Doorstop, Hobart

SUBJECTS: Hunter-class frigate contract; Tasmania’s defence industry; Sydney’s Victoria Barracks; Coalition energy policy; Pacific cooperation; Townsville; F-35 parts

MANAGING DIRECTOR OF CBG SYSTEMS JAVIER HERBON: Thank you everyone for being here today at CBG Systems in Hobart. It's a great honour to have Minister Pat Conroy with us, senior executive team from BAE Systems, our customer, and also the distinguished guest presenter, Senator, thank you very much for being here today. I would like to acknowledge also the incredible input of my entire CBG Systems team. Without them, it wouldn't be possible. The other ones actually are the qualified these major projects and we will be growing our team as we mentioned before, for the next ten years to come. Thank you everyone. If you have any questions, otherwise I will like to let Minister to say a few words.

MINISTER FOR DEFENCE INDUSTRY PAT CONROY: Thanks, Javier it's great to be here at CBG Systems in Hobart with two members of the ferocious Tasmanian Labor team, Senator Carol Brown and Rebecca White, Member for Lyons and Assistant Minister for Health and Aged Care. Tassie fights above its weight, punches above its weight in terms of contributing to the defence of the nation. More Tasmanians per capita join the ADF than anywhere else in this country. And the Tasmanian defence industry is making a really vital contribution to the Australian defence industry and making the ADF safer and better equipped. Today's announcement of an $83 million contract supports the future of CBG Systems, a company that's already doing great work supporting the Australian Defence Force as well as allied militaries. We’ve just seen on tour seeing their Moonraker antennas that are on Australian naval vessels as well as ships of allies and partners. So, this is a highly skilled company full of passionate workers who are making this country safer. And this is just one of the many local defence companies in Tasmania that are making a huge contribution. Whether it's Liferaft Systems Australia supplying life rafts for the navy, whether it’s Sentinel Boats supporting the Special Forces, whether it's Currawong Engineering supporting drones for the ADF as well as export customers. These are all Tassie companies and Tassie workers making this country safer. And this latest investment by the Albanese Labor Government of $83 million will contribute to the growth of the sector here, locking in hundreds of high-skill, high-tech jobs for the future of the Australian defence industry. And I want to pay tribute to the workers here for their contribution to the company CBG and obviously their customer BAE Systems Australia for the work that they do. And I want to thank Carol and Rebecca for their fierce advocacy. As I said in my prepared remarks, not a week goes by without one of them banging on my door demanding more for Tasmania. You can't get better advocates for Tasmania than Rebecca and Carol and the rest of the Tasmanian local team. So, this is a great day for the Tasmanian defence industry. This is a great day for the defence of the nation and we're really excited that there's only more to come. Thank you very much. Happy to answer questions on this announcement first and then politics of the day later.

JOURNALIST: Minister, I guess in terms of the tender process or the evaluation process, what did that sort of look like? And ultimately, how did you come about determining CBG to be the successful tender?

MINISTER CONROY: Well, I'll invite BAE to contribute to the answer because they're the supplier. But when the contract was awarded to BAE, that included a requirement to fill certain parts of the contract in Australian industry, but also to build the sovereign maritime industry in this country. If we don't make it here, jobs disappear. If we don't make it here, we don't have the resilience and sovereignty to do what we need to do. And as I said in my prepared remarks, the Hunter class frigates will be the most advanced submarine-hunting warships in the world. But to detect and destroy submarines, you need to be as quiet as a submarine. And that's what this insulation does. It keeps everything cool, keeps everything quiet. And if the worst comes and will sustain battle damage, it helps protect the sailors. So, there's confidence that CBG can do that from the Commonwealth point of view and clearly from BAE as well. See if BAE wanted to add anything to it.

MANAGING DIRECTOR OF BAE SYSTEMS SURFACE SHIPS DAVID SHEPHERD: So, Minister, covered all the main points there, really. Building upon the continuous naval shipbuilding strategy. Hunter's absolutely the centre of that. So, we've got a robust process that we go through, evaluating our suppliers. And that's what's led us to hundreds of suppliers, 80 of which are small, medium enterprises here in Australia. Rebuilding the sovereign shipbuilding capability. So, a very robust process that goes through multiple aspects, but the technical capability, the business capability and the partnership behaviours displayed by CBD, sorry, CBG are the key things that led us to this decision and moving forward with this partnership.

JOURNALIST: What impresses you about CBG? What do they do that sort of sets them apart?

