Press Conference, Osborne Shipyard, Adelaide

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

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21 June 2024

SUBJECT/s: Hunter class frigates; China- Philippines military interaction; Nuclear energy 

MARK BUTLER, MEMBER FOR PORT ADELAIDE: Here at Osborne has been such a great jobs generator as well as underpinning national security for Australia for decades, and it's only ever happened through really strong cooperation between the South Australian Government and the Government in Canberra. 

You see that going back to John Bannon, the work of Kim Beazley as the Minister for Defence and my predecessor as the member for Port Adelaide, Mick Young, such strong advocates not only of the national security benefits of good projects down here in Port Adelaide, but also the economic prosperity that comes to South Australia. And you see that again, in the really close cooperation between our two Governments, but particularly between Premier Malinauskus and the Deputy Prime Minister of Australia Richard Marles. So it's a great pleasure and a really is a very exciting day for our community here in the western suburbs of Adelaide. And I am delighted to have to Premier Malinauskus.

PETER MALINAUKUS, PREMIER OF SOUTH AUSTRALIA: Thanks very much, Mark. It's great to be here with you and the Deputy Prime Minister, along with Minister Farrell, despite the tie. Mr. Farrell has been known for his political courage, but wearing that tie up here on the peninsula has taken it to a new level. It's also really special to be here with my friend, the Treasurer of South Australia, and also the Minister for Defence and Space Industries. 

This is an important occasion. It's an important occasion for the state of South Australia, because the Frigate program here at Osborne has been a work in progress now for some time. And today, represents the final milestone to be met before people can approach their future with absolute certainty here at BAE systems, the 3000 plus people that will be direct employees working on the Hunter program, they can look forward to the future with their careers assured forevermore. But not just careers for them, but careers for their children and their children. And for our state, that means a lot. 

The opportunities that we've got before us in South Australia are very real and they're now coming to fruition. And the Hunter program represents just the beginning. 

It's also a really important day for the nation. And I want to take the opportunity to acknowledge Vice Admiral here Chief of Navy Mark Hammond, because South Australia has the opportunity to be able to produce a world class warship, for the people of Australia, and their defence. But the real privilege, of course, is vested in those people that will be working on this boat. They pay an enormous sacrifice in the name of keeping all of us safe. And I think they can have great confidence that the whole nation is behind this program and acknowledge that we want to give them the best that they deserve the best that Australia can provide in their important mission. And I want to thank the Vice Admiral and all of the men and women that serve our nation, in the name of our safety for the sacrifices that they will make and they hopefully have a lot of confidence that everyone in this state will be doing their level best that in keeping us safe we’ve built a machine that will keep them safe, as well. 

We're excited about the future and we're particularly excited about the partnership we've also got with BAE Systems, and to Ben and Craig and the whole team thank you for your partnership with the State Government and that is one we look forward to developing over the years ahead as well. Thanks.

RICHARD MARLES, DEPUTY PRIME MINISTER: Can I acknowledge country and my ministerial colleagues Don Farrell and Mark Butler and of course Mark is also the local member here. Can I acknowledge our partners in so much of what we do; the South Australian Government and its Premier my good friend Peter Malinauskus and treasurer, Stephen Mullighan. Can I also acknowledge our Chief of Navy Vice Admiral Mark Hammond, representatives of BAE who have done such a fantastic job in getting us to this point and we have the utmost confidence of BAE being a prime contractor for the building of the Hunter Class Frigates. Ben Hudson and Craig Lockhart who are here, Vikki Treadell the British High Commissioner, it is great to have all of you here today on what is a great day for the Royal Australian Navy. 

But what is a great day for the Australian Defence Force. As of now HMAS Hunter is being built, having signed the contract for the first 3 Hunter class vessels. What we have now seen just today is the first cutting of steel under that contract and it is a huge moment in the journey towards the building of six Hunter class frigates, which will be the cornerstone of our Navy's combatant surface fleet. 

This will be the most exquisite undersea warfare capability that will exist anywhere in the world and it will exist in the Royal Australian Navy. This will be the quietest ship on the high seas and because of that, it will have the highest technology on it. And we are enormously excited about what this will represent in terms of a jump in Australia's military capability. 

