Press conference, Illawarra

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The Hon Pat Conroy MP

Minister for Defence Industry

Minister for International Development and the Pacific

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(02) 6277 7840

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1 March 2024



SUBJECTS: Defence industry opportunities in the Illawarra, Israel, Surface fleet review, Security in the Pacific.

STEPHEN JONES: Well, delighted to be here, and I want to start by thanking Business Illawarra for hosting this conference. Great to have my great mate the Member for Gilmore, Fiona Phillips, here this morning, and delighted to have Minister Conroy, Minister for Defence Industry, down in the Illawarra to talk about the importance of the government’s defence program and what it means for local business and local jobs.

A little known fact to many within the Illawarra is that we already have a substantial defence industry employing over 2,000 people and generating – putting about $1.4 billion into the local economy every year. We want to grow that. The government’s got an ambitious agenda, which is about keeping Australia safe, and I’m delighted to have Pat Conroy down in the Illawarra talking to local businesses about the opportunities that are available for them.

So I’m going to throw to Pat then to Fiona, but we’re happy to take any questions after that. Thanks so much.

MINISTER FOR DEFENCE INDUSTRY PAT CONROY: Thanks, Stephen, and it’s great to be joined by my friends Fiona Phillips and Stephen Jones, who are great local voices in Canberra for the Illawarra and the South Coast.

Keeping people safe is the number one job of a Federal Government, and the Albanese government is delivering on that every day. We’re committing extra resources every day. We’ve increased the Defence budget to make sure that we keep Australia safe and that we have a prosperous future.

And you can keep Australia safe by a future made in Australia. And that’s my main message to businesses of the Illawarra and South Coast – we need you. We need you to help keep people safe. We need you to help grow the defence industry. We need you to deliver for the Australian Defence Force. Because if you don’t have an Australian Defence Force without an Australian defence industry.

And as Stephen said, there are already 2,000 workers in the Illawarra and South Coast supporting the Australian Defence Force. There’s already $1.4 billion being spent in the local economy on Defence activities. And there’s a huge [indistinct] already from the university, to BlueScope Steel, to Bisalloy which is providing armour plate right now to our Boxer combat reconnaissance vehicles being made in Brisbane, to our infantry fighting vehicles that will be made in Geelong, to the Hunter Class anti-submarine frigates. And they’re going through the certification process right now to supply steel to the nuclear-powered, conventionally armed submarines that will be the most advanced submarines in the world.

We’ll create 20,000 jobs building the most advanced submarines in the world, and many of those jobs will be here on the South Coast and the Illawarra, if we get the settings right. And that’s incredibly important. And further down the coast at Nowra we’ve got a helicopter Centre of Excellence where, in Fiona’s patch, for the first time we did deep maintenance on a US Navvy Romeo helicopter. It got its full service and deep maintenance and came out of the shed ready to go again thanks to the expertise of Nowra workers.

So my message to the people of the Illawarra and South Coast is we need you to help keep Australians safe. You’ve got a bright future. If you start in the Australian defence industry today, you’ll have a long, bright future building things, contributing to the safety and security of the country and helping raise a family at the same time. Thank you very much.

FIONA PHILLIPS: Thank you. Fiona Phillips, federal member for Gilmore. Well, it is Navy Week, and what a great time to live and work in the Shoalhaven. Of course, last night we had the reception on HMAS Albatross involving lots of serving Defence members from HMAS Albatross, HMAS Creswell and, importantly, all the lodger units and defence industry that supports HMAS Albatross.

HMAS Albatross and navy is a huge employer across the Shoalhaven, and that means a strong defence industry to support that. I am really lucky to have witnessed firsthand the amazing work our defence industry businesses and workers are doing, and they are only going to grow.

So my message today as well also on Army Day as well is to consider an Australian Defence Force career. We’re going to need more defence workers, more defence industry workers. Defence industry has a bright future.

STEPHEN JONES: Happy to take any questions now.

JOURNALIST: Pat, what exactly do you envision for the Illawarra in terms of Defence and the growth?

PAT CONROY: Well, I think there’s huge opportunities. Last year we spent $20 billion on the Australian defence industry, and every year over the forward estimates that will go up. And we need the Illawarra and South Coast industry to scale up and support us even more. And, as I said, there’s great companies already doing great work, whether it’s the manufacturers of Illawarra or in the Shoalhaven, companies like Global Defence Solutions.

So my message is exactly what this conference is about: coming together, collaborating, working on how you can support each other. And it’s not just for our Defence projects; we’re also looking at how we can supply to our AUKUS partners as well. So we’ve got BlueScope Steel here, we’ve got Bisalloy. So my message is keep doing what you’re doing. Scale up. The Australian Government is spending record amounts on defence industry, and there’s a right future for the workers and companies of this area.

