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Tuesday, 24 September 2002
Page: 4731

Senator TIERNEY (3:11 PM) —Senator George Campbell has moved that the Senate take note of all answers. The one I particularly want to focus on related to the question to Senator Hill concerning shipbuilding in Australia. It is terrific that, over the last 30 years in Australia, we have increasingly moved towards a system of actually building industry capability for Defence across this country. We have done that in major projects in not only shipbuilding but also aircraft and other military craft for the Army. This creates jobs, flow-on jobs and regional employment.

The question which came up today related to the way in which we may reorganise shipbuilding in this country. It is a complex issue. We have major projects. The flow of these tends to be uneven. We have major shipbuilding companies right around the coastline of Australia. How can we best use these facilities for the enhancement of defence equipment in this country? This government is going to do this in a very rational and systematic way.

I would like to contrast this with the way in which the Labor Party approached these projects when they were in government for over 13 years. We had a situation where major contracts were awarded by the last Labor government—I will focus on naval contracts here—depending on which particular state they wished to help and prop up at that time. Let me give you two examples. One is the submarine contract. The Bannon government was in some trouble, so they got the submarine contract. At the time, there was a far better proposal coming out of Newcastle and using a German submarine model. The Germans know something about building submarines—let me tell you. I think we would not have the problems we have at the moment if Robert Ray had made a decision at the time to choose the German-designed sub, built by a consortium, including BHP, out of Newcastle. He chose not to do that. We are now faced with a whole lot of bills to try to get the sub that was chosen to work.

This is how things can come back at you in politics: you make a decision in the eighties and here you are, two decades later, still suffering the financial consequences of such a bad decision. The corker of them all was the Anzac frigates. Again, Newcastle had a far superior project for those frigates, but what did the federal Labor government do? It wanted to prop up the Kirner government in Victoria, which was on the ropes as it approached that massive defeat in 1992. So whom did they give the project to? They gave the project to build the Anzac frigates to Williamstown, down in Melbourne.

Bob Hawke, knowing that Newcastle would be a bit disappointed, came up and proposed some flow-on work. One of the things about building these frigates is that you do not build them all in one spot. You can do them around the country, move the units and put them all together. Bob Hawke came up and promised Newcastle that we would get $972 million worth of work. We were incredibly impressed; he was right down to the last dollar! We got a few little units to put together and we made a few nuts and bolts for the project, but the amount of work that flowed on was pretty terrible for Newcastle.

Newcastle historically has a great history in shipbuilding. Recently we had Minister Hill come up to have a look at the minehunters. We were launching the last of the minehunters the day he was in town. The Diamantina was launched and all the workers who had put in such a terrific effort were there. It was penned off, and I am sure the minister was impressed with the technology. As I mentioned before, we have flows of work and we have to be a lot more sensible and rational in the way that we approach them. Having a prime contractor is the way to go about this and work can be then spread around. Shipyards in Newcastle are not uncomfortable with that. They see that there will be work, and, in the works program this government has put ahead, over the next 10 years there is plenty of work for shipyards. We just have to approach it in a rational and systematic way, and our Minister Robert Hill is proposing such an approach. It is a far better approach to shipbuilding than the mates approach of the previous ALP government. (Time expired)