Doorstop interview, Adelaide

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

The Hon Peter Malinauskas

Premier of South Australia

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10 November 2023

SUBJECT/S: South Australian Defence Industry Taskforce report; Commonwealth and South Australian Government land swap; AUKUS; Surface Fleet Review; Defence Strategic Review; High Court case; Optus

ACTING PRIME MINISTER, RICHARD MARLES: Let me start by saying it is my enormous pleasure to be here today with my good friend, the Premier of South Australia, Peter, Malinauskas who has always given great attention to detail. And so, today has made sure he's wearing his Geelong tie to do this press conference with me and to be here with Vice Admiral Jonathan Mead, the Director General of the Australian Submarine Agency. And we are here today to make two really important announcements, which are critical steps in the pathway to Australia, having the capability to operate nuclear powered submarines, but critically, having the ability to build nuclear powered submarines right here at the Osborne naval shipyards in Adelaide. The first of these announcements is today we are announcing a land swap between the Commonwealth Government and the South Australian Government. Defence land at Keswick, near the city centre and Smithfield in the northern suburbs of Adelaide, along with Cultana, will be provided to the South Australian government which in time will allow for housing developments at Keswick and Smithfield and will allow for the development of the state's hydrogen plants and hydrogen plant at Port Bonython which was announced between the Premier and the Prime Minister earlier this year. And in return, the South Australian Government is providing land to the Commonwealth right here at the Osborne Naval Shipyard, which is where the nuclear powered submarines will be built, and importantly, where the Training Academy will be established.

These land swaps will happen in two tranches, the first of which will see land between our two governments in a matter of weeks, and the second tranche will happen within the next five months. This is a critical foundational step in allowing us to move down the pathway of building nuclear powered submarines here in South Australia. And the establishment of the training academy particularly is a critical step forward in making sure that we meet the human challenge. As we have looked around models, in our partners in the United States in the United Kingdom, what is absolutely clear is that it is critical to have at the heart of your training establishment, a facility which is on site, which allows people who are doing that training to get their skills on the job. And that's what this Training Academy will be. It's something that we've not seen before and it will be a very, very significant step forward in what we need to achieve and building nuclear powered submarines here in Adelaide.

And that leads into the second announcement today as we are releasing the South Australian Defence Industry Taskforce report. The South Australian Defence Industry Taskforce was the key South Australian outcome of the skills and jobs summit that was held last year in Canberra. I really want to commend the Premier who drove this outcome. It's been a joint endeavour between the South Australian and Commonwealth governments. And it really is looking at what will be the most significant challenge that we face in walking down this path. What the report identifies is that there'll be 11,000 direct jobs through to the 2040s in terms of naval shipbuilding and naval submarine building here at Osborn, 8,500 direct jobs, 5,000 of those on the submarines alone, and that doesn't include the near 4,000 jobs that will be required to design and build the facilities which will be where the submarines themselves are built. Now that is obviously a great opportunity for the state of South Australia but it also represents a really significant challenge and one that we have to get right. The report identifies 22 measures which look at the full spectrum of skills training from those leaving school right through to tertiary training through to PhDs, and to mid-career retraining so that we get the workforce that we need with the skills that are required to undertake this task. And today, we are implementing one of those recommendations, which is a $12 million commitment, which will be jointly funded by the Commonwealth and the South Australian Governments around the defence industry pathway program, which will see entry level trainees doing certificate II and certificate III in defence industry. So together, these are two really important announcements which demonstrate the extent to which work is happening right now to see us walk down this pathway. Building nuclear powered submarines, right here in South Australia represents one of the biggest industrial undertakings that our country has ever seen. This is on the scale of the Snowy River scheme. And it is going to be the great modern industrial project of our nation, which will see right here in Adelaide, one of the most high tech manufacturing facilities in the world. It's exciting. It is a big challenge. And we are so pleased that we have such a great partner in Peter Malinauskas and the South Australian government to work on this with.

PREMIER OF SOUTH AUSTRALIA, PETER MALINAUSKAS: Well, thank you very much, Mr. Acting Prime Minister. I can't tell you how excited I am about today's news. And I'm very, very proud to be able to sign off on this land swap this morning in what is a genuine historic agreement between the state government and the Commonwealth. I also want to acknowledge the work of Vice Admiral Mead. Vice Admiral Mead has been charged with one of the most substantial responsibilities that exists within our nation, leading the effort to build nuclear submarines right here in South Australia is a complex undertaking. But that's a responsibility that sits with him comfortably. And I'm very grateful for the work that he's doing in conjunction with our government, but just as importantly, the work that he is doing for the country.

