Radio Interview, ABC Perth Mornings with Nadia Mitsopolos

SUBJECT: Japan announced as builder of Australia’s new Mogami-class frigate. 

NADIA MITSOPOULOS: Now, the big announcement this morning is that the Federal Government has chosen a Japanese shipbuilder called Mitsubishi Heavy Industries to build the Australian Navy's new $10 billion fleet of warships. The first three figates - three frigates will be built in Japan. The remaining eight will be built right here in Perth. So why pick Japan? What does this mean for WA? Well, have a listen to Pat Conroy, he is the Minister for Defence Industry and I've just spoken to him about this.

MINISTER FOR DEFENCE INDUSTRY PAT CONROY: Good morning, Nadia.

NADIA MITSOPOULOS: Why have you chosen Japan over Germany to build these warships?

MINISTER CONROY: Well, the Mogami-class frigate was the clear winner on cost, on schedule, so speed to capability, and on capability itself. This was one of the most advanced, if not most advanced frigate in the world. It's a stealth frigate and it's a great day for the Australian Navy and it's an even better day for WA because it means thousands of jobs at the Henderson Maritime Precinct.

NADIA MITSOPOULOS: But isn't the - Japanese companies bid more expensive? Like, won't it be more expensive to build those frigates? 

MINISTER CONROY: No, that's not true. On acquisition cost, all three options that were considered were broadly comparable and over the whole‑of‑life cost. So, the cost of not just acquiring it but running it for 30 or 40 years, the Mogami was much cheaper. So, on cost, schedule and capability the Mogami-class frigate was the clear winner.

NADIA MITSOPOULOS: Is this also a diplomatic pick to curry favour with Japan? 

MINISTER CONROY: No, we make decisions purely on cost, schedule and capability. It obviously was a happy bonus that we will be partnering with a country we've got very strong strategic alignment with in Japan. We're doing lots with them, both industrially and in terms of military cooperation, but I want to assure your listeners that this decision was purely made on how fast the ships could be made, their capability, how effective they are as warships, and on the cost.

NADIA MITSOPOULOS: I'll get on to the timelines in a moment, Minister, but has this company ever built warships overseas before? 

MINISTER CONROY: No, that, that is obviously something that is new to them. Japan only recently altered their constitution to allow exports of military equipment. But the first three ships will be from their existing production line and we're confident that Mitsubishi Heavy Industries has the technical know‑how and the depth of experience to work with our Department of Defence to transfer production to the Henderson Precinct in WA.

NADIA MITSOPOULOS: And so an Australian company wouldn't have been able to do this? 

MINISTER CONROY: Well, one of the conditions for this design, ‑ for this project is that they come off an existing production line. We could not, could not have got the speed, which is the first one delivered in 2029 to be in service by 2030, if we decided to build all 11 of them in Australia. We just couldn't have done that, and the strategic circumstances meant that we had to go for a hybrid approach. But the intent is that an Australian company will build them in Australia when we transfer production in partnership with Mitsubishi Heavy Industries.

NADIA MITSOPOULOS: My guest this morning is Pat Conroy. He is the Federal Minister for Defence Industry. So, the first three will be built in Japan, the rest here in Perth. What does that mean for local job opportunities? 

MINISTER CONROY: Yeah, and that is obviously conditional on successful consolidation of the Henderson Maritime Precinct, which is occurring right now. This project means thousands of jobs for West Australians. It means doing some of the most advance, hi‑tech, high‑skill work in the, not just the country but the world, building the most advanced stealth frigate in the world. So this is a really good day for the WA industry as well. And it means that apprentices working in the Henderson Precinct now can know that they can work on some of the most advanced projects in the world for decades to come while putting food on their table and paying off their homes.

NADIA MITSOPOULOS: So, will Mitsubishi also be bringing some of their workers here or will they be training up local staff? 

MINISTER CONROY: The intent is to build the capability in WA to build these ships. There may be some personnel from Japan helping with the transfer.  But this is all about us committing to continuous naval shipbuilding in WA. We're the first government to ever do that, and that means providing a steady level of work across multiple projects so that the Western Australian Defence industry can build the capability and don't have to suffer the boom and bust of shipbuilding that previous governments have subjected them to.

NADIA MITSOPOULOS: So, we'd have to skill up local workers. Do we have enough to meet the demand? We have such a tight local labour market at the moment.

MINISTER CONROY: Well, we're, we're investing hundreds of millions of dollars in training workers for the Australian Defence industry. I was at a ‑ there's a great program called The School Pathways Program that's doing really great work in WA. The South‑West Metro TAFE is probably the best TAFE in the country at training maritime workers. And we've got projects going on right now, or in the planning stages, that will build the workforce. So, the intent is that the workforce capability be built up building first landing craft medium. Then they will transition to building heavy landing craft, and then the workforce will have the ability to transition to build the general-purpose frigate.

