Press Conference with the Prime Minister, Minister for Defence and Minister for Defence Industry - Offshore Patrol Vessels project

PRIME MINISTER:

Well, good morning. We are undertaking the largest revitalisation, the largest modernisation, the largest investment in Australia’s Navy since the Second World War.

We are giving you, the men and women of our Navy, the capabilities to keep our borders secure, to keep us safe in times of greater uncertainty and greater risk.

We are building 54 naval vessels, that’s our commitment and today, we’re announcing that we have selected Lürssen as the designer and prime contractor for 12 Offshore Patrol Vessels.

These vessels have three times the displacement of the current Armidale Class patrol boats. These are substantial vessels which will be a vital part of our Navy, our Navy’s capability in keeping us safe.

They will be built in Australia by Australians, with Australian steel, keeping Australia safe and they will give you the capability you need to do so.

Together with the nine Future Frigates, the 12 Future Submarines and the 21 Pacific Patrol Boats, which are being built now, right now, they are going out to our neighbours, as part of their maritime security. 54 vessels, that is our commitment.

I noticed there was a 10-year anniversary today. Let me just remind you that the previous government did not build one Australian naval vessel in one Australian shipyard. Nothing.

This is the initiative of my Government. The Coalition is undertaking this work.

I’m here of course with the Defence Minister, Marise Payne, the Defence Industry Minister, Christopher Pyne. I am here with the Chief of the Defence Force, Mark Binskin, Vice Admiral Barrett, the Chief of Navy, Greg Moriarty, the Secretary of the Defence Department and Kim Gillis who is the Deputy Secretary in charge of Capability, Acquisition and Sustainment.

I want to say, to all of you - to Kim and all of the team in Defence, in uniform and as part of the Department - you have done a remarkable job in bringing this project together to the point that we can say that we have appointed and selected the prime contractor and designer for these vessels, which is Lürssen, international shipbuilder of great renown.

Now, can I say the Offshore Patrol Vessels will start construction in the second half of next year, in Adelaide, cutting steel in the second half of 2018. The first two vessels will be built in Adelaide at Osborne and then by 2020 when the construction of the Future Frigates begins, the construction of the Offshore Patrol Vessels will move to Henderson in Western Australia.

This is a vitally important part of our capabilities.

Australian jobs, Australian workers, Australian steel for Australia's Navy, to keep Australia safe in these times of greater risk and greater challenge.

I will now asked the Defence Minister and then the Defence Industry Minister to add to my remarks.

SENATOR THE HON. MARISE PAYNE – MINISTER FOR DEFENCE:

Thank you very much, Prime Minister. To Prime Minister Turnbull, to Defence Industry Minister Pyne, the CDF, Chief of Navy, the Secretary of the Department and Deputy Secretary Kim Gillis, to the men and women of the ADF and the APS members of Defence who are here this morning, thank you very much for joining us here for what is an extremely important announcement for Navy, for Defence, and indeed for our nation.

This follows from the announcement that the Prime Minister and I made in April of last year, in relation to our surface shipbuilding plans. And it confirms our commitment to the construction of our Offshore Patrol Vessels as we outlined then.

We are delivering on our plans to ensure that we create a more capable and cutting edge ADF.

We are delivering on our plans to create a sovereign continuous naval shipbuilding industry.

For decades to come, these Offshore Patrol Vessels which the Prime Minister has outlined will play a vital role in securing our borders and protecting our interests in the region.

And it is a region which is becoming increasingly uncertain. The complex strategic environment in which we find ourselves necessitates a strong focus on security, and that is what your government is doing in undertaking an unprecedented peacetime modernisation of our ADF.

Most importantly, these OPV’s will be a significant capability leap forward over the current patrol boat fleet, and it will enable us to meet those objectives of security in this strategic environment.

They are 80 metres in length. They are going to be larger and more capable than the current Armidale Class. They will be able to embark unmanned aerial, underwater and surface vehicles and operate larger sea boats which are essential to boarding operations. They will conduct enhanced patrol and intelligence and surveillance missions, search and rescue, humanitarian assistance and disaster relief, and border protection missions, whether that is in peacetime or in conflict. And in particular, they will give Navy the capability Navy needs to ensure that our maritime border security requirements can be met.

They will be able to conduct detection, identification, interception and boarding operations all year round, day and night, across the very unique operating environment in which Australia works.

