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Labor delivers capability for defence and certainty for Australian shipbuilding industry



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   Campaign Media Release 

Prime Minister Kevin Rudd 

Minister for Defence Stephen Smith 

Minister for Defence Materiel Mike Kelly   

LABOR DELIVERS CAPABILITY FOR DEFENCE AND CERTAINTY FOR AUSTRALIAN SHIPBUILDING INDUSTRY    

The Rudd Labor Government today announced details of Labor’s plan to deliver Australia's future Navy capability and provide certainty for Australia’s naval shipbuilding industry. 

The May 2013 Defence White Paper committed the Federal Labor Government to replacing the Navy's supply ships, HMAS Success and HMAS Sirius at the earliest opportunity.  

Replacement options include local build, hybrid build (part construction overseas and part domestically) and overseas build, or the leasing of an existing vessel.  

Today the Rudd Labor Government confirmed it will bring forward this project and will, as a minimum, commit to a hybrid build for one of these Navy supply vessels with construction to commence in 2015-16. 

This decision will ensure the level of content is sufficient to bridge the gap between the existing contracts and the Future Submarine contracts. 

Since 2007 the Federal Labor Government has invested in modernising the Navy’s ships and ensuring Australia has strong defence industries.   

Today’s announcement will ensure Australia maintains a world-class naval shipbuilding industry and will support skilled jobs as our economy transitions beyond the mining boom.   

To deliver this essential capability in this timeframe, the Government will direct Defence to downselect, based on the Navy’s capability requirements, no more than two options and then conduct accelerated, limited competition, consideration and approval processes.  

This will include a streamlined process of Government consideration. 

The competition process will involve consideration of Australian industry involvement. 

Currently, naval shipbuilding in Australia is based in four key areas: 

 ASC in Adelaide, where (in addition to submarine work) work on the current Air Warfare Destroyer (AWD) construction program is due for completion around mid-2019. 

 BAE Systems in Melbourne, where work on AWD and Landing Helicopter Dock (LHD) construction programs due for completion around mid-2015. 

 Forgacs in Newcastle, where work on the AWD program is due for completion in 2015. 

 Austal in Perth, where construction of Customs Cape Class patrol boats is due for completion around mid-2015. 

Acquisition of these vessels is funded from the Defence Capability Plan. Any additional funding required will be prioritised from within existing resources. 

This decision supports the maintenance of the skills and capabilities developed by our domestic shipbuilding industry, which have been proven as world class through the Air Warfare Destroyer and Landing Helicopter Dock ship building projects. 

These skills are also essential to the delivery of the Future Submarine Program.  

The Rudd Labor Government remains committed to acquiring 12 new Future Submarines to be assembled in South Australia. 

The Future Submarine project will be the largest and most complex Defence project ever undertaken by Australia. It is a capability design, construction and sustainment challenge of unprecedented scale and complexity, and will span decades and involve thousands of jobs. 

This commitment provides certainty for jobs in our national shipbuilding yards, which were facing a decrease of work due to completion of work on the AWD project. 

Labor will also work with the Australian shipbuilding industry to explore how it can build on the skills it has developed in naval shipbuilding to attract further shipbuilding work. 

Only the Federal Labor Government has a clear vision to deliver Australia's future Navy capability needs while also addressing the long term management of the Australian naval shipbuilding industry. 

In May 2013, the Federal Labor Government announced a plan to provide more certainty to Australian industry through consideration of a smoother, coordinated shipbuilding program to provide more stable work for the industry and retain critical skills for the future through a range of specific measures: 

 The Air Warfare Destroyer Alliance has reallocated construction of four AWD steel hull blocks from the Forgacs shipyard in Newcastle to the BAE Systems shipyard in Melbourne. Additional work on existing hull blocks is being provided to Forgacs so there is no reduction of work in Newcastle. 

 Replacing HMAS Success and HMAS Sirius.  

 Bringing forward the replacement of Australia’s Armidale Class Patrol Boats, to be assembled in Australia.  

 The Government will also consider related aspects of the Future Frigate project. This will include further investment in Australian-developed phased array radar technology already in service in the ANZAC Class frigates, establishment of a project office and analysis of whether the Air Warfare Destroyer hull might play a part in the Frigate project. 

 The Government has also made key decisions on the Future Submarine program, including narrowing the options to be considered and directing that further work on a new Submarine Propulsion Energy Support and Integration Facility be based in Adelaide. 

By contrast the Coalition has a confused approach when it comes to Defence and supporting our local Defence industries. 

Tony Abbott has said it would be unwise to become too prescriptive, when talking about the future submarines, and his Defence Spokesperson, Senator David Johnston continues to talk down the current Collins class submarines while not outlining any proposals to meet our future Defence capability needs. 

This shows the Coalition is not up to the task of making decisions on the future major capability requirements for our Defence Force. 

Mr Abbott has no plan for Defence and no plan for a sustainable domestic Defence industry.