JOURNALIST: Minister, [indistinct] Illawarra, which up to the last election was a leading candidate for a new submarine base. Is the government still assessing potential sites on the east coast and, if so, how far north?

PAT CONROY: Well, we’ve been very frank that that was the last government’s process. We’ve instituted our own process to identify where an east coast submarine base would be located. At the moment we’re focused on the key initial steps of the submarine project, which is upgrading HMAS Stirling in WA to host visiting US and UK submarines from 2027 onwards and designing and constructing the submarine construction yard at Osborne in South Australia. They’re our two key priorities.

We think there’s a bit more time to decide where the east coast base is. I’m just going to do it in a proper, rational, considered way rather than throwing options out there willy-nilly, which is what the last government did.

JOURNALIST: Do you have a sense of what that time line is?

PAT CONROY: We’ve made it very clear that it’s some years off. We’re focused on getting the submarine project working to accept visiting US and UK submarines, to accept our first Virginia Class submarine in the early 2030s, which will be based in WA, and building the construction yard. That’s our key priorities. If we don’t do that, nothing else really matters to be quite frank, because we won’t have submarines to base somewhere.

JOURNALIST: Do you expect a decision before the 2030s about the east coast sub base?

PAT CONROY: I’m not going to be drawn on exact timing there.

JOURNALIST: This week we’ve seen confirmation that Israeli company Elbit has been awarded an almost $1 billion contract for work on Australian military fighting vehicles. Given the war in Gaza, do you think this will be supported by Labor voters?

PAT CONROY: Well, let’s be very clear what’s occurred – that particular company is a subcontractor to Hanwha Industries. Hanwha won the tender to produce the infantry fighting vehicle in Geelong, 129 of the most advanced infantry fighting vehicles in the world, using steel supplied by Bisalloy here in this region. So it’s a great project that will support over a thousand jobs. So that company is a subcontractor.

There are many companies around the world that supply the Australian defence industry. I think to your broader question, I want to keep combating misinformation. Australia has not supplied a single weapon to Israel for the last five years – for the last five years. I know there’s lots of rubbish flying around that things have been sent over there. For the last five years we have not sent over a single weapon to Israel, and I think that’s what people have been asking questions about.

JOURNALIST: What about armour, though?

PAT CONROY: Armour? As in?

JOURNALIST: As in we have a local contractor here in terms of Bisalloy that supplies certain products to the Israeli Defence Force.

PAT CONROY: Well, again, let me repeat: we have not exported a single weapon to Israel for the last five years.

JOURNALIST: But we’re seeing companies like Bisalloy attacked because of the perception, there’s been upset in the community about it. So there is a perception that there is involvement.

PAT CONROY: And that’s why I’ve been so strong in clarifying today. I think there’s been some groups out there that have been taking advantage of the current situation for their own political ends at both ends of the spectrum. And we call for social cohesion. It’s really important that Australians come together in these really traumatic times and look after each other. But, again, there isn’t a single export going to Israel of a weapons system.

JOURNALIST: Maybe for Stephen and Fiona: there will be voters outside protesting Defence. What would you say to them?

STEPHEN JONES: Look, I can’t remember a time over the last 30 years that I’ve been involved in politics in this town where there hasn’t been a protest going on somewhere. Often I’ve been a part of it. So welcome the fact that people are out there expressing their views. They’re doing it peacefully. I walked through and said hello to them on the way through.

The key message that we have today is that there are great opportunities here in the Illawarra. We’ve got an important job to do as a government. The important job we’ve got to do is ensure that we are investing in the capability that keeps our people and our region safe. We are adamant that we’re going to do it. No protests, nothing is going to stop us or waiver us from the course of keeping our people safe and building up the capability that we need to ensure we can do that.

And I tell you what – if we didn’t do that we’d be negligent. So we’ll be doing that. We won’t be shaken from our course. Quite happy to engage with people who have got strong views about all sorts of things. But we’ve got a job to do in keeping the country safe. And, frankly, if there are jobs and economic opportunities that are available as a result of that, I want them here in the Illawarra. I want them here on the South Coast, and I’m sure you’d be the same, Fiona.

JOURNALIST: Just a question about the future surface fleet review that came out [indistinct]. The [indistinct] prioritised speed of the delivery of some of those platforms versus making those locally. Will the Illawarra businesses have to wait to be able to supply into some of those programs now that the government has reviewed that structure?

PAT CONROY: Not at all, because there’s two factors that drove the decision to have the first three of an 11-ship class of general purpose frigates built in an existing production yard. The first factor is obviously speed. This will be the fastest acquisition in living memory for a major surface combatant because of the strategic circumstances.

