Doorstop Interview, Avalon, VIC

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The Hon Pat Conroy MP

Minister for Defence Industry

Minister for International Development and the Pacific

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Peta Donald (Minister Conroy's Office) - +61 435 521 326

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1 March 2023

SUBJECTS: Opportunities for Australian defence industry, Apache and Ghost Bat programs, Defence Strategic Review, Peter Dutton’s irresponsible comments, Hunter class frigates, vision for Australia’s defence industry

MINISTER FOR DEFENCE INDUSTRY PAT CONROY: Well, good morning, everyone, I'm Pat Conroy, the Australian Minister for Defence Industry. I'm joined by Kathleen and Scott from Boeing and Major General Jeremy King from the Australian Defence Force. So we're here to make a really exciting couple of announcements at the Avalon Airshow, which is really the premier airshow in the Southern Hemisphere and it's great to be back here after four years.

The first announcement we're making today is that we will be signing, or have signed today, an Australian Industry Capability Deed around our acquisition of 29 Apache helicopters from Boeing. This is a $4.2 billion contract that will advance the capabilities of the Australian Defence Force, and in particular the Australian Army. And this capability deed is all about driving opportunities for Australian companies into the supply chain for both the acquisition of the helicopters and the sustainment of them. Further behind us, we've got the Romeo naval helicopter, and this is a great example of using - while an FMS case can deliver capabilities at a high speed with high-cost fidelity - but also driving Australian industry involvement. And so, for example, we've got the first US Navy helicopter, US Navy Romeo doing depot level maintenance right now, overhaul, in New South Wales. So this is a really important announcement that will generate jobs for Australian industry, will generate good paying jobs as well as securing our nation.

The second announcement we're making today is on the very exciting Ghost Bat project, which is a cooperation between Boeing Australia and the Australian Government. The Australian Government has invested $600 million to develop ten aircraft. These unmanned aircraft are a really exciting opportunity and are part of the future for our air capability. This is a $600 million investment in this future capability, and we've managed to increase the number of Australian suppliers in that particular project by 66% - 60%, rather. So there are 55 Australian companies involved in supporting Boeing, including some great Australian companies that have been very successful, such as Moran. So both these announcements are about getting capability for the Australian Defence Force, but at the same time growing jobs in Australia. Around 100,000 Australian jobs depend upon the Australian defence industry. We intend to maximise investment in Australia, not just for the economic wellbeing, for the Australian population, but also for sovereign capabilities to sustain and advance the defence of the nation. So I'll leave my remarks there and I'll invite Boeing to say a few things.

KATHLEEN JOLIVETTE: Hi, good morning. I'm Kathleen Jolivette. I'm the Vice President and General Manager for Vertical Lift at the Boeing Company. Really proud to be here today. Boeing has a longstanding relationship with Australia and this is just another step in that relationship to bolster the cooperation between us. You have behind me the coolest attack helicopter in the world. We have 17 customers across the globe, and we will soon add Australia to that number. But really proud to be here today. Thank you.

PAT CONROY: I'll invite questions about the two announcements and then if anyone wants to ask me about other things, we might invite Boeing and the defence reps to exit.

JOURNALIST: Related to this conference, the Chief of Air Force has talked about getting more low cost drones in the sky. As part of the lessons learned – [indistinct] he's called for a swarm, perhaps, of low cost drones. Is that something that would emerge from the DSR?

PAT CONROY: As your question indicates, these are the sorts of topics that the Defence Strategic Review has examined. The issues around Air Force capability, and I’ll be a politician and say I won't get ahead of the DSR. But as I said before, the DSR is the most important defence document since the mid 1980s with the Dibb White paper. And we’ll have to see what that says and the Government response, which will come out before the budget.

JOURNALIST: Have you looked at the BAE proposal unveiled yesterday. Would that fit the capability that the Air Force Chief is after?

PAT CONROY: The BAE capability is one example of the great investments we're seeing from a range of Australian defence companies. And again, the DSR will sketch out and make recommendations to the government about what are the future capability priorities are and the Government will then respond and will then go down certain paths. So it will be premature for me to announce anything before then.

JOURNALIST: Is the intention though, once the DSR is released and the Government responds, to actually start acquiring some of these technologies with haste?

PAT CONROY: Well, as I said to you, sorry, I'll answer that question. Are there any questions about the two announcements today?

JOURNALIST: When do you expect to take delivery of Apache helicopter?

PAT CONROY: I might ask Major General King to give us the details on that.

JEREMY KING: At these stage we are looking at delivery of those aircraft 2026. So the order was signed, the FMS case, the foreign military sales case was signed in April of last year. So we're some way along the contract in acquiring those aircraft.