Let me start with the land swap. This is something that the state government has been working on now with the Commonwealth for months. This is a has been a very significant exercise. A land swap of this size and scale is so significant that it demands a lot of work that goes on behind the scenes to be able to get us to the point that we are today. But this is significant. Let me give you some of the numbers. The land swap between the Commonwealth and the State sees the South Australian state government handover just over 60 hectares of land to the federal government so we can build nuclear submarines here at Osborne. In return, the South Australian Government is getting over 15,000 hectares of land from the Commonwealth. We give up 60 hectares in return, we get over 15,000. That 15,000 Square hectares of land comes in three separate parcels. The first is at Keswick which is approximately 13 hectares of land. That's 13 hectares of land at the Keswick site, the old army barracks represents a transformational opportunity for an urban renewal project in close proximity to our CBD, unlike we have seen come before it. This is a big opportunity for housing, a master plan development in a really strategic location. There have been dreams of one day the state government being able to get his hands on this land, but they've never come to fruition will today they do.

The second parcel of land is in the order of 38 hectares and that's at Smithfield. A big parcel of land at Smithfield, and behind the Munno Para Shopping Centre presents an opportunity for a major urban renewal project right on the electrified Gawler line that we'll see 40 per cent affordable housing, now that is a big commitment that is necessary. And in an age where we've had a lack of housing development, because we haven't had long term planning in the past. Those days are over here in this state, and that project will be significant in nature. But the big parcel of land is the 15,000 hectares at Cultana. Most South Australians won't necessarily picture a geographic location when we mention Cultana but Cultana is a significant army facility in the north of our state, adjacent to Port Bonython. I think that pasture land is strategically valuable to the state government for our hydrogen and renewable energy project ambitions. At Port Bonython, recently, we announced a $100 million program of works jointly funded between the state government and the federal government by attaining the Cultana land off the army, we can now expand those ambitions to make sure that South Australia really is a leader when it comes to renewable energy and hydrogen for many decades to come. It wasn't that long ago that trying to get our hands on either the Keswick site or the Cultana site was thought to be impossible. Well, that day has now arrived as a result of a highly cooperative and collaborative relationship that the state government has with the federal government. I can't tell you how difficult these negotiations have been but it's only through the absolute commitment towards cooperation that we've been able to realize those ambitions.

If I could talk about the Osborne site. While it is strategically important for the state to get access to this 15,000 hectares of land, what is even more strategically important is that we hand over the land to the Commonwealth at Osborne, to allow it to build a nuclear submarines. But specifically, to be able to build the academy. The academy that is going to be built on this parcel of land, here at Osborne will literally see thousands of young South Australians getting trained with the skills to be able to build the nuclear submarines and the surface ships that are set to be built here at Osborne. This academy will be training up young workers not just to work on the AUKUS submarines, but also the surface ships. So this is a strategic investment from the federal government that demonstrates that Osborne is the home of the major naval shipbuilding enterprise with our nation. And that is something that the entirety of our state can be proud about, and excited about into the future. We have the expo here on the weekend- thousands of young South Australians turning their minds to the industry that they're going to commit themselves into the future. There is a lot of opportunity coming our way and our state, and can only can be fulfilled, with substantial, and program of works around skills and training, we now have that. On the back of the report, the Acting Prime Minister referred to that too, has only been able to come to fruition through active cooperation between the state government and the Commonwealth. One other number- and I'm reticent to talk about numbers because they don't really depict the human element of this- but there is now $58 million of new money between the Commonwealth and the state government specifically orientated towards new training programs that have been announced today to train up the workforce of tomorrow. So today, we announce one of the biggest land swaps between the state government and the Commonwealth in our history, to build nuclear submarines and realize ambitions around housing and renewable energy project. And then on top of that, release the most comprehensive report, and endeavour for the skills development that is going to be required for shipbuilding and submarine building into our state of the future. This is a big deal. Both metaphorically and literally, we're very excited about it. And I really do want to thank the Deputy Prime Minister, for his engagement over this project, we wouldn't be here today without his leadership. And I really do appreciate it, along with everybody else within the bureaucracy that's worked so hard to achieve this. Can I give a quick shout out to Renewal SA at the Department of Innovation and Skills, Renewal SA leading the way on the land swap, DIS leading the way from state government in regards to the trading plan. I do want to thank those officials. I've been demanding on these two projects, independently from each other, so apologies to all those officials that have been on the end of my relentless questioning about where this program of work is at but I'm very grateful for your hard work. And it's led us to where we are today. So thank you.