We’ll be identifying the ship and the builder next year. We’ll be cutting steel in 2026 with the first one to be delivered in 2029. And that is critical for our strategic circumstances.

The other reason we’ve gone with a hybrid build where the first three in an existing yard and then the final eight are being built in Western Australia is that the shipyard in Western Australia, Henderson Maritime Precinct, will be busy with other projects that we need urgently. So they’re building two more patrol boats for us right now. Then we’ve brought forward by two years the construction of landing craft medium for the Australian army, and we brought forward by seven years the construction of landing craft heavy, which are giant vessels to transport the army.

The DSR – the Defence Strategic Review – found that we need to transform the Australian Army into one suited for it’s called littoral manoeuvre, which means moving around the juncture of the land and sea. To do that you need advanced landing craft. They’re being built in the west right now. And the design and process for continuous naval shipbuilding so that when we come towards the end of the landing craft heavy project they will need to start building the large general purpose frigates that are a key part of us more than doubling the size of the Royal Australian Navy surface combatant fleet. And then after the general purpose frigates, they will build the large optionally crewed surface vessels.

So my message to the steelmakers of the Illawarra is there’s going to be so much demand for our plans to increase the size of the fleet to 26 major warships that there’s a long future in supplying the Australian naval ship building industry.

JOURNALIST: But to get to that point in time, we’ve had a number of reviews done and time lines have been pushed back on various projects. How can local businesses that are interested in supplying Defence sustain themselves [indistinct] 10-year time frame before they’re actually going to get on order?

PAT CONROY: Well, again, there are orders that they can compete for right now or coming very soon. Those landing craft, to give you an example, the landing craft medium, they are around a 5 to 600-tonne vessel, and we’re getting 18 of those. After that the landing craft heavy, they’re going to weigh between 3 and 5,000 tonnes. That’s almost the size of an air warfare destroyer, and we’re going to need eight of those. They’re all going to need steel. I haven’t seen a proposal that involves aluminium. Most of the tenders will involve steel, and the best place to get that steel – and it’s hard for me to say as an Novacastrian – is from the Illawarra. So, yes, I’m getting a lot of support for that behind me.

So there’s going to be a lot of demand from the naval shipbuilding industry for Illawarra steel. And it’s not just those projects; we’ll be signing the contract this year and beginning production of six Hunter Class anti-submarine warfare frigates. They are very large vessels – think 8 to 10,000 tonnes. That’s going to be a lot of steel being supplied out of BlueScope. So there’s great future for the industry.

JOURNALIST: On that surface fleet review, that is the Chief of Navy given assurances to you that the new fleet of frigates Australia will require will not be significantly changed for whichever design is chosen?

PAT CONROY: He said publicly, I said publicly, the Deputy Prime Minister has said it publicly – our commitment, the only way we can deliver them at speed is no change or as little change as necessary to satisfy Australian regulatory conditions. There will not be Australian [indistinct] of these frigates. We’re going to get an existing frigate off an existing production line, because that’s the only way we can ensure we get the first one by the end of the decade. And then we’ll move the production to Australia where we can produce them in this country.

One of the lessons from successful Defence projects in the past, for example, the Anzac class frigate, is when you get a long production you give certainty to Australian industry and why can build faster and cheaper than anywhere else in the world. And we will deliver those Anzac class frigates faster and cheaper than their home country.

JOURNALIST: Just with your Pacific Minister hat on, Reuters reported last week that the Chinese police have now embedded a training or assistance team in Kiribati [indistinct]. Is this something the government is aware of or has been tracking?

PAT CONROY: Well, look, we’ve been very clear that China is seeking to increase its – or seeking to provide policing services or policing support in the Pacific as part of their broader ambitions in the region. We made it very clear that, as consistent with the 2022 Pacific Islands Forum communique that Pacific countries should look to the Pacific first for any gaps in security, and we don’t think there is a role for China in policing in the Pacific.

We stand ready to support – we are the primary security partner for almost every Pacific island nation with the exception of probably some of the countries that have close relationships with the United States or New Zealand. And we’re proud to have that role and we’ll continue to provide that support. We announced the $1.4 billion Pacific Security Package out of last year’s budget. As part of the bilateral security agreement we signed with Prime Minister Marape of Papua New Guinea in December we announced the $200 million BSA implementation package, which went to policing and security and law and order. We’re humbled and privileged to be the security partner of choice for the Pacific, and we’ll continue to do so.

JOURNALIST: But on this specific issue, have you been tracking it, and are Australian officials raising concerns with you about it potentially happening?

PAT CONROY: We’re aware of it, and we’ve got a number of projects in Kiribati supporting the police of that nation right now.

SPEAKER: Guys, we’ll have to wrap up soon. Sorry.

PAT CONROY: I think we’re all done.


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