JOURNALIST: So when are you on contract?

JEREMY KING: So we are on contract with the US government for those aircraft April of last year.

PAT CONROY: Any other questions on that? Thank you.

JOURNALIST: Can I just get an answer –

PAT CONROY: Yes, and your follow up question there. So, look, the process is the DSR has been delivered to Government. We're going through the process right now of the response, of providing a response. As the Prime Minister indicated in his Press Club address last week. Both the public version of the DSR and the Government's response to the DSR will be released before the budget. That will then flow through into things like the integrated investment plan and the budget itself. You can expect us to move with all due haste after that. We've been very clear that the Defence Strategic Update of 2020 was quite right to say the ten year warning horizon has disappeared. We face the most uncertain strategic circumstances since World War II and it's my job to lead with the Deputy Prime Minister in speeding up the acquisition cycle. So you can expect us to move as quickly as possible. What you won't see is the ten years of delay that we've experienced previously.

JOURNALIST: Minister, Peter Dutton has just said that Australia should not buy a British submarine. He says it would be a mistake because the US Virginia platform is developed, it already exists. The SSNR is the next generation, the Astute SSNR will be a developmental platform, will take too long to get and, you know, there's all issues as well with the Astute supply line. What do you think of those comments?

PAT CONROY: Well, I think those comments from Peter Dutton are incredibly irresponsible. This was a man who received classified briefings up until the 21 May on this program. He is either being mischievous or he's not privy to the latest information. I've just come back from Barrow in the United Kingdom, where I've got a full briefing on what the United Kingdom is doing. I stay in regular contact with the US Navy, and we'll make announcements very shortly about the optimal path forward on our nuclear propelled submarines.

But what I can say to you is, we are dealing with ten years of waste from the last Government. I'm not being political about it. We would be in a much better position if they hadn't chopped and changed so much. We had delays in terms of deciding on a replacement for the Collins class. They then went down the path of trying to offshore the work to Japan. They then had the contract with the French, which they then tore up, and now we're trying to repair that damage. And what the Deputy Prime Minister has committed to is when we make the announcement, we'll be very clear about what is the optimal path forward. When we came into Government, there was a serious risk of having a capability gap and now we are confident that we have a pathway to resolve that capability gap. That will be detailed when we make the announcement.

But I just think it's incredible for Peter Dutton to make these comments like they're mischievous, they undermine confidence in the programme and it's like the arsonist burning down a house and they're complaining about how long it takes for the fire brigade to get there. This man has caused this problem. He's a man who's driven 28 projects to be 97 years late. And I just find it completely unhelpful in the public debate for him to be injecting this stuff when he knows that there are security reasons that mean that we can't detail information until we make the announcement.

JOURNALIST: On his point, though, isn't the interoperability a factor in this? And do you have concerns about the delays with, say, the frigate programme being run out of the UK?

PAT CONROY: Oh, look, I've been very frank about the challenges with the Hunter class frigate. Again, this is a project that we inherited from the last government. A project where, quite frankly, the last government lied about what they were buying. They presented to the Australian public that they'll buying a proven, off the shelf product that effectively all the kinks have been resolved in the Type 26 UK program. Instead, we've got a developmental project where the project cost has increased by 50% to just under $45 billion. And we're facing delays of between two and four years on separate stages of it. And we're committed to working with BAE and the Navy to fix that particular project, but –

JOURNALIST: Do we really need nine Hunter class frigates?

PAT CONROY: Well, again, you're asking me capability decisions that are things that it would be inappropriate for me to comment on at this stage. But what I can commit to is having the most capable navy possible and repairing the damage done by the last government, who was very unclear on their acquisition strategy, who threw money around in press releases, but then they've actually delivered on anything. We're doing the opposite and that's why I'm being quite restrained in my comments here. You will see more details on our acquisition programme and our capability development priorities through the DSR and the optimal path forward for the nuclear submarines. And that's the way we'll do it in a calm, measured way. I won't be briefing out things, like Peter Dutton is trying to do, that are either lies or just mischievous interventions.

JOURNALIST: On these ten drones. Is this a science project or something that you see using in operations in the future?

PAT CONROY: Well, I think they're unmanned aerial vehicles. So drones are very important, and the announcements that we've seen from various companies is good, but if you go over to the Ghost Bat display, I'd say it's a bit bigger than a drone. But I know what you mean. So, look, I think we're acquiring ten of these for test and evaluation. We're very excited about the possibilities of partnering them with manned aircraft. That $600 million investment by the Australian Government, in partnership with Boeing, has produced 400 jobs in Australia right now working on this advanced capability. And when I was in the United States in October last year, I can say to you the United States is really interested in the potential of this. They're running their own program, but we'd be very interested in the opportunities to partner together. This is a critical part of future air capabilities. It’s the partnership between manned or staffed platforms and unmanned capability.

