gould, Rear Admiral Greg Sammut and Commodore Scott, distinguished guests all.

In acknowledging the importance of the Submarine Institute’s’ work and annual and biannual conferences I must pause to acknowledge the sponsors.

Ultra Electronics is the gold sponsor and I was with Ultra in the lead up to the last election here at Mawson Lakes. Lockheed Martin of course, I spend an awful lot of time with Lockheed personnel – Joint Strike Fighter is a very significant project for Australia. Bronze sponsors Daussault Systemes, Sonar Tech Atlas and Thyssen Krupp. DMTC, Aviva, ASC and thank you ASC for all the personnel who are presenting over the next few days. Saab of course over at Mawson Lakes, teaming with CEA phased array radars over at Fyshwick in Canberra, a huge and exciting project and a significant footprint of that project is based in Adelaide. Seimens - I have been down to Bayswater on two occasions now, based in Melbourne, PMD Defence, Defence South Australia, MacTaggart Scott, Thales of course with their phenomenal capacity out at Brighton there providing world class sonar technology.

The corporate sponsors I thank you because the times have been tough in the Defence industry space, for you to pull out the cheque book and support the Submarine Institute is something I know Peter appreciates and is very thankful for and I too are very thankful when I look at the quality of the speakers and how far they have travelled, it is significant that the Institute has the capacity and the resources to put on this very special presentation of what is cutting edge deterrent capability.

So many of you will be pleased to know I have heard so many secret things in the last few weeks that I can’t remember any of them. At the very top of the list for us is the Collins Class submarine. Its expense as we've discussed on many occasions in the past is dominating not just Navy’s sustainment budget but Defence’s sustainment budget.

But it is an extremely important platform for us, we are a maritime nation, we have a very capable and cutting edge submarine when it is reliably working. I want to pause to say to the Chief of Navy my hearty congratulations - we are getting back into the space day by day, week by week, and we are having a lot of success, three boats in the water as I stand here today.

Many people think that the complexity of the program we are confronting – the mediation of the Collins, the submarine life extension program and SEA 1000 means that a gap is unavoidable. But I am not convinced, and it would take a lot for someone to show me that there is not the will; the capacity or the resourcing to avoid what was set out by ASPI in its “Mind the Gap” document.

I will not swallow for one split second the fact that we must have a capability gap in our submarine capacity, and I know that our allies will not stand for that either. So we must do a lot better in a more timely way.

I haven’t yet had the full briefing on what we’re doing with Collins or SEA 1000. So as I stand here today I am asking myself well what have we done in the last five years, and I intend to find out very shortly and it won’t be a briefing, it will be seminar, and it will go for several days, because this is our number one priority at the moment.

I want to pause to say that we’ve used the word this morning ‘enterprise’. That’s a very good word; it’s a word that imparts something special to me coming from Western Australia where we treat mining and minerals processing as an enterprise. That word has had in many respects its inauguration in Australian submarine parlance from the reports of John Coles. And what he is saying to us, and I thank him for it, is that you cannot, in a piecemeal way, go forward tinkering with the nuts and bolts of this particular scientific artefact as it stands. You must have an across the board, whole-of-Government approach to sustaining this capability.

So from training to the support sciences, all the way across the board to weapons systems, to operational concept documents and the and to bolting onto the capacity of our allies, we must have an enterprise. And an enterprise is a very successful, expedient description of what we must aspire to. I have not seen a lot of the ingredients to fulfilling that objective to this point in time.

So that my task is one of getting Canberra particularly is to understand that time is money, is capability. This is a bit of a foreign concept to Canberra. Things seem to just ‘roll on a bit’, if you’ll excuse me. The environment that I come from is extremely time-sensitive. Prices and finance are together, business commences, if they come apart, business stops. Now in this instance, these submarines are so important to us that time is of the essence.

We must drive the restoration of Collins very hard; we must learn the lessons and apply them as we simultaneously work towards SEA 1000.

Now anti-submarine warfare is obviously a skill that we must focus on to a greater degree than what we have. Our near neighbourhood is being populated by some very successful and capable small submarines and I see that Indonesia, with the assistance of the South Koreans are getting some capability, Malaysia obviously has it, Singapore certainly with their Acher Class and so on . These countries are recognising the importance of the platform, we must recognise the important of our platform but we also must practice the skills and bring them up to a standard befitting of a maritime nation that is utterly dependent on its economic sea-lanes and the security thereof.

So to John Coles I say thank you, the home truths of his reports, and there will be more reports from him I hope, mean that we can refocus our best efforts in Canberra on this capability.

The last thing I want to talk to you about to those of you, who are in industry, is the problem that we confront as a small nation but a skilled nation. Many of you are doing things, manufacturing things that are very sensitive in terms of the defence export control. I have a significant difficulty with a Defence Export Control Office that just says no, and then the purchaser goes to one of our neighbours and gets exactly the same product. It is frustrating, annoying, infuriating may I say.

We have a foot print here, often from Europe or North America, where there is a substantial investment in providing the technological skills to develop particular componentry and capability, we get out and try and sell it and somebody says you can’t do that, it’s too sensitive. And within days they have purchased it from somewhere else. If we are going to go down the path of being a technologically cutting-edge leader in Defence industry, the Defence Export Control Office must be able to assist in the provision of tamper proof product, of having some capacity to flexibly respond to challenges that having a skilled, highly technical, economic output require.

We want you to invest, we want you to make a profit and we want to assist you to export. So that the problem I am confronting on a regular basis is exporters who simply cannot sell their product because somebody says no that’s too sensitive. With no right of appeal.

So my experience in Western Australia of a producer with $27 million worth of a particular type of metal, going into the Middle East, that project was stopped and this was a sizable output for this manufacturer. No ifs or buts, no question or capacity to review – you cannot sell that. Now when I asked why, the then Minister said to me ‘the intell is not good, I can’t question it’. There was not one single metallurgist making that decision. So I am very disturbed when I have a repeat of that type of incident more recently, we have some work to do if we are going to encourage you to invest in Australia in this highly technical area, and produce the componentry that we indigenously need, but being such a small market we must export, we must participate in the global supply chain, and how can you do that if we won’t let you.

So the challenge for me facilitating what you do out there in this very important area is to have an export office that is quite dynamic, that anticipates the problems, and understands that you must succeed in your commercial endeavour. So that’s one area where I think we can enhance the enterprise and we are going to make some significant changes in the way we go about it.

In looking at the people that will be talking to you in the next two days, I will miss some important presentations which I apologise for, but this is a fabulous conference. It is a conference that has assisted my greatly in understanding one of our most important Defence outputs. Without knowing the way you all do your business and without understanding what is required for our submariners to have the cutting edge that they must have, I feel as if, as a Defence Minister, I would have been completely vestigial to the process. Thank you for the last four or five years, I did not have many friends in Opposition but thank you for taking the time to coach me, as a mining lawyer for Kalgoorlie in Western Australia, this is an area that is extremely complex and when I sit around with my colleagues I can tell you there is a lot of blank looks when I start talking about submarine capability.

This is the problem we confront; it is a very exclusive, defined area as I’ve said before. The battle goes on, the plan is coming together, and you will hopefully shortly see exactly what we are going to do with Collins, you will see the path that we going to choose will be a middle path for SEA 1000 but that will provide us with a very capable, cutting edge submarine to match our capacity to resource it and to man it.

So thank you very much for listening, I wish you well with the conference, it is very important to me, it is very important, I know, to the Chief of Navy, but it is also very important for our country, thank you for your participation.

ENDS.