They will be able to undertake extended operations with enhanced range and endurance to support ourselves further from our shores, particularly, and importantly, across maritime Southeast Asia, the South Pacific, the Indian and Southern Oceans, and the traditional areas, with which we are all familiar in northern Australia, such as the tropics in the cyclone season.

As we have already announced, we have a SAAB Australia developed 9LV Combat Management System being mandated in the Offshore Patrol Vessels. That is part of our enterprise approach to this capability, to combat management systems, and will ensure commonality across Navy's minor fleets.

That commonality is very important for us. It helps to reduce training requirements. It ensures we have the best indigenous developed capability across all of our ships.

We need to support the introduction of the new OPV’s with infrastructure works as well. HMAS Stirling where I was just 10 days ago turning the sod. HMAS Coonawarra and HMAS Cairns will be upgraded both in wharfing and in infrastructure.

Importantly, we will ensure that local trades and industry are able to benefit from those, from that work.

Most importantly though is the investment in capability for the requirements of Navy, and this investment will go to ensure that Australia is best able to respond to the future challenges in our region and to seize opportunities as they present themselves.

It is a great day for Navy as I said at the beginning of my remarks, a great day for Defence, and indeed a great day for our nation.

Thank you Prime Minister.

PRIME MINISTER:

Thank you.

THE HON. CHRISTOPHER PYNE MP – MINISTER FOR DEFENCE INDUSTRY:

Thank you very much Prime Minister, to you and to of course my Parliamentary colleague Marise Payne. Marise has talked about the capabilities of the Offshore Patrol Vessel decision that we have made this week and we are announcing today.

Today is a great day for Australian sovereign shipbuilding. My job is to put into action the government's Naval Shipbuilding Plan, which we also released earlier this year.

Today's announcement means that the 12 Offshore Patrol Vessels will be designed by Lürssen, the German shipbuilder of 140 years standing, and they will be the prime in this contract.

For Australian naval shipbuilding, we are putting into place the vision that the Prime Minister has brought to defence industry and Defence, since he was Prime Minister.

The Australian Submarine Corporation, the ASC in Adelaide will build the first two of these Offshore Patrol Vessels, filling in Labor's valley of death as much as we possibly can. And we obviously put in place other measures to also fill in Labor’s valley of death and we will cut steel at the end of 2018, in the second half of 2018, meaning we will have 400 jobs working on the Offshore Patrol Vessels in Adelaide, and then 400 jobs in Henderson when the project transfers there and the final 10 of the 12 are built in Western Australia using all the capabilities that are available in Henderson at Austal and at Civmec which means that we are again bringing an innovative and clever solution to issues like a Navy wide enterprise approach to the combat management systems, and now, to the naval shipbuilding.

The Pacific Patrol Boats have already begun at Henderson, being built there by Austal. The Offshore Patrol Vessels decision has now been made. The work can begin. The infrastructure work that Marise has talked about has already begun.

So we are creating the jobs. There will be another 600 jobs that are indirect as a consequence of the Offshore Patrol Vessels. That is 1000 jobs across Adelaide and then 1000 jobs across Henderson.

And in Adelaide, they will be replaced by the work on the Future Frigates, which is about 2,200 jobs.

So the Turnbull Government’s vision is starting to take shape.

The capability is being delivered that Navy needs and wants with the Lürssen design. The naval shipbuilding, the sovereign shipbuilding capability that we want is being delivered by building these ships in Australia with Australian workers, with Australian resources, using Australian steel, driving jobs and growth in our economy.

PRIME MINISTER:

Thank you. CDF?

AIR CHIEF MARSHAL MARK BINSKIN AC – CHIEF OF THE DEFENCE FORCE:

Prime Minister, ministers, thank you very much for coming here today in making this announcement in front of the team that has done all the hard yards here to bring this to fruition.

From the ADF point of view, this is a great capability milestone for us. The decision and the announcement represents a point where we can take a significant leap forward with our Offshore Patrol Vessels in being able to patrol our waters to the North.

The PV80 Lürssen vessel is one of the most capable OPV’s in the world today and it will meet all of the needs that we have. It will improve our contribution to maritime patrol and response, our constabulary mission around Australia and across the vast maritime spaces that we are accountable for in this region.

The greater range, the greater endurance, the better seakeeping, the armament with a 40 millimetre gun, the larger sea boats, state-of-the-art censors, command-and-communication systems that are not only interoperable with our own ADF assets, but also with the Australian Border Force and more importantly our partner nations around the region.