SHEPHERD: Yeah, so their technical expertise and research and development really keeps them at the forefront of the technology. Insulation is one of these parts of a world-class warship like Hunter that's quite hidden. You don't really see it this absolutely critical to the capability. Ship's quiet environmental conditions are what is required to support the crew and battle damage, survivability, those types of things. The technical aspects of the insulation is absolutely critical to that and the company is at the forefront of research and technology. Then you add that to their behaviours, their forward thinking in terms of development, their workforce here in Tasmania and then also wider in the footprint in Osborne. All those things come together. That impresses me about the way that they go about their business.

JOURNALIST: Could we just grab your name and title, sir? Sorry, just before we perhaps go back to one of our other speakers.

SHEPHERD: Yes. So, David Shepherd, Managing Director of BAE Systems.

MINISTER CONROY: And just one other point on this question. Everyone naturally focuses on where the ships are assembled, where the constructed final assembly is obviously occurring in Adelaide. But almost every Royal Australian Naval vessel has products in it from Tasmania, such is the expertise, whether it's CBG providing the installation here or the Moonraker antenna that are the best in the world, that they supply not just to our Navy, but navies around the world, or whether it's Taylor Brothers with their really important contribution to the warfare historian and Hunter class or what Liferaft Systems Australia does. I think I can say without fear of contradiction that every Royal Australian Navy vessel has Tassie products on it because Tassie products are the best in the world at what they do.

JOURNALIST: Minister, before we perhaps get you on other questions, I wouldn't mind getting a couple more insights and questions to you, sir, just from CBG's perspective. But I guess in terms of now that you've got this contract in place, will you have to upskill or upscale rather your workforce to ensure that you've got enough workers to be able to do the work on this contract?

HERBON: Yes, absolutely. Currently we're a company of 50 employees and the resource profile just for these contracts is an additional 80 employees at least. And so, so we are already, we have already started ramping up. We are actively hiring, training, upskilling existing and new entry employees.

JOURNALIST: Is there enough skill in Tasmania or are you having to look interstate for that?

HERBON: Actually, we have a very good pool of talent here in Tasmania. We know the market really well. We know how to retain employees, we know how to look after them. I think that we're pretty confident that Tasmania has great skills and labour resources to contribute to this national endeavour.

JOURNALIST: How does this compare to other contracts that the Secretary has taken on?

HERBON: Well, this contract sits a bit on its own. It took years to negotiate, to mature and to get to this point and it will take us at least eight years to deliver. In our 40 years of experience, primarily on commercial markets or commercial projects, they come and go. What we thought that it was slowly but it's quite quickly in a year or 18 months, a commercial project with ink and ships across the road that were key support supplier or hostel ships, they're typically an 18-month contract. While this one has been, we have had plenty of time to prepare and we will have time to gear up and to deliver as well. So, it has a different tempo and we think that we're well prepared for that.

JOURNALIST: So, when you say this contract stands alone, would it be fair to say that this is the biggest contract that your company's ever secured?

HERBON: It is the biggest contract that we have ever secured and luckily we are in that trajectory of securing big and bigger contracts. Two years ago we did secure two major contracts with Hanwha Defence Australia for the delivery of camouflage system for state-of-the-art land platforms for the Australian army. And two years ago that was our biggest contract ever and now I can happily say that our contract with BAE Systems it is the biggest contract ever signed.

JOURNALIST: Based on what you're seeing in the sector down here do you think Tasmania's got the potential to secure a lot more of these contracts?

HERBON: Absolutely, absolutely. And I think that sharing the news of companies like us, [indistinct] and few others flows down confidence we can potentially stimulate other small medium sized enterprises here in Tasmania to jump into these sovereign industrial capabilities that the Albanese government is trying to develop.

JOURNALIST: And you've obviously got a lot of bits and pieces around the warehouse here. Do you envisage that you'll have to expand this facility or maybe look at building an additional warehouse?

HERBON: We have plans to build a new state-of-the-art facility just few minutes from here, Technopark. We have received some assistance from the local Tasmanian government through the acquisition of that block of land, 7,000 square metres of land from Crown, and we're now in the process of lodging a DA with Glenorchy City Council to develop a 5000 square metre state of the art class. [indistinct] about our expansion plan.

JOURNALIST: When you say you've got a bit of assistance from the state government, is that funding and if so, are you able to tell us how much funding you've contributed towards that?

HERBON: No, it was pretty much the negotiation of purchasing crown land and turning it into private land.

JOURNALIST: Thank you.

