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Thursday, 28 June 2018
Page: 4381

Senator DEAN SMITH (Western AustraliaDeputy Government Whip in the Senate) (16:23): I rise to speak on the tabling of the Senate Economics Reference Committee's report, Future of Australia’s naval shipbuilding industry. Coalition senators recognise that the Australian government, through the 2016 Defence white paper—the Integrated Investment Program and the Naval Shipbuilding Plan—has provided a framework to build a sustainable sovereign shipbuilding industry. Quite rightly, the Commonwealth government views a productive Australian naval shipbuilding industry with an export capacity as a strategic export asset. There's no doubt that investment made in the Naval Shipbuilding Plan will revitalise Australia's heavy engineering and advanced manufacturing industrial capability, particularly in my home state of Western Australia.

Evidence provided to the committee throughout this inquiry demonstrates that the Commonwealth government is delivering on their commitment to a sustainable sovereign shipbuilding industry, ensuring that Australian businesses and jobs are at the forefront of all projects. Milestones in the continuous shipbuilding program are being met. I acknowledge Austal, in particular, who launched the first steel-hulled Guardian class Pacific patrol boat on 30 May this year. Austal are a perfect example of the types of companies we want to see more of in Australia across all defence industries. For many years, they've been Australia's largest defence exporter and in some years have been our only defence exporter. This year alone, they'll sell $1.35 billion worth of vessels to commercial and government clients across the globe, having delivered in excess of 300 vessels to clients in 54 nations since their foundation. In addition to this, Austal are the only foreign prime contractor to sell vessels to the United States navy since the American War of Independence. These vessels are designed in Western Australia and built with more than 2,400 components manufactured by Australian industry.

The plans this government has laid out for a sovereign shipbuilding industry will ensure companies like Austal continue to be successful, along with creating a sustainable future for ASC and their workforce. Throughout this inquiry, Defence have outlined in detail the Commonwealth government's plan to maximise Australian industry involvement across the full spectrum of the naval shipbuilding enterprise, from capability design to complex project management, construction and sustainment activities. This means future Australian governments will be able to plan and execute the design, construction and sustainment of future fleets of major service combatants in Australia using the sustainable indigenous capability we will build through this process.

To achieve the required level of Australian industry involvement in these projects, the Commonwealth government has established the Capability Acquisition and Sustainment Group. Industry days have also been held around Australia with the intent of informing local businesses of opportunities in the supply chain for major Defence projects. Through extensive engagement with local industry on the Future Submarine project alone, 800 Australian companies have registered interest with Naval Group, and 222 Australian companies have registered interest with Lockheed Martin Australia. These companies, along with those who have registered interest in the Offshore Patrol Vessels and the Future Frigate Program, will have the opportunity to enter the international supply chain of major defence primes.

A great example is in my home state of Western Australia, where tenderers for the Future Frigate Program have engaged a Perth based company, Hofmann Engineering, to supply thrusters for the international cruise ship business. Additionally, these companies have entered into an agreement to cooperate in developing opportunities in the $400 million global market for the manufacturing of marine systems and components. Even before the main project has started, the government's emphasis on Australian industry is already creating jobs in our economy. The Australian Industry Capability Program requires tenderers on projects with a value in excess of $20 million to demonstrate how they'll maximise opportunity for Australian industry to participate in the Defence supply chain. The public record shows the government has also strengthened requirements on tenderers to demonstrate how they'll maximise Australian industry capability over the life of the project and build enduring defence industry capability to meet Defence's broader needs in the years to come.

Coalition senators authored a dissenting report on this inquiry because we believe the Commonwealth government has provided the appropriate framework to establish a sovereign and truly national shipbuilding industry in our country, an industry that will build indigenous capability and create thousands of skilled multigenerational jobs. In delivering these plans, coalition senators believe updates on Defence projects should be provided to both the Joint Standing Committee on Foreign Affairs, Defence and Trade and the Senate Foreign Affairs, Defence and Trade Legislation Committee through estimates. I would note, of course, that many projects already are advised to the Joint Public Accounts and Audit Committee. I note the defence subcommittee is currently inquiring into the benefits and risks of a bipartisan Australian defence agreement as a basis of planning for and funding of Australia's defence capability. This includes examining the role of the Australian parliament in overseeing the delivery of long-term defence capability, including the 2016 Defence White Paper, the integrated investment plan and the Naval Shipbuilding Plan.

It's the view of coalition senators that the findings and recommendations should be taken into account by the government before responding to this inquiry. We believe greater longitudinal oversight of the delivery of these plans by the Australian parliament would be an appropriate response to the concerns raised in the chair's report and the majority of recommendations. We further note the Department of Defence have made clear the sustainment of the Collins class submarine is the subject of long-term capability planning and that there are no plans to move the sustainment location. In response to recommendation No. 7, whilst noting the Commonwealth government has developed a framework to ensure Australian industry involvement in major defence projects is maximised, coalition senators agree in principle with this recommendation and believe definitions could be further tightened. Coalition senators on the committee commend the Commonwealth government for the significant work being undertaken to establish a sovereign shipbuilding industry in our country. I seek leave to continue my remarks later.

Leave granted; debate adjourned.