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Howard Government drives the ASC into the red.



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MEDIA RELEASE

Senator Chris Evans Labor Senator for Western Australia Shadow Minister for Defence

3 October 2002

HOWARD GOVERNMENT DRIVES THE ASC INTO THE RED

The Australian Submarine Corporation will be potentially driven into running at a loss because of the Howard Government’s decision to bring in a US company as a ‘capability partner’.

Robert Hill has stated that the ASC will be paying US$20 million over the next three years to access advice from the US-based Electric Boat Company. That equates to approximately $13 million a year in Australian dollars.

In the ASC’s latest annual report for the 2000-01 year, it recorded an after-tax profit of $7 million, down from $10.3 million the previous year.

Given those recent reported profits, ASC is likely to be operating at a loss now that the Government has forced it to pay $13 million a year to the Electric Boat Company.

This comes on top of John Howard’s failure to honour a commitment to sign a $60 million a year contract with the ASC for the servicing of the submarines, a promise made during the last election.

It seems Australian taxpayers will be paying a high price for the Howard Government’s decision to enter a strategic alliance with the US on submarines.

It was recently revealed that the Government will be paying an extra $200 million for new US torpedoes, which were found to be too heavy for the Collins class submarine, after the tender process was abandoned.

For comment: Chris Evans 0419 983 593 Tim Friedrich 0408 577 617