WILLIAMSTOWN 29 AUGUST 2013  

Communications Unit: T 03 8625 5111 www.alp.org.au    

Authorised by G. Wright, Australian Labor Party, 5/9 Sydney Avenue, Barton, ACT, 2600 

Delivering Defence Capability through a Sustainable Domestic Shipbuilding Industry

Policy Summary

The Rudd Labor Government is committed to building and retaining Australia’s national shipbuilding skills to deliver the long-term capability needs of the Australian Navy.

Consistent with the Federal Labor Government’s Defence White Paper released in May this year, Federal Labor is announcing its commitment to bring forward acquisition of two new supply ships for the Australian Navy to 2015-16. These ships will replace the Navy’s existing and aging supply ships, HMAS Success and HMAS Sirius.

At a minimum, one of these replacement ships will be a ‘hybrid build’ - part build overseas, part build in Australia - with construction to commence in 2015-16.

Bringing forward replacement of these vessels will deliver essential capability to our Navy when it is needed and supports skilled jobs and advanced capabilities in our domestic shipbuilding industry. Maintaining these skills will be essential to delivering over 40 new vessels required by the Australian Navy over the next two decades.

The supply ships, known as Auxiliary Oiler Replenishment (AOR) ships, provide the support capability necessary to sustain maritime forces at greater distances and for longer periods away from an Australian operating base. Bringing forward acquisition of these ships to 2015-16 would see them enter into operational service in about the 2020-21.

Acquisition of these two supply vessels is funded from the Defence Capability Plan.

Why is Labor committed to supporting the shipbuilding industry?

Domestic companies skilled in building and maintaining platforms for our Defence Force are an essential component of the Defence contribution to our national security. The Future Submarine Industry Skills Plan (FSISP) highlights that, in directly supporting our Navy, a skilled naval shipbuilding industry is important to all the pillars described in Australia’s National Security Strategy: countering terrorism, espionage and foreign interference; preserving border integrity; promoting a secure international environment; and the Australia-United States Alliance.

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Through the Defence White Paper and the FSISP, Federal Labor outlined the Australian Navy’s requirement for over 40 new vessels over the next two decades to meet our national security needs. A critical component of this requirement will be the acquisition of 12 new Future Submarines, which Federal Labor has committed to constructing in South Australia.

The Future Submarine project will be the largest and most complex Defence project ever undertaken by Australia and will employ thousands of Australians for decades.

To meet these future capability needs for our Defence Force, it is critical that we maintain and build on the skills and expertise developed by the domestic shipbuilding industry through its work on the Air Warfare Destroyer (AWD) and Landing Helicopter Dock (LHD) shipbuilding projects.

The shipbuilding industry has been concerned about the gap between the end of construction work on the AWD and LHD projects in 2015 and the start of new work such as the Future Submarines. Allowing that gap to occur would see the loss of skilled workers and capital followed by a need to rapidly rebuild this capacity as the major new naval shipbuilding projects come online.

Bringing forward acquisition of the two supply ships will assist industry to fill that gap, and ensure Australia has the domestic shipbuilding skills needed to deliver the Navy’s future capability requirements without the need to go through a costly process of rebuilding a skilled workforce.

Naval shipbuilding in Australia is based in four main locations:

 ASC in Adelaide where AWD construction is expected to finish in mid-2019.

 BAE Systems in Melbourne where AWD and LHD projects are expected to be completed in mid-2015.

 Forgacs in Newcastle where AWD work is expected to finish in 2015.

 Austal in Perth where construction of Customs Cape Class patrol boats is expected to be completed in mid-2015.

Currently the shipyard construction workforce totals around 3,500 people, with a total workforce close to 4,400 people. Occupations range from senior management and clerical/administrative positions, through to engineers, draftsmen, boilermakers, welders, electricians, fitters and sheet metal workers.

Will this guarantee the industry’s future?

Bringing forward acquisition of the two new supply ships, with a commitment to a hybrid build for one of them as a minimum, will allow the shipbuilding industry to fill the gap in work in the 2015-16 timeframe, prior to the commencement of other major naval construction projects.

To support a smoother flow of work for the shipbuilding industry while meeting pressing Defence capability needs, Federal Labor also committed in the Defence White Paper to

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bringing forward replacement of the Navy’s Armidale Class patrol boats to be assembled in Australia, and considering bringing forward the Future Frigate program.

Federal Labor has committed to implementation of the FSISP, which seeks to enhance and maintain the necessary skills, expertise and capacity in the domestic naval shipbuilding industry to ensure not only successful delivery, but also sustainment, of Australia’s future naval capabilities.

What will this cost?

No new funding is required for the forward estimates. Acquisition of the two supply vessels is funded from the Defence Capability Plan at an estimated cost of around $1.5 billion. Any additional funding required to bring forward the acquisition will be prioritised from within existing resources.

When was construction originally due to commence on the two supply ships?

A non-accelerated process would likely have seen construction start around 2019-20.