VICE AMDIRAL JONATHAN MEAD: Seven days ago, the Deputy Prime Minister and myself were in the UK talking to key officials about infrastructure and workforce. So it's great to be back here at Osborne, one week later to see the sort of declaration of very two important initiatives; the land swap and also the workforce plan that the Commonwealth engaged with the South Australian Government. And this is on top of all the work that's being done right now, over in Western Australia, at Henderson at HMAS Stirling. In order for Australia to host US Virginia class submarines in 2027 and UK nuclear powered submarines. Obviously, they intend to be sovereign rating in the 2030s when we acquire our nuclear powered submarines. And then phase three of the program which has already started, and started through the initiatives as it just announced today, in order to build a shipyard here to employ thousands of people and to commence building SSN-AUKUS by the end of this decade, and had the delivery of that capability by early 2040s. So this is a very historic day. We're making real progress into the AUKUS program. Can I thank everyone for their efforts.

JOURNALIST: Acting Prime Minister, can I get you to put your Defence Minister’s hat on here? And what planning has been done with regards to getting army off the Keswick barracks? And how quickly is that going to happen? So the state government can get control of it?

MARLES: Yeah, it’s a good question. So what will happen is the barracks will transition in terms of ownership to the state government very quickly- in a matter of weeks. There will then be at lease back to the Commonwealth Government, which will allow a more smoother transition of those people who are currently on Keswick to different sites. That will happen over the course of three years. There is an option for elements of it which might take longer to go for longer, but fundamentally put both Smithfield and Keswick there is this leaseback arrangement which provides for a three year transition.

JOURNALIST: So there will be no building on those sites until the end of that three year period when these troops have been moved off?

MARLES: I think that’s right.

JOURNALIST: What about the Cultana land, is that the first tranche? You were speaking about two tranches in terms of the release of land?

MARLES: I think there are- it's both actually is the answer that question. But that will be in the hands of the South Australian government in total, within the period of five months, which allows the pathway down the establishment of the hydrogen precinct.

JOURNALIST: On the land that the federal governments acquired, how quickly can we start seeing building there for this academy?

MARLES: We will be- critical to this is having access to this land immediately. And we will have, again most of the land in place in a matter of a few weeks, but all of it within five months, and you will see building happening then as soon as possible after that. I mean, the reason we want to do this as quickly as we can, so we can actually get cracking in terms of both the design and build of the production line, but also the design and build of the skills Academy.

JOURNALIST: Can I ask about the US part of the AUKUS agreement? And can you confirm that the first new Virginia Class submarine will be purchased in 2038? With the second hand purchases happening in 2032? And 20? Sorry, 20. Sorry, let me get that right; 2032 and 2035. And why is this information coming out of the United States and not out of the Australian government?

MARLES: The first of the Virginia class submarines, as we announced back in March of last year will be in Australian hands with an Australian flag in the early 2030s. And, and they will then be a drumbeat of a few years after- per submarine after that, but it is essentially 10 years from now that we will see an Australian flag-Virginia Class submarine operating out of HMAS Stirling in Perth.

JOURNALIST: And that for that timeframe is consistent-

MARLES: Totally.

JOURNALIST: You're saying- 2032, 2035, 2038-

MARLES: I'm not contradicting it.

JOURNALIST: In regards to the frigates, can you rule out the frigates being built in Scotland, potentially the number of frigates here being cut back?

MARLES: So let me answer that in a little detail. Coming out of the Defence Strategic Review, we initiated a short sharp review into our surface fleet where with the government received the report of that at the end of September. We have some time, not a lot of time, but we have some time to consider that report. And we are going to take that time. And we will announce the government's response to the report in the very first part of next year and the first quarter-

JOURNALIST: And does that report recommend building frigates in Scotland?

MARLES: Well, I'm not going to I'm not going to pre-empt the report, but I want to say two things. One, there's no prospect of building frigates in Scotland. So I can absolutely rule that out. But the important point is that a recommendation of the Defence Strategic Review was that there be continuous naval shipbuilding in Australia, but right here at Osborne. That was a recommendation which was agreed by the government back in April. And that recommendation underpinned the work of the Surface Fleet Review. And so there will be building of surface fleet ships here at Osborne. That is something that the government committed to back in April out of the Defence Strategic Review, and that underpins the recommendations that have come through as part of the Surface Fleet Review. Now, I can't say more than that now. But we will be responding to this in the very first part of next year.