Importantly, this vessel for us will be more adaptable and it has growth potential that the vessels that it is replacing don’t.

Now, as the Minister said, the ability to use unmanned aerial vehicles and autonomous systems in the future will be very important to us as we introduce those technologies.

All that means that we will have better flexibility, better capability.

Home-ported in HMAS Stirling in Perth, HMAS Coonawarra in Darwin and HMAS Cairns in northern Queensland means that we will be positioned for operations around northern Australia any time that we are required to do it.

In practical terms for the ADF, broadly, but more specifically for Navy, the broader range of operations, the greater distance gives us the ability to protect the resources in the Australian maritime environment.

These vessels will ably serve the nation, ably serve Navy and ably serve the sailors and officers that will serve on them for decades to come.

So on my behalf, of everyone that is here today, can I thank you all, the team, Capability Acquisition and Sustainment group, Navy and the broader department, all of those areas that were responsible for getting the project to this point today, in record time. Thank you.

PRIME MINISTER:

Thank you very much. Chief of Navy, Vice Admiral Barrett.

VICE ADMIRAL TIM BARRETT AO CSC RAN – CHIEF OF NAVY:

Ladies and gentlemen, I will be brief. Firstly, this ship that was announced today will meed Navy’s needs. It will go further, it will be able to be at sea for longer and it will achieve the tasks that we have been doing successfully already, even better.

The decision has been made to the team that we have now acknowledged here today, our role is now to deliver on that decision. Let’s get on with it. Cheers.

PRIME MINISTER:

Well said. Thank you very much. Do we have some questions?

JOURNALIST:

Why have you chosen a designer from one team and a builder from another team? And wont that add time, cost and risk to the program?

MINISTER FOR DEFENCE INDUSTRY:

Well, David, I think your characterisation of that is not correct.

The design that has been chosen is the Lürssen design and the Lürssen team with ASC and Civmec and the prime in the project will be Lürssen. ASC will build the first two ships in Adelaide and Lürssen will team with Austal and Civmec in Henderson to use all the resources that are available in that particular precinct.

So we haven’t swapped one and the other. We are using all the resources that are available to us which is an intelligent way to approach, wanting to build a sovereign Australian shipbuilding industry.

The difference between what the Turnbull Government has decided and what previous governments have decided is rather than simply picking a design and saying ‘we don't care where you build it, we want it off the shelf, at best value, and highest capability’ - we are saying that we want the highest capability but we do care about growing our sovereign Australian shipbuilding industry and that is why we are using resources that are available to us at ASC, Austal and Civmec.

JOURNALIST:

But Austal will do the bulk of the building right? And Lürssen did not choose them as their partner to team with, so-

PRIME MINISTER:

That is subject to negotiation and that is subject to a commercial discussion which is yet to be had, which has begun, but obviously we can't comment on that today.

JOURNALIST:

Prime Minister, can I ask a question about your dining partner from Sunday night?

PRIME MINISTER:

Just hang on. Can we just deal with shipbuilding first?

JOURNALIST:

Mr Gillis, I think you referred to “unnecessary complexity” in a Senate hearing previously. Does this not sum up unnecessary complexity in a program like this?

KIM GILLIS – DEPUTY SECRETARY OF THE DEFENCE DEPARTMENT, CAPABILITY ACQUISITION AND SUSTAINMENT:

Not at all. This is the smartest way of actually doing this acquisition.

JOURNALIST:

Why?

MINISTER FOR DEFENCE INDUSTRY:

For the reasons I've just described.

PRIME MINISTER:

Any other questions about our naval shipbuilding?

I just want to add to what Christopher said and what Marise has said. This is a great national enterprise. I think the first time I heard that, Vice Admiral Barrett, was from your lips. This is a great national enterprise.

Given the scale of our defence expenditure, our nation deserves and must have a national sovereign defence industry - obviously we’re talking about building naval vessels today - a sovereign naval ship building industry. That is what we’re building.

These are decisions that will benefit Australians for decades to come. Not simply in terms of the capabilities the Defence Minister described, but in terms of building the investment, the jobs, the technology, the industry, that will underpin our economy.

This is a great national enterprise; capability, industry, security and prosperity. As I was saying yesterday, the White Paper Launch at the Department of Foreign Affairs, they go together, this is how you see them melded in this great national enterprise of naval shipbuilding.

JOURNALIST:

Austal made a tacit threat effectively that if it didn't win this contract, then jobs would be lost in Perth. That didn't go down very well in some circles, have they been rewarded?