Of course, what this also represents is a huge opportunity for South Australian industry and in fact Australian industry. In over the building of the Hunter class frigates on average, we will see 2500 people here at the Osborne Naval Shipyard participating in the building of these ships at its peak, it'll be in fact 3000 people. And when you combine that with those who will be building our nuclear powered submarines, those who are currently engaged in full cycle docking of our Collins class submarines and what will quickly transform into the life of type extension of the Collins, this will be a shipyard that will have something in the order of 7000 workers. And these are going to be fantastic jobs, they're high tech jobs. This will be the highest tech manufacturing, which will occur anywhere in Australia, and in many respects, will be as high tech manufacturing as occurs anywhere in the world. I've had the opportunity of visiting the Govan shipyard in Glasgow, where BAE make the type 26, which is the sister ship of the Hunter class frigates for the Royal Navy. And it is a very impressive facility but what we have around us right now is very much the equal of that, if not the better. In fact Ben and Craig often say that when their colleagues from BAE come here and look at this facility in Adelaide they do so with an enormous amount of envy about the capability that is being developed here and the way in which we are being able to put that together in producing the first of the Hunter class vessels. 

And so today is a huge day for our Navy. But in acknowledging that I want to give thanks to South Australian Government, to BAE, of course to the entire workforce, who are part of this endeavour, it is going to be a great opportunity for them but their service is building capability for our nation. And in the process of building that capability is doing so in a way which will contribute to the safety of Australians in the future. And for that we owe them a deep sense of gratitude. Thank you. 

VICE ADMIRAL MARK HAMMOND, CHIEF OF NAVY: Oh, what a great Navy Day. Any day we cut steel on the first of class of a warship for the Royal Australian Navy is indeed a great navy day. But these, as Scott mentioned are so much more than the steel castles that they turn out to be. This will be another floating embassy operated by the Australian Defence Force which will represent every Australian across the region and around the world for many years to come. It will be capable of the full range of naval missions. 

From deterrence diplomacy right through the defence of Australia if need be. She will represent the safe haven for mariners under distress on the high seas. She will represent Australia throughout the region, and she will represent home for the sailors and officers of the future. To our partners from BAE congratulations on an outstanding design. Thank you for your partnership as we work through the challenges with production optimization and design. And I have every confidence that this will be one of the most capable anti-submarine warfare frigates in the world. It derives its DNA from the Type 23 frigate, one of the most successful Cold War anti-submarine frigates in history. And that lineage extending through the Type 26 to the Hunter is something that I'm confident will serve Australia very, very well. 

So to all of those involved in the project today, thank you so much for your service to our Navy and our nation, to the men and women here in Port Adelaide, the great city of Port Adelaide, thank you so much for the support to your Navy and our nation, and to all those involved in construction of what will be one of the most potent warships in the world. Thank you. I look forward to celebrating more milestones in this project in the future. 

MARLES: We’re happy to take questions. 

JOURNALIST: Given the contract has only been signed on the first three frigates, should we have any concerns about the other three? 

MARLES: No, I mean, we've made a decision in February of this year that there will be six Hunter class frigates which form part of Navy’s surface combatant fleet. The typical way in which we contract these things is in a stage by stage way and this first stage is for the first three. And that's very normal in the way in which programs that this kind of contracted. It is a significant moment, of course, because what this represents is the transition from design and prototype to actually building HMAS Hunter, which is what we've done now. But it is really just the normal way in which contracting occurs.

JOURNALIST: Are there any negotiations continuing with regards to price on the first three vessels?

MARLES: That forms part of the price, the contract that's been signed. But again, I point out that this is a program which is really a partnership which is going to go over a long period of time, it needs to be a partnership. So we haven't just gone out and bought a car here. This is a partnership which will see thousands of people working in the building of six Hunter class frigates over many, many years. And so there will be an ongoing negotiation around what prices look like for vessels in the future. But that pricing negotiation has been happening, we're really comfortable with where we're at, we are really confident about getting value for money for the public dollar. And this is going to be an exquisite capability that the Royal Australian Navy will now have.

JOURNALIST: Is there a chance that it’s going to explode in the next three, that the price will go up, that the with the budget will blow out for the next three [frigates]?

MARLES: We are working very closely with BAE and we could not be happier with where this program is now at in terms of those negotiations and in terms of the way this is proceeding. I want to be really clear that since coming to power, the Albanese government has been working hand in glove with BAE and we are now at a point where this program is doing well. I mean, the consistent reporting in relation to how the program is going is that we are maintaining the timeframes that we inherited and we are doing so in a way which is also maintaining the budget. So we have a real sense of confidence now.

JOURNALIST: When do you expect to make decisions about what follows these six ships, the next stage, what follows these six ships?

MARLES: Look, that'll be a decision that will be made in due course. So certain decisions have been made, which is that in terms of what will happen here at Osborne if by the time these six ships have been built, what will succeed them in terms of the work that will happen Osborne will be the replacements of the air warfare destroyers that we have in service right now. So with these six ships are completed, we will be at a point in time where we will need to be building the next generation of the air warfare destroyers. And so the point about that is and it's a good question, because what we have done in the commitment to building Australia's surface fleet is also a commitment to establishing continuous naval shipbuilding here at Osborne. That's the way in which we build capability which delivers value for money. So there will be building of ships, surface ships, here at Osborne in an ongoing way forever, that is the intention.

