Doorstop Submarine Announcement

E&OE TRANSCRIPT

Minister Pyne doorstop with Senator Lucy Gichuhi, and Chief of Navy Mike Noonan

13 December 2018

SUBJECTS: Submarine and shipbuilding industry

CHRISTOPHER PYNE: Well, it’s great to be here at Osborne North submarine yard, to be joined by my parliamentary colleague Lucy Gichuhi and, of course, the Chief of the Navy Mike Noonan. It's another great day for South Australia and for Australia with the naming of the submarine class, which was the Future Submarine Program, will now henceforth be known as the Attack class submarine. It's great to be associated with the naming of four different classes of vessel and that, of course, would not have been possible if the Australian Government hadn't committed in the last five years to commissioning 55 vessels in Australian shipyards. So today, we name the submarine the Attack class, the first one will be called theAttack and Mike Noonan might like to comment on that after I’ve finished speaking. But we also award the contract to build the Osborne North submarine yard to Laing O'Rourke. We turn the first sod here this morning, on time, on budget. We also announced that we have completed the negotiations with Naval Group and the French Government to sign the Strategic Partnering Agreement with Naval Group and with France. They will be concluded- they are concluded, and we'll sign that agreement in the early part of 2019, hopefully in February. Those negotiations have been on track. There's been a lot of ill-informed mythmaking around the negotiations but I'm very happy to be able to say today the negotiations are complete. The Strategic Partnering Agreement will be signed in February next year and we can continue to get on with the submarine project which has so far been under the design and mobilisation contract for the last two years.

QUESTION: Has the Naval Group then sought any wriggle room in order to sign off?

CHRISTOPHER PYNE: No, of course not. The negotiations have been ongoing for at least 12 months. That's what you expect in a $50-billion project. It's not something you can go down to Bunnings and buy on the weekend for your watering system. There are 12 submarines, $50 billion, major new infrastructure. That's involved the Australian Naval Infrastructure, Naval Group, the French Government, the Australian Government, Capability Acquisition and Sustainment Group. The negotiations have been conducted in a very harmonious spirit and I'm pleased to say that all issues are resolved. Both Australia, France, Naval Group, the Australian taxpayer represented by the Department of Defence, have all done well out of the negotiations.

QUESTION: What were some of the issues?

CHRISTOPHER PYNE: Well, of course, it's a commercial agreement so I won't be going into the intricacies of the negotiations.

QUESTION: So they were financial?

CHRISTOPHER PYNE: As I said, I won't be going into the intricacies of the negotiations. We won't be releasing the agreement, of course, because it’s a commercial agreement. We wouldn't do that. Suffice to say, the Australian Government's interests, the Australian taxpayers’ interests, have been taken care of. We will deliver, Naval Group Australia, will deliver 12 regionally-superior submarines on time and on budget

QUESTION: When were the negotiations concluded, formally?

CHRISTOPHER PYNE: Formerly, I spoke to the Defence Minister last week, on Thursday night, Florence Parly, and I can say officially they were concluded on Monday at the National Security Committee in Sydney- Melbourne, sorry, Melbourne.

QUESTION: And so were there any sticking points that [indistinct] trouble getting this across the line?

CHRISTOPHER PYNE: No.

QUESTION: Did you find- or perhaps, are you relieved now that this is signed off, with the federal election imminent?

CHRISTOPHER PYNE: Well, I always had a thumbnail schedule of making sure it was done before the federal election. Just because democracy being what it is and if the government changes, Labor hasn't shown the same commitment to submarine and shipbuilding in Australia that the Coalition has clearly. They made not one decision in six years to build a vessel in Australia so I wanted that to be completed. But that wasn't really- there was no particular deadline for the conclusion of the Strategic Partnering Agreement but I'm happy at the end of 2018 to be able to say it's been concluded and we can keep getting on with the job.

QUESTION: What do you say- I guess it's still going to continue – there's been some observations made about the price. We could’ve have done better off the shelf, I understand is one view expressed and that you were in uncharted territory in terms of the lead time and structure of requirements. And do you see those as fair observations to make?

CHRISTOPHER PYNE: No, I don’t. The Chief of the Navy might like to comment on the operational capabilities of our future submarine or the attack class as it’s now to be called. Look, there's a lot of people who are armchair experts in military.

QUESTION: Well, they are experts, sir.