JOURNALIST: …Have a guarantee or commitment to doing that replacement program in Adelaide to maintain the continuous build.

MARLES: Yes. I mean, but let me answer it in this way-


MARLES: I don't want to pre-empt the review. So I'm not answering that part of your question. But the part of the question around will there be continuous shipbuilding here in Adelaide indefinitely? The answer that is absolutely yes. That is the recommendation that was made by the Defence Strategic Review. That is what we have committed to. And that premise underpin the review that was undertaken by the Surface Fleet Reviewers.


MARLES: Well, again, I'm not going to pre-empt it. You can do your own sums in terms of the existing timeframe of the build of Hunter. The important point to make is this: continuous naval shipbuilding here at Osborne is a national asset. That's why the recommendation was made of the Defence Strategic Review. And that's why the government agreed to it. And at the heart of that asset is its workforce. I mean, the workforce and the skills that they have right now are absolutely critical. And so that forms the central part of the thinking of the review and the government's response.

JOURNALIST: Couple of questions on the high court's decision around detention-

MARLES: I will answer them. But perhaps if we can just do any more in this space, while the Vice Admiral is here.

JOURNALIST: Very briefly, one more on the frigates then have the displacement issues with the Hunter Class boat been finalised and sorted out with BAE and Naval?

MARLES: The displacement issues-

JOURNALIST: Yeah, whether it's an 8,000 tonne ship or 10,000 tonne ship, have those problems been sorted out?

MARLES: We have seen issues around the Hunter program, which have been well ventilated, under the former government, and they were issues that we inherited when we came to office in May of last year. I think it is fair to say that the work that has been done by BAE on Hunter which is happening on this day, right here is really important work and has seen much of the schedule recovered- not entirely- but much of it recovered. And we are pleased with the direction that this has taken. Some of this, of course, related to disruption as a result of the pandemic, but not all of it. I mean, there were design issues, as you've said. So we are we feel Hunter is in a better space now than it has been. And we're pleased with the direction that it's going.

JOURNALIST: Premier, on this issue before we come back to- just in terms of the work obviously three years away before you can do anything on, at Keswick and Smithfield will you immediately put that out to tender in terms of planning for those projects and how much infrastructure is required particularly at Smithfield?

MALINAUSKAS: Okay, the short answer to your last question is that's what has to be worked on between now when the land comes out to support the land comes in possession and then we have a leaseback arrangement of the Commonwealth for three years. So, actually just to be a bit more specific, for both Keswick and Smithfield we take acquisition of the land, then we lease it back to the Commonwealth to allow them a period of time to transition what they have off those two facilities. Just the only qualification for that is that at Keswick, there was a parcel of land where the Commonwealth will retain an option to extend that out for three years to eight years, but only for a partial amount of Keswick, and that will be a function of whether or not the Commonwealth can find an appropriate home for some of those functions that are used at the army barracks, but ultimately to get all the land. The timing of that actually suits our purposes, principally because we have to do the rezoning of the land, we have to do a master plan of the land. And all that takes time, including the infrastructure planning, which will be particularly acute at Smithfield, the size of the parcel of land at Smithfield lends itself to a lot of homes, and therefore we do need to make sure we've got that right around what the impacts are on transport, education and health services. Keswick is a smaller parcel of land, but that lends itself to a more medium density development. But that's going to be done through a master planned environment. It's obviously in immediate proximity or nearly adjacent to the new Showgrounds train station. So public transport is covered off on. But what will happen between now and when the Commonwealth has their lease end on the site will be us give us time to do that infrastructure master planning and having rezoning exercise.

JOURNALIST: Acting Prime Minister, sorry, for your Premier sorry. What did you make of the Acting Prime Minister's comments around the future of naval shipbuilding?