NADIA MITSOPOULOS: So, what's the timeline, Minister? When will the first be built locally and how long to get the whole fleet? 

MINISTER CONROY: Well, this is a multi-decade project. The first three vessels, the ones built in Japan, are envisaged that the third one will be delivered in 2034 which means that we will have four warships delivered compared to one under the last government for the next decade, and then the intent is to transfer production after that to Henderson. Importantly, we need Henderson to concentrate right now on building the landing craft. They're critical for transforming the Australian Army, and when that work starts to taper off is when the general-purpose frigate would start kicking in.

NADIA MITSOPOULOS: On ABC Radio Perth and WA you are listening to the Federal Minister for Defence Industry Pat Conroy. Can you tell us, Minister, a little bit more about these frigates? What are their capabilities, and why do we need them? 

MINISTER CONROY: Well, we face very challenging strategic circumstances with very significant military build‑up in our region. We inherited the oldest peacetime navy since World War II, and we are determined to more than double the navy in terms of number of surface combatants or warships and to increase their capability. The Anzacs have done great service, the Anzac-class frigates, but they're getting very old. So we announced that we would be acquiring 11 general purpose frigates as fast as possible, and that's what we've done today.

The Mogami stealth frigate is incredibly capable. As the name suggests, it's stealthy. It has a very low radar cross‑section which is great in terms of defensive capability. It has 32 missile launch cells which means it can fire 128 air defence missiles. Importantly, it also has the ability to fire the most advanced air defence missiles in the world called the SM-2 and SM-6 missiles, and even the Tomahawk cruise missile, the Tomahawk cruise missile has the ability to reach targets two and a half thousand kilometres away, whereas the Anzacs could only strike targets 275 kilometres away. So, it's almost a tenfold increase in strike distance which is very important in terms of deterring aggressors. Importantly, this ship is very automated. So, it runs on a crew of 90 compared to the Anzac crew of 170. So that's good in terms of staffing them. And it has a range of 10,000 nautical miles compared to 6,000 nautical miles for the Anzacs. So, it's bigger, it has a bigger range, more advanced weapons, radars and sensors, and has a crew almost half the size. So, I'm very confident in saying this is amongst the most advanced, if not the most advanced, frigate in the world.

NADIA MITSOPOULOS: And Minister, Peter Dutton said China was Australia's biggest threat. Do you agree, and is that still the case? 

MINISTER CONROY: Well, we've made it very clear that we face very challenging strategic circumstances. We've,‑ we've said publicly that there's a regional arms race going on and China is part of that, and we've said very clearly publicly and privately that China needs to provide more transparency in its rapid build‑up of its military force. But this is about making Australia safer and giving the Royal Australian Navy the warships to defend Australia and deter any aggression. The best way of guaranteeing peace is having a well‑equipped Australian Defence Force that deters conflict. So, this is about making Australia safer with the added bonus of tens of thousands of jobs for the West Australian workforce.

NADIA MITSOPOULOS: Is WA vulnerable, given, you know, our resource industry and some important infrastructure in the north of the state? 

MINISTER CONROY: I'm not, I don't think that's a conversation that's particularly useful to have in the public, but I just make the point that we've also committed to hardening our northern bases. That means giving them a better, sort of, infrastructure so they can survive any potential attack. But the whole point of this is to deter and avoid war, not contemplate it, and that's why this investment's so important.

NADIA MITSOPOULOS: And, finally, Minister, any guardrails around cost blowouts and timeline blowouts because history does show Defence projects do blow out? 

MINISTER CONROY: Well, we, we've learned from the mistakes of the Coalition Government where they made a huge number of changes to the Hunter-class Frigate Project which led to, as you said, billions of dollars of cost blowouts and schedule blowouts that we're now fixing. So, the greatest guaranteeing guardrail is a government that's learned those lessons and have said very clearly, very little change. 

So the only changes to this frigate that are being contemplated is translating the Combat Management System into English and anything else that's required by law around Australian seaworthiness and safety standards; and even those changes have to be signed off by the secretary of the department and the Chief of the Defence Force in consultation with myself and the Deputy Prime Minister. So, the best way of protecting schedule and cost is making the absolute minimal changes necessary to get the ships in the water and that's what we're planning on doing.

NADIA MITSOPOULOS: All right. I'll leave it there, Minister.  I appreciate your time. 

MINISTER CONROY: Thanks, Nadia. Have a good morning. 

ENDS

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