CHRISTOPHER PYNE: Armchair experts as opposed to experts. They’re not informed by all the most up-to-date information. They don't have all the relevant facts and data at their fingertips. That's held by the Department of Defence, by the Australian Defence Force. I'm advised that these will be the regionally superior submarines. People who’ve been retired long from the military, much as we respect their service and thank them for it, couldn't possibly have the up-to-date knowledge to be able to advise the Government in the way that I'm advised by my experts in the Department of Defence and the ADF.

QUESTION: So the Son of Collins proposition didn’t stack up?

CHRISTOPHER PYNE: That was considered more than 32 months ago, so almost three years ago, and was rejected. So reheating old arguments from three years ago is not very useful, and today, of course, we can announce that the Strategic Partnering Agreement is concluded. The first sod is turned on the Osborne North submarine yard. Laing O’Rourke will build it. We’re getting on with the job.

QUESTION: On another issue, why does your government feel a Religious Discrimination Act is necessary?

CHRISTOPHER PYNE: Well, I'll leave the Prime Minister to make his announcements about that today. I understand he's having a press conference probably about at the same time as this one so I won't steal his thunder.

QUESTION: On the general business of building the submarines, is there any guaranteed Australian content signed in this contract?

CHRISTOPHER PYNE: Well, this will be a local build. A local build is defined as being around 60 per cent-plus. That's what we've achieved on the Collins class. We have achieved the same on air warfare destroyer. North of 60 per cent on both of those projects. So we expect this to be a local build as we've announced. That's what Naval Group will deliver, Naval Group Australia. In fact, I'm sure it'll be further north of 60 per cent.

It's very exciting down here on the Peninsula, obviously. The Osborne South shipyard is well underway. The businesses that used to be on the old yard are in the process of being moved to make space because we're actually expanding. There are cranes here on the Lefevre Peninsula building, the shipyards and submarine yards; and they will build a local build. Australian businesses will be big beneficiaries, and obviously, it's having an impact on the South Australian and Australian economy already

QUESTION: You say that there’ll be hundreds of jobs. How many hundreds and when will they start to [indistinct]?

CHRISTOPHER PYNE: Well, there’s thousands of jobs. By about 2024, there’ll be about 5000 people working here at the Osborne North submarine yard and the Osborne South shipyard. So there are 1800 now, so we're looking for 3500, 3200 more people. So, there's thousands of jobs and that's just directly and indirectly in shipbuilding that will flow through the rest of the economy too, in Adelaide and Australia; and many hundreds of businesses have been pre-qualified now by Naval Group to be part of this project. That’s obviously the case too for the Hunter class. On the frigates, BAE announced there’d be 1000 new jobs in the 12 months. That was about two months ago, three months ago, so that's well underway. Naval Group are recruiting right now and they're based in at the moment in Richmond but they are recruiting the experts that they need in design, obviously, in construction. But let's not forget that 60 per cent of the workers on a submarine yard or a shipyard are people with highly sophisticated trades. So this is not just work by engineers and architects, for project managers, it's also work for electricians, and welders, and fitters and turners, so it flows through the whole economy.

QUESTION: Thank you.

UNIDENTIFIED SPEAKER: Do you want to say anything, Mike?

CHRISTOPHER PYNE: You don’t have to hold the shovel.

[Laughter]

QUESTION: And I think just by way of contextual detail, just describe the model and type of submarine is going to be constructed here.

MIKE NOONAN: Sure. Well, following on from the Minister's comments, I’m absolutely delighted that we've had the ability today to announce the Attack class name for the future submarine. The 12 submarines, which will be based on the Shortfin Barracuda, designed by Naval Group, is currently under design between a team in France, and Australians. The design process will finish here, in this site, and obviously, all the construction will be done here. The first submarine, as the Minister mentioned, will be delivered in the early 2030s. It will be delivered to the Commonwealth of Australia, and it will then go through a period of test and evaluation before it undertakes full operational service in the Royal Australian Navy.

QUESTION: There's been a commentary that it might be a bit too long a lead time to keep your Collins up and running up to 2030. What do you say to that?

MIKE NOONAN: Well, I think if there's any speculation that there's going to be a submarine capability gap, I don't believe that's the case. We've got a very solid plan to ensure that there is no gap in our nation's submarine capability, and there is a very advanced plan that will see a number of our current Collins class submarines going through a life of type extension program, which will ensure that capability gap does not exist.

[ENDS]