MALINAUSKAS: Well the Acting Prime Minister has made an important announcement in his remarks that I think are noteworthy and that is the ruling out of building the frigates in Scotland which I know was home to lots of spurious speculation last week that was unsourced. So I welcome the Acting Prime Minister's remarks in that regard. And can I say this: I think that serves as a, I think there's a lesson to be learnt out of this for the media. We're not the media, but for us more broadly, collectively, and it is that every time an unsourced rumour gets reported on, it creates uncertainty unnecessarily. So the Deputy Prime Minister has ruled that out, which just I think demonstrates that the commitment to surface shipbuilding here in South Australia was real. It was a recommendation out of the Defence Strategic Review that the Commonwealth has accepted. As you all know, and certainly, as the Deputy Prime Minister knows, I have been advocating for that report to be responded to as quickly as possible, because that does give another layer of certainty to the community, particularly when it comes to the building up of the workforce that we require. But today, we're announcing a land swap, to build a submarines and a brand new academy in conjunction with the Commonwealth, a massive funding of the training that is required to the workforce of tomorrow. So this work is happening, it is real. And what we've got to do as a state is approach this project, not just with a sense of entitlement, but rather a sense of ambition. A sense of ambition that South Australia is going to be the home to building the most complex machines built in the nation's history. And that is a privilege that has been bestowed upon our state one that we have to treat seriously. Which means that we don't get too excited about unsourced rumours. And instead, we get excited about planning for tomorrow, which is exactly what the state governor is doing.

MARLES: Do want to go into the high court? We might thank Jonathan, Vice Admiral Mead for his presence here today.

JOURNALIST: So the government has no choice now but to start releasing detainees who were being held indefinitely on character grounds. How do we ensure the safety of the community as these people are released?

MARLES: How do we?

JOURNALIST: Ensure the safety of the community?

MARLES: Well, obviously, we've seen the decision of the High Court yesterday in the release of this individual and further individuals in the coming period that will release will happen under strictest possible conditions. We will, from there assess the government's position and what steps we can take going forward. Obviously, the full decision of the High Court has not yet been published. And so, in determining the way forward from here, we will do so promptly, but thoroughly to make sure that what steps are taken going forward are entirely legally robust.

JOURNALIST: Do you think this could cause angst in the community concerning the plaintiff in the High Court, because he was previous child sex offender.

MARLES: Of course, which is why in the High Court making this decision, what the government will ensure is that this release happens with the strictest possible conditions in place, but I definitely understand that.


JOURNALIST: - doing to racial Pacific island nations anxieties about nuclear submarines in the region and do you need to update the Treaty of gratitude?

MARLES: We've been engaging very closely with the countries of the Pacific Island Forum. And it is a really important question from the moment that we came to office, we have been talking to them about what we are seeking to do in acquiring nuclear powered submarine capability, but also what is our strategic intent and what will be the nuclear enterprise which surrounds that. Central to that is that we will maintain our commitments under the Treaty of Rarotonga. So treaty Rarotonga prohibits Australia from- or any treaty signatory- to basing nuclear weapons in their country. We are not doing that in Australia as part of this endeavour. We have made that clear to the countries of the Pacific Island Forum and I'm confident that that is well understood.

JOURNALIST: Can I ask about Optus. They have offered free data essentially for customers rather than money. Surely that is a joke and should heads roll at Optus, starting from the very top?

MARLES: Obviously, you know ultimately, questions of compensation arising out of the outage which occurred yesterday will unfold. We saw an outage of up to 14 hours for recipients of- of Optus customers, I should say, it occurred earlier in the week not yesterday.

But we were seeing outages of up to 14 hours for Optus customers. What is absolutely critical is that Optus makes clear to its customers. Firstly what was happened here, and the way forward. The government has instituted a review of this to make sure that we understand all the lessons that are learnt here going forward. From the government's point of view, obviously we were working with Optus from the moment that this outage was announced. We were very keen to ensure that public safety was maintained. And that's particularly around the 000 service. We were able to ensure that the procedures were in place such that Optus mobile customers were able to access 000. But for Optus, landholder, landline customers, they were not able to access the 000 number, during the outage, that's an issue as well. So we're undertaking a review to make sure that we learn the lessons here, learn the lessons for Optus but learn the lessons for all telecommunication providers in this instance. But what is absolutely essential for Optus is that they are upfront with their customers about what has actually occurred here.


MARLES: Again, I absolutely understand the concern that members of the public will have.

This is obviously a decision of the High Court. In the decision of the High Court, what the government will do everything within its power is to ensure that this release happens under the strictest possible conditions. And we will be assessing our options once the full decision of the High Court is made public and we can go through the reasoning of the court decision to work out what our next steps are but we will ensure that those steps are absolutely legally robust. Thank you.


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