JOURNALIST: I just have one really quick one. I mean Minister, what can Tasmania do to make sure it in the running for more of these contracts? Is it downward pressure on prices, is it? Well, you tell me what would give us more competitive advantage?

MINISTER CONROY: Well, I think you've got two great competitive advantages already. One, you've got a skilled workforce and you sorry. Now you've got a skilled workforce, and you've got great linkages to the training system. So, I was at Sentinel Boats yesterday with Senator Brown and they've got a great relationship with the TAFE that's across the road. So, that training flow-through of young Tasmanian workers is one of your critical advantages. Other states are hitting big barriers of attracting skilled labour. Tasmania has the opportunity to grow. The second one is you've got a real export mentality and that means flexibility, making sure the customer is serviced. And I've made this joke so much that I think boring people. But you're used to exporting into that small island to the north of you across the Bass Strait and that gives you flexibility and ambition. So, the companies here already do lots of exports and that gives you balance so that you're not relying on one single defence contract. It means that you can move at speed and ultimately know what the customer wants. So, Liferaft Systems Australia, 98 per cent of what they, sorry, 95 per cent of what they produce is exported. Currawong Engineering is 98 per cent here. Here at CBG, lots of their work is going into foreign navy already. So, you've got capacity to grow, you've got capacity to get more skilled workers and we want you to be an even bigger part of the Australian defence industry. We're increasing the defence budget by $117 billion over the next decade. Employment in industry grew by 10 per cent alone last year. We're going to ramp up even more and we want to soak up as many Tasmanian workers as possible to do that work.

Any other questions on today's announcement? Excellent. I might invite the non-political people to exit so they're not caught in the crossfire.

JOURNALIST: Minister, when will the Victoria Barracks in Sydney be closed and how will the government commemorate its history?

MINISTER CONROY: Well, if you importantly, the Victoria Barracks is governed by really strict heritage laws and they will guide any future use of that property. In fact, I'm actually very confident that the heritage will be preserved and be more accessible to the Australian people because at the moment it's locked in a military base that is very hard to get onto in terms of the transition out. We've made it clear that we expect to move out the army units over the next 18 months and that's a critical time path to this project. But this is really important for the Australian taxpayer. An independent review found that over 60 projects were providing no strategic value to the Commonwealth and to the effects of the nation, but were going to cost $1 billion to maintain over the next decade. Think about that for a minute. We were going to spend $1 billion (inaudible) to maintain bases that weren't contributing to the defence of the nation. And we made the hard but necessary decision to sell those assets to avoid paying a billion dollars in maintenance, to liberate around $3 billion from the sale of these assets to go into buying the equipment and supporting the Australian Defence Force to defend this country. This is the right decision. Another benefit is for many of these sites. They can be opened up for housing. We've got huge housing challenges in this country. We make no apology for investing in the ADF where it needs to be invested in and to save taxpayers’ money that can be reinvested in defending this country.

JOURNALIST: What does the Federal Government think about the coalition's energy policy such as around scrapping net zero emissions, removing offshore wind and bringing in nuclear power?

MINISTER CONROY: I'm amazed that we’re going back to the future with the coalition. I would have thought they would have got messaged from the last two elections. Let's break it down piece by piece. To go again 100 per cent into nuclear energy is an act of economic lunacy. If you're supporting nuclear power for civilian energy use in this country, you're advocating for higher power prices. Higher power prices is what Angus Taylor wants in this country by supporting nuclear power. If he's advocating scrapping the safeguards mechanism, he's advocating for our emissions to grow and this endangers our national security. I'm also the Minister for Pacific Island Affairs and we're in a diplomatic contest for influence in the Pacific. If you're not serious about climate change, you risk surrendering our position in the Pacific to other nations. So, this policy by Angus Taylor makes him weak on national security by being weak on climate change. Thirdly, his policy to scrap the vehicle emission standards means Australia will be the dumping ground for high polluting, expensive-to-run cars. It will mean that we're the only country in the world without vehicle emission standards in the developed world, besides Russia. So, Angus Taylor is on a unity ticket with Vladimir Putin. Just think about that for a second. Angus Taylor and Vladimir Putin have the same policy around vehicle emission standards, which is an act again of economic idiocy. We've seen Australians rushing to buy electric vehicles partially because of what we're seeing in the Strait of Hormuz. And so, Angus Taylor, whether it's power prices or car running costs, is arguing for higher costs for Australian consumers, weakening our national security. And being on the side of Vladimir Putin when it comes to vehicles.

