UNCERTAINTY SURROUNDS NATIONAL SHIPBUILDING AGENDA

The Senate Economics Committee inquiry on the future of Australia’s naval shipbuilding industry held public hearings in Perth on Monday and in Adelaide on Tuesday.

These hearings have thrown more doubt on the Liberal’s commitment to a truly national shipbuilding industry that will create Australian jobs and work for Australian supply chain companies. 

The Committee heard evidence from a range of expert witnesses, many of whom are still waiting for the Government to produce its long-overdue Naval Shipbuilding Plan, which the Government has been talking about releasing since 2015.

In February 2017, Minister for Defence Industry Christopher Pyne said that the release of the plan was “imminent” – but industry and workers are still waiting on tenterhooks.

Australian industry cannot make investment plans for the future without any certainty around the level of work for the local supply chain from the $90 billion pipeline of naval shipbuilding projects.

The Committee heard evidence from a range of witnesses, many of whom questioned the Turnbull Government’s resolve to use Australian materials, preserve Australian shipbuilding jobs and utilise national supply chain capabilities.

  • The Western Australian Minister for Defence Issues, the Hon. Paul Papalia, described naval shipbuilding as being “disproportionately weighted towards South Australia,” and that there was “more politics than pragmatism involved” when it came to the Turnbull Government’s decisions on naval shipbuilding.
  • The Chamber of Commerce and Industry of Western Australia said that all Australian Government vessels, including research ships, should be built in Australia. The Chamber said it has become too easy to say “we don’t do that in Australia” and gave examples of Australian supply chain firms that have been cut out of lucrative defence tenders.
  • The Australian Manufacturing Workers’ Union (AMWU) said that it was not clear what the Government is doing to ensure local SMEs are supply chain ready to participate in upcoming shipbuilding and sustainment work. According to the AMWU, workers were particularly concerned about the creation of thousands of jobs in France through the $50 billion Future Submarine project, at the expense of shipbuilding jobs in Australia.
  • Defence SA, representing the South Australian Government, said that Australian content must be specified in naval shipbuilding contracts – otherwise all you will get from the contractors in terms of local content is ‘best endeavours’. Defence SA have said very clearly that “we must specify certain local content targets in our contracts and we must have a plan. We cannot expect it to be derived by itself”.
  • This was backed up by the Victorian Defence Industry Advocate the Hon. Greg Combet, who said that “unless there is a concerted public policy, including contractual commitments to transfer technology and encourage industrial capability, we won’t have a sustainable industrial base in shipbuilding and submarine technologies in the years to come.”

It is not good enough for Government to simply say that ships and submarines will be built in Australia - but have no clear means to secure that objective, nor the necessary skills and capabilities for the ongoing sustainment of these vessels.

Australia needs a national shipbuilding program where Australian companies and Australian workers get a chance to design, build and sustain the capabilities this country needs.

The Committee will deliberate on the evidence presented at these hearings and make recommendations to Government in its final report, due to be tabled by 1 December 2017. 


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