Press conference to mark the handover of the 1 millionth part for the Collins-class submarine

JASON FALINSKI: Ladies and Gentlemen, it's my job to introduce the Minister Pyne to the Northern Beaches today. Obviously what the Government is doing with defence industries and encouraging local manufacturing here on the Northern Beaches is critical. H.I.Fraser is one of many businesses here that are taking advantage of the Government's policies and bringing jobs and investment to our area. I'd like to thank the Minister for coming to the Northern Beaches and also Chris for hosting us here today and I'll now hand over to Minister Pyne. Thank you.

CHRISTOPHER PYNE: Well, thank you very much Jason. It's a great pleasure to be here with my colleague Jason Falinski who has done a great job representing the Northern Beaches in Mackellar since July last year and I have no doubt he'll represent the Northern Beaches for many, many years to come into the future. And with Chris Williams, the head of H.I.Fraser, which is a great example of the Australian defence industry. So today, H.I.Fraser has handed over the millionth part that they have created for the Collins-class submarine. That is a million parts that are keeping the Collins-class submarine in the water over several decades.

And what I really want to impress upon people today is that the commitment that the Government has made of $195 billion over the next 10 years in building defence capability and spending as much of that as possible in Australia, rather than what we have done in the past, which is to be a buyer of overseas equipment and platforms, is a critical part of the Turnbull Government's agenda around jobs and around investment. It can't be underestimated how vitally important to manufacturing a high-tech advanced manufacturing, high value jobs that will be created by defence industry spending in this country. Of course our number one priority is providing the equipment and the platforms that the Navy, the Air Force, the Army, our cyber security arms need to defend our nation, to project our power, to be a good ally to the United States and our friends around the world.

But critically, the difference in the Turnbull Government is that we’re not going to simply send that money overseas to other companies. And H.I.Fraser is a great example of the capability that exists in Australia that we want to turbocharge. So H.I.Fraser has been the beneficiary of programs run by Defence over the years to build defence capability. And what the Government is focused on right now is assisting other companies around Australia to get to that critical point where they can be a trusted reliable partner in defence. That is why we have created the Centre for Defence Industry Capability and put money, real money behind it. The Next Generation Technologies Fund, the Defence Innovation Hub. It is why every decision that I am making as Defence Industry Minister since July last year has been to maximise Australian industry parts of those decisions and that is definitely working.

There has been a sea change in culture in Defence, but also culture in business and in industry. We are seeing workshops being held, whether it is part of the Combat Recognisance Vehicles program, known as LAND 400, whether it is part of the Future Frigates program, the Offshore Patrol Vessels, which we would have expected to attract 50, 60, 70 businesses that are attracting 400 and 500 businesses. So there is a real buzz in defence industry right now and we want Australian industry to take advantage of that.

So one of the reasons I have come to H.I.Fraser is to continue to encourage Australian industry to get involved with defence and take advantage of the kinds of major projects that we are announcing right now and seeing that money flow out into our communities, creating jobs, creating growth, creating investment.

QUESTION: Mr Pyne, the US is going to soon send one of its largest aircraft deployments to Australia and there are quotes in the US media saying that they’re [inaudible]?

CHRISTOPHER PYNE: The Americans are sending what to Australia? I missed what you said.

QUESTION: The largest ever aircraft deployments as part of the rotation(*).

CHRISTOPHER PYNE: Oh I see. Yes they are. Well the United States, of course, has used Australia as a base for many, many decades in many different respects. Whether it’s been cyber security, information gathering, the Marines of course in Darwin and the air force - Australia has real capability in maintaining and sustaining our own aircraft and American aircraft. So the Americans know that if they send their aircraft to Australia and they need to be maintained or sustained in some particular way, it can be done here. And that’s why at the end of last year I was so pleased when Australia was chosen by the Joint Strike Fighter Project office to be the Asia Pacific hub for componentry on the Joint Strike Fighter. We - that followed up winning the right to be the Asia Pacific hub for frames of the Joint Strike Fighter and engines for the Joint Strike Fighter.