MINISTER FOR DEFENCE INDUSTRY:

It’s not possible to lose jobs in naval shipbuilding when you are building 21 Pacific Patrol Boats, 12 Offshore Patrol Vessels, nine Future Frigates beginning in 2020 and 12 submarines.

The challenge the government faces is actually finding the many thousands of skilled workers that we need for the ship building enterprise and then of course about quadruple that number that we need in the indirect jobs and the supply chains across the economy.

So there’ll certainly be no jobs lost, there can only be jobs created, because think of at the same way as we made the decision about the 9LV CEA phased array radar and the Aegis combat system for the Future Frigates.

We wanted to use all the available resources to us and we wanted to maximise the Australian involvement in that major project. We’re doing exactly the same with this $3.6 billion project. That is the sensible intelligent way to proceed which means we guarantee our jobs, we build our economy and we deliver the capability that Admiral Barrett needs and that the CDF need.

MINISTER FOR DEFENCE:

What is the really important message to the young men and women of Australia, is that if they have an interest in science and technology and engineering and mathematics, then we are where they need to be; whether in the ADF, in the APS in Defence, whether it’s in defence industry. This is a multigenerational undertaking which is going to change the face of the Navy, but also change the face of defence capability more broadly. We want all of those people, so to talk about losing jobs is bordering on farcical. To talk about growth though is the most important message of all.

JOURNALIST:

Prime Minister if I could turn to Sunday night, I understand you dined with Liu Xiaodong who is Director of the Australian Energy Windfarms, about four days after his company donated $40,000 to the LNP. Was access to the Prime Minister conditional on that donation and what research was done on a company whose Chinese parent company says its Australian company is established to work in line with the One Belt, One Road initiative?

PRIME MINISTER:

Well I've attended an LNP fundraising dinner, there were a number of guests there.

JOURNALIST:

There were 12.

PRIME MINISTER:

Okay well there were 12 guests, that is a number. 12 is a number.

[Laughter]

The gentleman you described, I don't recall having a detailed discussion with him about - 

JOURNALIST:

You sat next to him Prime Minister, Lu XiaoDong.

PRIME MINISTER:

Yes that’s true and his English was very limited. So we didn't have a detailed discussion, but he was there and obviously we have a lot of Chinese investment in Australia. As I said yesterday at the launch of the foreign policy White Paper there are occasions where foreign investment, including Chinese investment, does not get FIRB approval for reasons of national interest, but by and large Australia welcomes foreign investment.

JOURNALIST:

But it was a dinner, you must had a conversation? What was discussed? What did they want?

MINISTER FOR DEFENCE:

Who did you have dinner with on Sunday night?

JOURNALIST:

My wife.

PRIME MINISTER:

It was a general discussion about the economy. I don't recall, certainly nothing of particularity about investment policies of that kind were raised. As I said, his English was limited and the discussion accordingly was fairly concise.

JOURNALIST:

Prime Minister, you raise the 10-year government of the Rudd Government's election and John Howard’s defeat in Bennelong, where John Alexander is now under some serious threat. What's your message and what’s the symmetry involved here?

PRIME MINISTER:

Well it's a reminder of what happens when you have governments and politicians that are reckless about Australia's security.

When Kevin Rudd came into office in 2007, he unpicked John Howard's strong border protection policy. In 2007 the boats had long stopped. Rudd came in, unpicked that policy and as we know there were 50,000 unauthorised arrivals and tragically 1200 deaths at sea.

That was the consequence of the Labor policy.

Now remarkably, Bill Shorten has chosen as Labor's candidate in Bennelong, Kristina Keneally, who is a strong advocate for bringing asylum seekers from Manus Island to Australia. Kristina Keneally wants to send a signal to the people-smugglers: “Come on down”. That’s her signal.

We know, we don't have to theorise about border protection policies. We know what works and we know what doesn't.

We have restored John Howard's strong policies and as you know, there has not been a successful people smuggling expedition to Australia in well over 1000 days.

Now I am pleased to say in terms of Manus, that the reports we have are that busloads of the people at Manus are leaving. They’re complying with the lawful directions of the PNG authorities and moving to the alternative facilities available to them and that's as they should. That is precisely what you should do if you’re in a foreign country, you should comply with the laws of that other country.

What Kristina Keneally is saying and Bill Shorten - you saw how mealy-mouthed he was yesterday, there was no clarity there – Labor, endorsing Kristina Keneally, are endorsing a candidate who believes the people smugglers should get what they want.

