Minister for Defence – Transcript – Doorstop at Keel-laying ceremony for Air Warfare Destroyer (AWD) HMAS Brisbane, Techport Australia, Adelaide

MINISTER:

Thank you all for attending today. Today is a very significant milestone, with the keel laying of the second vessel of the Air Warfare Destroyer program. This is an extremely complex programme, as you can see with all of the workers here at ASC Techport. It is very labour intensive, with skills at the high end of industrial capacity. We are very proud today, the Commonwealth is very proud, Defence is very proud of being able to be here and see this second vessel have its keel formally laid as we go forward with the transformation of the Royal Australian Navy to its next-generational capacity. This is a strategic capacity, as I say, that we are very proud of.

JOURNALIST:

(Question inaudible on new White Paper)

MINISTER:

We said 18 months from the election, and we are working on it as hard as we can now. Keep in mind that there are substantial financial issues for us, we have been left a complete mess. But we are hobbling together as best we can a way forward over the long term to refinance defence and to catch up on the $16 billion that has been taken out of the portfolio over the last four years. That is our problem now, we are working on it, we said 18 months and I see no reason to change that tune.

JOURNALIST:

We assume that means there might be an increase in Defence spending in the upcoming budget (rest of question inaudible)

MINISTER:

I would not anticipate what is going to be in the budget. I am not in the business of speculating what is going to be in any budget at any time. We will see what is in the budget when the budget is produced by the Treasurer. But let me say there are a number of significant issues in the long term capital management for Defence which we are addressing as hard and as fast as we can.

JOURNALIST:

(Question inaudible)

MINISTER:

The project overall won’t have an overrun until we have finished the project, if there is one. Now, things come and go with ships – with labour there is a whole lot of flexibility in the program, there is a lot of contingency. We won’t know the final figure until the last boat is in the water.

JOURNALIST:

(Question inaudible)

MINISTER:

I can confirm that the contingency has not been spent already.

JOURNALIST:

(Question inaudible)

MINISTER:

There are always media reports on a technically complex program such as this. I am not going to support any of those derogatory comments about this program. As you can see I have an almost completed Air Warfare Destroyer behind me, and I believe the program is going to deliver a fabulous capability for the Navy. A capability that all Australians can be proud of and that the Commonwealth can be very satisfied with.

JOURNALIST:

Minister, in December you referred to some ‘deep and unresolved issues’ in the AWD program and announced an independent inquiry. What are those issues and what has happened to the inquiry?

MINISTER:

I am working on the inquiry as we stand here now, and there may be an announcement on that in the near future. But, can I take you back to the ANZAC Frigates – we produced 10 of those vessels, two of them in New Zealand, the fact was the program waxed and waned with a whole lot of influences. Principally the mining industry, the mining industry soaks up skilled workers and we take a hit. And so the pendulum vacillates over the 10 years of the cycle of this project.

So let’s not start pinning any tail on the donkey until we have seen the capacity, the standard and the cost efficiency of this program and we have a fair way to go.

JOURNALIST:

(Question inaudible)

MINISTER:

There is nothing I am concerned about at the moment.

JOURNALIST:

(Question inaudible)

MINISTER:

Well I don’t believe it is government policy for a 4th Air Warfare Destroyer at this time because we have a White Paper coming. Those issues are very important to inform the White Paper and there is a possibility that this hull can be used for the SEA 5000 programme but we are a long way from finalising that. So, let’s just not try and speculate too much before we put everything together in a White Paper so we can all see the strategic environment as we anticipate it will be, you will all see the Defence Capability Plan, and you will see the defence spending regime.

JOURNALIST:

When do you see that the construction of the new fleet of submarines will commence here in Adelaide (rest of question inaudible)

MINISTER:

I don’t want to put a time on that because today I am meeting with people who are intimately involved with that program, which is even more complex than this program, and we are working to get a full understanding of the best way to deal with that. At the moment we have two options on the table – the son of Collins, and a wholly new bespoke design. Now I have seen nothing at this point in time to suggest that we should deviate from that plan, but I am still getting to the (inaudible) of where we are at.

JOURNALIST:

How committed is this Government to ensuring that the valley of death doesn’t really devastate capacity in South Australia, and are we likely to see projects brought forward?

MINISTER:

I am still working on plans for that; I don’t want to presume what the National Security Committee will (inaudible). But let me tell you we are working towards it.