This is worth hundreds of millions of dollars and over decades is worth billions of dollars because, of course, the Joint Strike Fighter program is a $1.5 trillion program. Eventually there will be 3000 Joint Strike Fighters in the air across at least 14 countries, defending our values around the world. So we wouldn't have won those contracts to do that if the Americans didn't think we had the capability here and we beat countries like South Korea and Japan.

So we should always dismiss any of those doubting Thomases about the capacity of Australia to deliver in high-tech advanced manufacturing and then maintenance and sustainment. In fact, here at H.I.Fraser, they are part of the RUAG team that won the right to be sustainers and maintainers of the Joint Strike Fighters, as part of my trip to Washington at the end of last year, that secured that contract.

QUESTION: So what have you physically done? You said that you put in measurements to make Australian businesses more competitive. Can you run through what you have done, particularly locally?

CHRISTOPHER PYNE: Well, in the last six months - I have only been the minister for six, seven, eight months - I think we have taken approach to defence industry to a new plane. So what I am trying to do is get out the door those commitments that were policies for the election that are now being - becoming realities. So the Centre for Defence Industry Capability opened its doors in December. The Next Generation Technologies Fund will soon start seeing money flow to businesses to commercialise some of their products and services in the defence industry. The Defence Innovation Hub has already had 20 businesses in January alone, applying to it to take advantage of the fund, the $630 million the Government has put on the table to support industry capability. Because it is one thing to want to do as much in Australia as possible, we actually have to be able to do it. So a big part of my job is building defence industry capability but in terms of doing that, of course, you need the contracts. Businesses have to be able to touch and feel what they are doing. There is no point in virtually becoming capable.

So I have been to Riyadh in Saudi Arabia, I have been to Abu Dhabi in the UAE. I am going to Abu Dhabi again in February. Of course, I went to Washington as part of the Joint Strike Fighter Program. I have just been to Paris and Cherbourg to talk about the submarines, trying to help Australian businesses, whether it is EOS Systems who make remote warfare cannons and guns; whether it is Marathon Targets who make very high-tech targets; Austal who build ships, aluminium ships; Talos who make guns in Australia that they can sell overseas, we are trying to get as many export contracts as possible. And I think there will be some very good news on that front in the coming weeks and months that help our businesses to actually be in business and create jobs. I mean they are some of the proactive things that I have done.

But also importantly, I have also made decisions. So where sometimes things seem to take a while to come through the defence process, we are getting them out the door. So we have downselected the Combat Reconnaissance Vehicles which is a $5 billion program down to Rheinmetall and BAE. And we have insisted that Rheinmetall and BAE maximise their Australian content. And that’s why they are holding workshops all around Australia. We have said to DCNS, who are building the 12 submarines and designing the submarines, they have to maximise their Australian content. So they have been working with Australian business, having conferences, attracting I think several hundred applications from Australian business for them to sell their wares to DCNS because, of course, if a business wins these kinds of contracts, it is worth enormous amounts for their balance sheets. It means they’ll stay in business if they win Defence contracts and become a reliable partner.

QUESTION: On the topic of cyber security, what have you been told personally about your own cyber security, given that you're in charge of a quite sensitive portfolio?

CHRISTOPHER PYNE: Well obviously the Government relies on our advisors at the Australian Signals Directorate and elsewhere within the Government for our cyber security. I’ve been a Member of Parliament for 24 years and I rely on the cyber security systems that we have in place and I’m told that they are second to none. I’ve had my briefing from the Australian Signal Directorate as the Minister for Defence Industry about what I should do and shouldn’t do and obviously I stay within the rules. And I understand that the political parties are being briefed now by the Australian Signals Directorate about potential attempts to breach their cyber security and obviously the cyber security’s a huge part these days of our national security in a way that it wasn’t. And what exercises my mind, as the Defence Industry Minister, is impressing upon business that they are potential targets for cyber espionage as other countries and companies attempt to get into our defence system through our subcontractors in Defence.

So one of our critical requirements for Australian business is if they want to be a defence supplier, they have to have as good a cyber security as the Defence Department has itself and touch wood so far so good.

Okay, thank you.