JOURNALIST: On the Pacific issue. Chinese state media has reported that China and Vanuatu signed a policing agreement a couple of weeks ago. There hasn't been an original announcement from either of those countries. Has the Australian government worked out what has been signed and should China and Vanuatu be more transparent about any agreements?

MINISTER CONROY: Oh look, I've seen those reports. China and Vanuatu have had cooperation agreements around policing for a number of years, so we'll see what's published. But this is not a. This is why it's so important that we see the Nakamal Treaty with Vanuatu earlier this year this was a landmark treaty that brought our two countries closer together. Importantly, part of the Nakamal Treaty contained a provision from the government of Vanuatu guaranteeing that they would not allow foreign military bases in Vanuatu. It also provided assurances around the militarisation of infrastructure. So, cooperation between those two countries on policing is not a surprise. But the Nakamal Treaty means that we are the partner of choice for Vanuatu. One part of our landmark engagement in the Pacific between Australia is safer because of our treaties that we've landed with Vanuatu, Tuvalu, Nauru and the two new alliance has been negotiated with Fiji and Papua New Guinea.

JOURNALIST: The Assistant Minister or Senator might be better placed to answer this question but through rows Tasmania has raised concerns about changes to temporary workers and what that will mean for Tasmania's agriculture industry. Do you share those concerns about the temporary workers?

MINISTER CONROY: I'm happy to have a go … we're making modest changes to migration to bring it in with what the nation expects us to do. But importantly we're ensuring that we're prioritising skilled workers coming into this country and we're prioritising the processing of visas particularly for the agricultural sector and the fishing sector. As the Minister for Pacific Island Affairs, I can assure you that we've got thousands of Pacific Islanders that are already pre-qualified through the Pacific Australia Labour Mobility Scheme that are keen to come to this country, that are kept keen to come to Tasmania and work in your brilliant horticultural sector as well as your fishing sector. I visited on previous visits some of your berry farms in the north of the country including Hillwood Berries, where I met workers from Timor-Leste and Samoa that were picking berries each season and providing huge benefit to Tasmania. So, I'm confident that we've got the settings right. I'm confident that the workers will be there for the agricultural sector. Importantly, we haven't changed the requirement for working holiday makers who want a second or third year visa a requirement to go to regional areas like Tasmania. So, we're going to get the settings right. We're going to make sure that the agricultural sector has the workers it needs but also that the migration settings reflect what the nation needs as a whole including our partnership with Pacific so that we use the Pacific Australia Labour Mobility Scheme to elevate our relationship with the Pacific.

JOURNALIST: The one from Townsville. We’re covering some ground. Townsville leaders are upset at a proposal to relocate military watercraft from the city to another location worried about the economic implications. Is this something the Federal Government's considering? And why should watercraft be shifted away from Townsville?

MINISTER CONROY: We've made no decision on the location of the watercraft in that particular region where standing up the littoral manoeuvre capability for the Australian army to requiring 18 this will mean a huge increase in the ability of the Australian army to move its equipment to engaging amphibious manoeuvre and long range strike. And we've said that we'll be establishing multiple manoeuvre battalions one in Brisbane, one in North Queensland and one in Darwin. We haven't made a final decision as to that location in North Queensland but the defence footprint in Townsville is going to grow. Let me repeat that the number of defence personnel in Townsville will grow and the amount of defence industry in Townsville will grow as well. We made a decision to concentrate army aviation in Townsville to move the maintenance for the Apache attack helicopters as well as the Chinook helicopters to be focused in Townsville. That will mean hundreds of high skilled defects industry jobs going to Townsville. And I can assure the workers of Townsville that they will see more defence work not less under the Albanese Labor Government.

SPEAKER: Last question, thanks guys.

JOURNALIST: F-35 parts were being diverted to Hong Kong and is it possible that espionage played a role in that?

MINISTER CONROY: I'm not going to comment on the specifics of this as there are ongoing investigations through the F-35 supply chain, principally through America. Obviously, I became aware of this well before the reports became public. This is an area that Lockheed Martin have to look at and we expect you to do that, but I'm not going to comment further on the details of that.

JOURNALIST: Can I ask one quickly from Nine: Randwick Council banning smart glasses. Is that a signal that it's time for the Federal Government to do more in that space?

MINISTER CONROY: We've made it very clear through the Attorney General that we're looking into this area. I'm not going to get ahead of the Attorney General. Michelle Rowland's doing a great job in this area. We're looking at the impact of tech, whether it's on social media, algorithms or AI, we're will always put interest of the Australian people first. I expect that to be the case here. Thank you very much.

ENDS