Lets not kid ourselves, again this is not theory. We know that they use statements by leading politicians in Australia as a marketing tool.

They will be out there right now saying that Kristina Keneally has been picked by Bill Shorten.

They’ll be saying that the Labor Party is now changing its policy, as they've done in the past and they will be using that to get more people onto boats to try to test our will.

Well, I can tell you this. My Government, my Coalition Government is not going to outsource the security of our borders to people-smugglers.

Labor made that mistake once and by choosing Kristina Keneally, Bill Shorten has sent a powerful signal that they’re going to do it again, if they ever have the opportunity to form a government.

JOURNALIST:

Prime Minister on the White Paper, the Chinese-

PRIME MINISTER:

The Foreign Policy White Paper.

JOURNALIST:

Correct, the Chinese don't seem too happy. The Foreign Ministry said we should stop making “irresponsible remarks” on the South China Sea. State media called us an “outpost of irrelevance” or some words to that effect. Has the White Paper gone too far in that regard?

PRIME MINISTER:

The White Paper is a clear-eyed, hard-headed objective of Australia's national interests. It is a statement of our sovereignty. It clearly analyses the circumstances in which we live; of greater risk yes, but greater opportunity as well.

It’s clear eyed, it’s hard-headed. It is Australia's national interest that is in that White Paper and nobody else's.

JOURNALIST:

They’ve been very critical though.

PRIME MINISTER:

Well I've heard different reports from China and all I can say to you is that when you survey the Chinese media, you are reminded that it's not only the Australian press gallery that has a sensationalist wing.

JOURNALIST:

There are references to more practical support for the US in Asia. What bearing will that have on the forced posture initiative? Can we expect more marines through Darwin, can we expect more US Air Force assets here?

PRIME MINISTER:

Our corporation will continue to develop. But can I say in the region, you’ve seen a very material increase in our involvement and our support for example, to the Armed Forces in the Philippines.

When I was at Aguinaldo in Manila with the Chief of the Philippines Defence Force, General Guerrero, he described the assistance the ADF has given the Philippines in their successful battle to retake Marawi - which was an ISIL insurgency, an Islamist terrorist insurgency in our region - he described our support as a game-changer. So we now have trainers there, 80 soldiers there training the Philippines Armed Forces in urban warfare. Believe me, the frontline in the battle against terrorism starts in Australia and it is all around the world.

Nowhere is far away from anywhere else. We have to defend our security at home and work with our partners and neighbours in the region. That's what we are doing.

JOURNALIST:

Can I ask you, closer to home, Moore Park, which you have been very protective of previously, do you have concerns about its future, given the redevelopment of Allianz Stadium?

PRIME MINISTER:

Well I look forward - I've seen the announcement, obviously it is in my electorate and I understand the issues there about protecting green spaces, particularly so close in the inner city, where Moore Park is -  I look forward to speaking with the State Government about it.

I am confident that the concerns about protecting green spaces will be met. But it is clearly going to be a matter of very keen interest to me and of course all of my constituents.

We will just take one more.

JOURNALIST:

Can I ask on energy Prime Minister, is South Australia once again standing in the Commonwealth's way of getting agreement and what's your message to them?

PRIME MINISTER:

Well they were outvoted, so they tried to stand in the way but they didn't. No, Josh Frydenberg has achieved great consensus at the COAG Energy Minister's meeting today and I want to congratulate Josh and all of his colleagues there.

What they've recognised is that the National Energy Guarantee which we have presented as the responsible plan to deliver affordable and reliable energy and of course, meet our emissions reduction obligations, that is going to be the subject of further work as it is built out and fleshed out and developed and will come, I understand to another COAG meeting in April.

That’s exactly as it should be. I want to congratulate Josh, congratulate the Energy Ministers. They've resisted the temptation to play politics with this. Get on with the job.

You saw the endorsement that the National Energy Guarantee has had. It’s had everything from the World Wildlife Federation and the ACTU, to all of the peak industry groups. So there's strong support for it.

This is a plan that is built on engineering and economics. The days of picking winners, the days of ideology and idiocy, which we've seen in past energy policies, particularly I’m afraid to say, in South Australia under the Weatherill Government, that should be put behind us.

Let’s get on with the job - affordable and reliable power, keep the lights on at a price Australians can afford and of course meet our international obligations.

Okay, thank you very much.

[ENDS]