JOURNALIST: Realistically, though, what is the timeline for the Ghost Bat? Industry sources suggest that it's still a very developmental program and it could be a decade before you have Loyal Wingman drones like the Ghost Bat flying alongside our F-35s.

PAT CONROY: Well, again, it'd be premature to talk about when they'd be deployed, but what I can say to you is that progress is being made. We've had our first flight test being done and there's a developmental pathway for it that's very exciting, but we've got to be very careful. The unmanned space is an area where you have to be very careful.

JOURNALIST: On Ghost Bat, do you think Australia has done enough to promote that product around the world? Are we actually seeing any orders for it? There were great hopes for exports.

PAT CONROY: Well, this is an area where you have to get the balance, right, because we want the best possible capability in Australia, so you have to be careful about who you promote exports to. But what I can say is an investment of $600 million from the Australian Government is a very significant investment. I've had some really productive conversations with the US Air Force about it. They've got their own process they're going through, but we're very excited about it. But the first requirement, to be quite frank, is to develop the platform and make sure that it's something that fits with our priorities for the Australian Air Force. And if that happens, then, of course, we'd be very interested in exporting it to like minded countries or partnering with like minded countries on further development. As I said, it's delivered 400 Australian jobs already. It's got an exciting future going forward.

JOURNALIST: Minister, what's your vision of our Australian defence industry, do you think it can be a supplier for the US Military, going forward?

PAT CONROY: Well, my vision is the first job of the Australian defence industry is to provide equipment to the Australian Defence Force as close to on time and on budget as possible. Sometimes people in my role get focused on other parts of that job and we should be focused on those but the first job is to deliver material to the Australian Defence Force. The second opportunity is to grow a sustainable and sovereign Australian defence industry. As I said, we've got 100,000 jobs already reliant on the Australian defence industry. We've got some great success stories, just both locally and overseas. The classic example is the Bushmaster. I met with the Deputy Defence Minister from Ukraine last week at the Munich Security Conference and he was evangelical about the commitment and the service that the Bushmaster is providing.

But I'll be very honest with you here, Australia has underperformed on defence exports. Governments of all persuasion have said they want to do more, but it's challenging. It's absolutely challenging. But we can work with the US. We're supplying parts into US platforms right now. And I've been very frank with the US that we've got great opportunities to partner going forward on things like our guided weapons enterprise, where not only can we produce missiles in Australia for Australian Defence Force needs, but be a second supply line for the United States. I had a great meeting with Lockheed Martin, they've got their HIMARS capability behind us. That is one of the exciting opportunities we're exploring.

JOURNALIST: Minister, do you think the Defence Strategic Review is actually slowing down the acquisition process? Because it seems to be an awful lot of programmes, basically on ice or in holding patterns at the moment.

PAT CONROY: Well, I've seen this speculation in some parts of the press and I can assure you it's absolute rubbish. I have driven more than ten capability submissions through the National Security Committee of Cabinet in the last few months. There has been no pause in that workflow. What we do do is consult with the DSR lead to make sure that our announcements are consistent with where they see their recommendations to government. The best example of that is the HIMARS acquisition. Where we actually sped up the acquisition. If we'd followed the timeline that the last government had, we would have lost our spot in the production queue, such as the global demand. We brought that acquisition forward to make that decision in November last year.

Same with the signing of the contract for the naval strike missile. That's where we brought decisions forward to secure capability earlier than originally planned. So there has been no pause. There has been only one project where we've deferred a decision until the DSR has been considered, and that's Land 400, Phase 3, and quite frankly, that is the biggest acquisition the Australian Army is acquiring. It's got a project value of up to $27 billion. It's quite appropriate that we consider that acquisition in the context of the DSR, but there has been no reduction in workflow. We're working very hard through the government approvals process, as the HIMARS announcement, as the Growler announcement last month was as well.

JOURNALIST: Minister, have you been able to meet with US officials at this show. And if so, what can you tell us about what you talked about?

PAT CONROY: Well, I only got here this morning, so I haven't had those opportunities. But we'll have opportunities to meet with not just US officials, but people from like minded countries. It's a great aviation show that brings a lot of people together.

JOURNALIST: Can you tell us why China was not invited here this year?

PAT CONROY: Well, that's a question for Defence. A decision was made by the department not to invite China or Russia, and you're best off directing your questions there, Andrew.

Anyone else? Not a problem. Enjoy the show, everyone.

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