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Defence hub a dud



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For more information contact Karina Natt on 0433 620 850 or Nick Xenophon on 0411 626 677

8/ 3 / 2016

DEFENCE HUB A DUD • Without actual contracts for Offshore Patrol Vessels and the subs being built in SA - not just assembled - the Defence Hub will be a smoke screen for broken promises

Independent Senator for South Australia Nick Xenophon said Prime Minister Malcolm Turnbull’s announcement today that a new Centre for Defence Industry Capability will be headquartered in Adelaide is “a smoke screen to hide the Government’s broken promises on naval shipbuilding for SA”.

In particular Senator Xenophon pointed to evidence provided at a Senate Estimates Hearing last month that ASC’s shipbuilding staff will be reduced to a skeleton staff of just 100 from 1400 by 2018. The $4 billion OPVs program would have reduced that ‘valley of death’ significantly.

“What makes matters worse is that the Defence White Paper leaves open the possibility of there being an overseas or hybrid build of the subs. With no contracts in place, SA is in the same position as three years ago, when in the lead up to the last election, the Coalition was making the same promises on the subs,” Nick said.

Senator Xenophon also called out Industry Minister Pyne for backing away from the Abbott Government’s commitment to start building the OPVs in SA. “It is incorrect for Minister Pyne to say, as he did on 891 ABC Adelaide this morning, that the OPVs were never promised to SA. In August last year, then PM Tony Abbott trumpeted in Adelaide at Techport, an $89b navy shipbuilding plan - of Offshore Patrol Vessels, Future Frigates and submarines over a 30-year period,” Nick said.

“Just a couple of weeks later Mr Abbott elaborated on the promise saying the ‘frigate build will certainly start in Adelaide. That doesn’t mean that other yards can’t have a role, but certainly the corvette (OPV) build is likely to start in Adelaide. It will stay in Adelaide until the frigate build starts in 2020 and then it is quite possible the corvette build could shift’.”

Senator Xenophon said of the $89 billion naval shipbuilding announcement made last August, it could be as little as 10 per cent, or $8 billion, that is spent in SA as the Government seems to be pushing more work from SA to other states and overseas.

“What the Government is doing is not only bad for SA, it’s bad for the nation because a 2013 Defence report and 2015 Rand Corporation report set out that billions of dollars would be wasted with a lack of a continuous build. The stop-start, fragmented approach to naval shipbuilding is grossly inefficient and costs thousands of jobs and the only way to overcome that is to focus naval shipbuilding in one centre of excellence and efficiency which is SA,” Nick said.

Senator Xenophon made the point that sustainment for the ships is worth some $200 billion and has been accepted by the local defence industry as being best carried out closer to naval bases in Perth, Sydney, Cairns and Darwin.