JOURNALIST: When do you expect to make decisions about what those are?

MARLES: Those decisions are a fair way down the track. I mean, the first of the Hunter class vessels, HMAS Hunter, will be delivered to the Navy in 2032 to be operational in 2034. There are then five further Hunter class vessels that will be delivered after that. So the building of the replacement of the air warfare destroyers is literally decades down the track. So we have time to make that decision. But it is really important to understand that we have already made the decision that that is what will occur and that is what will succeed these six ships so that there is an ongoing pipeline of work in terms of building surface ships here at the Osborne naval shipyard.

JOURNALIST: A couple of questions on DefendTex if I can. They've been waiting 18 months for the government to find out if they'll be receiving $70 million needed to buy a Brazilian missile company. There’s only nine days left to make that decision. Will the government be giving them the funding and if not why?

MARLES: Look, I'm not going to comment on that.

JOURNALIST: Is there any concern that China may find companies that have shown interest?

MARLES: Again, I’m not going to make a comment on that.

JOURNALIST:  Minister can I ask you about whether you've received any briefings with regards to the AOR vessels, the supply ships that have been hit by troubles and are you concerned about any impact on their ability to deploy at the moment?

MARLES: So I've had the briefest of briefings, if I can put it that way, and Admiral Hammond may want to make some comments in relation to the specifics of HMAS Supply and HMAS Stalwart. HMAS Supply has had issues which have been public and are well known. HMAS Supply in Sydney right now. And earlier in the year, we sought advice from the Navy about the progress of remediating those issues and when we could expect HMAS Supply to be operational. In the last few weeks, we have become aware of now issues with HMAS Stalwart which is the other supply ship. So that forms part of the same capability. HMAS Stalwart is currently in Darwin. The picture in respect of the issues around HMAS Stalwart has been emerging over the last couple of weeks. And my advice on this day, is that HMAS Stalwart not operational. Now, obviously, that does then raise questions given the both ships in the class are not able to operate at this moment. I've spoken with the Chief of Navy, sought advice from him about when we can expect HMAS Stalwart and, of course, HMAS Supply to be in a position to operate again. And what we need to do in the meantime to make sure that the functions that were being performed by those ships are able to be met. So this, as I say, it's been an emerging issue over the last couple of weeks. Obviously, we do now have an issue and we will be seeking that advice from the Chief of Navy.

JOURNALIST: How do you deal with this, this gap in capability which is clearly present?

HAMMOND: Firstly HMAS Stalwart is alongside in Darwin. She completed a period of operational assignment and border protection duties, she completed that mission, and during transit to Darwin for a scheduled port visit the current issues that we are investigating arose. The next [inaudible] is a maintenance period back in Perth so we’re just going to step through the technical investigation, go through the defect rectification and then we'll get her home to home port. I can assure you that our people are in good shape. The warrant officer of the Navy has been up there visiting and talking to them in the last 24 hours. And my folks [inaudible] understanding of the issue, returning the ship to safe operation and getting back to home port.

JOURNALIST: How frustrating is it? These are two of the newest ships in the fleet that you've been beset by problems like this.

HAMMOND: As I stated at Senate estimates about two weeks ago, I'm not happy with the availability of HMAS Supply, in particular. I'm tempering that with an understanding it is a first-of-class vessel, it was built during the pandemic over in Spain. And I'm comfortable that Navantia are working with us on understanding the issues and rectifying.

JOURNALIST: Just relating to the sight of the future nuclear shipyard and your Labor and union colleagues? Obviously they’re sharing Facebook memes and social media memes of animals relating to nuclear. Do they need to grow up fast or [inaudible] of risk?

