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Monday, 23 November 2015
Page: 8613

Defence Procurement

Senator FAWCETT (South AustraliaDeputy Government Whip in the Senate) (14:43): My question is to the Minister for Defence, Senator Payne. Would the minister update the Senate on the progress of Project SEA 1000, the Future Submarine?

Senator PAYNE (New South WalesMinister for Defence) (14:43): I thank Senator Fawcett very much for his question. Last week I had the opportunity to address the Submarine Institute of Australia conference in Adelaide on just this matter.

Senator Conroy interjecting

Senator PAYNE: Happily, the soporific nature of Senator Conroy's speech later in the day gave them a little rest before tea time.

Senator Wong interjecting

Senator PAYNE: He led with his chin. The Turnbull government, as Senator Fawcett well knows, is absolutely committed to the Future Submarine project as a core strategic capability, and our investment in the project reflects the importance that we put on the safety and security of our nation. This government is determined to get the best future submarine with the best capability for the best value for money through a competitive evaluation process. The government has invited DCNS of France, TKMS of Germany and the government of Japan to participate in this process, and all three have indicated they will present their proposals to Defence by the required date of the end of this month. That is a very powerful endorsement of the process; that all three have invested significant resources to participate in the development of these proposals. All three have worked with Defence to put forward their case. The evaluation process will take a period of time, because we are determined to make the right decision. It is a very important decision, and we have taken the best possible advice from Defence in determining this time frame.

I can also inform the Senate that the government has begun the work to choose a combat system integrator for the future submarine. This is a key decision, and the point of having made this decision at this point in time is that it will enable Defence to have a qualified and experienced industry partner on board as soon as we select an international partner. Importantly, it also represents jobs in Australia. That is a very important aspect of this process. (Time expired)

Senator FAWCETT (South AustraliaDeputy Government Whip in the Senate) (14:46): Mr President, I ask a supplementary question. Would the minister inform the Senate of the risks that would arise if the competitive evaluation process were delayed?

Senator PAYNE (New South WalesMinister for Defence) (14:46): It has been concerning to see some observations in relation to delaying the competitive evaluation process. There have been suggestions that we should down-select to two partners and run another request for tender, and that could apparently be easily achieved by simply extending the life of the Collins class submarine.

I believe, and Defence believes, that this would in fact be a reckless approach. I am advised that, conservatively, an approach like this would add another three or four years to the delivery of the future submarine, which does heighten the risk of developing a capability gap. An extension of the life of the Collins class submarine would come at significant cost and risk, if we were to pursue it even further, as suggested by some of those opposite, including the shadow minister.

It is well known that, as naval vessels age, they do become more expensive to maintain. But, more importantly than that, the longer the Collins submarines are kept in service, the more their relative capability will decline as newer submarines enter service within our region. (Time expired)

Senator FAWCETT (South AustraliaDeputy Government Whip in the Senate) (14:47): Mr President, I ask a further supplementary question. Could the minister outline to the Senate why the competitive evaluation process and the current time frame is the most appropriate way to meet our strategic defence needs?

Senator PAYNE (New South WalesMinister for Defence) (14:47): This is a very important supplementary question from Senator Fawcett because, for the Future Submarine program, realistic capability costs and scheduling estimates will be achieved by engaging with the selected design and build partner to make informed decisions on cost capability trade-offs and risks from the earliest stages of design.

The CEP process has been designed so that we can select an international partner and get on with the task of designing and constructing our future submarine, while minimising the life extension required for the Collins submarines. What happened with those opposite is that they sat on their hands. They sat on their hands for six years in government, and now some of them seem to want to delay this project even further, which would significantly heighten the risk of a capability gap. That is not a proposition the government is prepared to accept when the safety and security of the nation is at stake. When this vitally important capability is at stake we will not participate in that process. We will make the right decisions. (Time expired)