MARLES: Well, look, we're really confident about the delivery of nuclear-powered submarines here at the Osborne naval shipyard. And it is going to be a fantastic program. And obviously it will be done safely. I’ve heard commentary in the media today about scare campaigns, we certainly are not going to be taking any lectures from Peter Dutton and the Liberal Party about scare campaigns. They are literally the masters of that. But I think the point that needs to be made, in terms of what has been announced by the leader of the opposition, by the Liberal Party in relation to this program, is that at a moment in time, when energy costs are the issue at hand, when cost of living is what our government is spending so much time dealing with, that the Liberal Party are now walking down the path of the single most expensive source of energy that is available today. And what the CSIRO have made clear, and this is bringing science to bear, is that nuclear energy is something like eight times the cost of renewable energy. And Peter Dutton has announced a plan, where he's not been able to tell the Australian people how much it will cost, when it will occur or even how much power will be generated by these plants. That is not policy. That is just policy on the run. Since coming to power, we have focused on getting renewable energy into the grid. That is the cheapest form of energy that can be found today. 25% more renewables are in the grid now since the Albanese government came to power. In the last year we've seen 330,000 households put in place solar within their households, that is making a difference in terms of reducing power prices for Australian people. And it's in the face of that, that Australians rightly should be asking Peter Dutton a question about what is policy will actually mean in terms of their power prices. Government

JOURNALIST: The federal government seems to be more scathing in terms of nuclear energy in general, calling it policy madness, whereas our premier has been more measured in his response. I’m only talking about the economic impact, not talking about the benefit of nuclear energy, potentially. Have you spoken to our premier about toning down his language on the nuclear front?

MARLES: I have never given any advice to the premier about any language, I can assure you of that. We're simply making the point in relation to what has been announced by the Liberal Party that it is the most costly form of energy. But in their announcement, they've been unable to explain cost, timing or even the amount of power that is going to be generated. And that is the fundamental point that we are making about the Liberals’ announcement. I mean, this is an announcement which has the barest of details and simply doesn't explain to the Australian people how this is going to make any contribution to lowering their power bills, or indeed, any meaningful contribution between now and 2050 to reducing our country's emissions.

JOURNALIST: [inaudible] putting up pictures of three eyed fish?

MARLES: We’re not going to take lectures from a Liberal Party around issues of scare campaigns. I mean, they are literally the masters of the art when it comes to scare campaigns. The CSIRO has brought science to bear in making clear that nuclear energy is eight times the cost of renewable energy. And it's a fact. And they're the facts that the Peter Dutton needs to answer.

JOURNALIST: But do these scare campaigns muddy the waters because you're talking about it not stacking up financially, but these scare campaign in terms of potential safety issues surrounding nuclear energy. So is there a disconnect between you saying it's going to cost too much and other premiers and union types saying this is potentially going to be dangerous?

MARLES: Well I think we've been really consistent in the messages that we've been articulating about the fact that Peter Dutton has failed to answer the question on cost, on timing, on even the fundamental about how much power will actually be contributed to the grid by his plan. And that is the point that we have consistently made. And if people want to ask questions about scare campaigns, the first port of call there is Peter Dutton.

JOURNALIST: Do you endorse the memes as they relate to nuclear safety?

MARLES: I’m not going to go down that path. I mean, if people want to make an issue about scare campaigns speak to Peter Dutton. He has literally been running a scare campaign, since the moment that he became the leader of the opposition, on everything. The fundamental point here is he has announced the policy without being able to articulate how much it will cost, when it will come into being and how much power will actually be generated by this policy. They are fundamental questions which he needs to answer for the Australian people. One of the proposed

JOURNALIST: One of the proposed designs is at Mount Piper for Sydney, it sits on top of the Warragamba Dam catchment, should Sydney with all its drinking water be worried about potential safety risk there?

MARLES: Again, this is not our plan, this is Peter Dutton’s plan. And these are all questions that Peter only can answer. But we come back to the point that we're making. Hasn't been able to explain cost. Hasn't been able to explain timing. Hasn't even been able to explain how much power will be generated.

JOURNALIST: On social media, should companies be doing more to counter mis- and disinformation and protect children?

MARLES: The premier may want to say something on this but can I start by just acknowledging Premier Malinauskas’s leadership here, in relation to social media. I think this is an issue which has been very much on the minds of parents around Australia. In terms of the impact that social media has happening on our kids. Obviously, companies do need to be doing more in relation to the question of misinformation. I mean, we are seeing the impact of that on our children, but we're also seeing the impact of that in our public discourse and, ultimately, on our democracy.

JOURNALIST: Earlier this week, Chinese Coast Guard officers border the Philippine vessel brandishing bladed weapons. I was wondering if you saw this as sort of a major escalation?

MARLES: Australia's national interest lies in the maintenance of the global rules-based order. And that very much includes freedom of navigation, concepts like that, and the UN Convention on the Law of the Sea. We are invested in that because as an island trading nation our connection with the world is based on our sea lines of communication. We literally need freedom of navigation on the high seas for our prosperity and our security. Now, we have stood with the Philippines in asserting this because their national interest is exactly the same. We have made very clear that the rules-based order, freedom of navigation, the rules as we understand them under the UN Convention on the Law of the Sea must be applied everywhere, and that includes the West Philippine Sea.


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