Interview / Sky News Live, AM Agenda

 ANNELISE NIELSEN:

And here we are now joined live from Sydney by the Defence Industries Minister, Melissa Price. Melissa, thank you so much for your time joining us this morning. Now, this is a new portfolio for you. What’s your number one priority as Defence Industries Minister?

MELISSA PRICE:

Well good morning, Annelise, and may I say I really love the colour of your attire today. Clearly, we both got the memo.

ANNELISE NIELSEN:       

We’ve got the pearls going as well.

MELISSA PRICE:  

And the pearls going as well. Well I’m from Western Australia, so why wouldn’t I?

We’ve just finished what I call the 100-day review of the portfolio and I’d say that there are two priorities. The first priority is to ensure that as many small Australian businesses are in our defence industry supply chain, so that’s a number one focus. And related to that is the skills piece.

So we need to improve the skills of the Australian workforce to make sure that we’ve got the jobs and you know, I think a good stat, if you just look at shipbuilding alone,  we’ve got around 4000 Australian jobs in shipbuilding with our very, very ambitious project of 57 vessels being built in Australia. We’re going to need 15,000.

So we need to focus on what is the skills set we need and where are we going to get the people from. And next week, we’ve got the Inaugural Skills Summit in Western Australia, bringing together a large percentage of business industries, universities, TAFEs and also you know, bureaucrats from right around the country so that we can start talking about well what are the solutions. I think we’ve identified what the problems are, now we need to move to solutions.

ANNELISE NIELSEN:       

One of the problems that we’ve seen from a question that Rex Patrick raised in the Senate the week before last is that the original commitment for Australian subs in particular was that we were going to have 90 per cent local content and then that was then revised a year later down to 60 per cent local content. Last week, it was clarified that it’s 30 per cent local content. What are you doing to maximise jobs from local content?

MELISSA PRICE:  

Well I think if you ask the primes, they’ll say that they’ve clearly got the message from me is - and in fact, I can go and say I’ve had a number of primes say to me: well Melissa, you don’t really care about the primes anymore; you’re really focused on the amount of Australian industry in the supply chain. I say to them well I care very deeply about the primes but you’ve got your contract, you’ve got your commitments to the Australian public. What I’m going to do is make sure that they actually comply with that contract and you know, what I mean by that is of course, you know, building to spec but also making sure that we’ve respect to Australian industry content, that they actually deliver on that. But I’m not fixated on minimums; I’m driving to ensure that we get the maximum amount. And what I’m hearing around the traps, and I’ve had a very good day out at Wacol just outside of Brisbane yesterday, is that you know, the primes are really listening and they need Australian industry. This is not a matter of: oh well, we might use them if we push to it. They actually need Australian industry. So you know, that’s the good news.

ANNELISE NIELSEN:       

So what is the government doing though to ensure that that does happen?

MELISSA PRICE:  

Well clearly, there are contractual obligations and you know, we will continue to audit that. But it’s more about convincing – well actually, I don’t even think it’s convincing; just making sure that the primes understand what the opportunities are for Australian industry. And what we’re doing as a government is supporting those good bright ideas that, you know, the cutting edge ideas to make sure that Australian industry are in positions to actually get those contracts.

I mean just Innovation Hub grants, for example, over $150 million worth of Innovation Hub grants in defence industry alone were granted last year. Now, 85 per cent of those grants were to small business so these are small businesses that have got good cutting edge ideas with respect to defence industry and that’s going to position them to ensure that they get more work in the future from those primes.

ANNELISE NIELSEN:       

[Audio error] but what I’m seeing on the ground with some of the contracts are significantly of an excessive 60 per cent …

MELISSA PRICE:  

[Interrupts] [Indistinct] I beg your pardon?

ANNELISE NIELSEN:       

[Indistinct] Rex Patrick. That figure came from – it was in the Senate. That figure came from a question put by Rex Patrick in the Senate.

MELISSA PRICE:  

Well as you would imagine, a number of the shipbuilding programs – if you just take submarines for example, I mean we’re in the design phase at the moment, but what I said to you at the outset is that there’s going to be 15,000 jobs. So a number of the contracts haven’t been let and what I’ve been really pleased with, if I just talk about the submarine program, is I went out to Cherbourg out in France probably five or six weeks ago to catch up with Cherbourg out at the Naval Group and of course, it was wonderful to see that so many Australians out there; around 60 young engineers in particular, most of them from Adelaide, and you know, they’re all heading back to Adelaide within the next year or so to be able to work on that shipbuilding project.

But you know, I think if you said right at this point in time, I didn’t hear the Senate commentary so I can’t possibly comment on that. But what I’m hearing on the ground is that significant Australian contracts are being let with Australian companies. And only two or three weeks ago, I announced another 11 contracts or so with Rheinmetall.

Now, they’re small Australian businesses; many of them have never been involved in defence industry and those contracts range from Burnie in Tasmania across to Western Australia. And you know, yesterday out at Wacol at Boeing’s new facility, I met four Australian contractors; they’ve all got more work with Boeing and you know, and have every expectation they’re going to get more. So I’m not sure what the answer was, with respect from Senator Patrick. But what we need to understand is shipbuilding of course is an incredible nation building exercise, but our investment of $200 billion, our Federal Government in our defence capability, it’s much more than just ship building.

ANNELISE NEILSEN:       

You mentioned those jobs in Adelaide; there is a push from Western Australia right now to be getting the contract to be doing ship maintenance out of WA because the state’s in a downturn, would be good Federal Government support. Why shouldn’t we be moving these jobs to WA from South Australia?

MELISSA PRICE:

Well I think you’ve heard it very clearly from the Minister for Defence that at the moment there’s been no decision made about where the full cycle docking is going to be performed so it would not be correct for me to comment on that. But I think people need to remember that at the moment we’ve got 4000 jobs in shipbuilding and we need 15,000. So I certainly don’t see this as winners and losers as far as I’m concerned this is a national shipbuilding enterprise and there’s winners everywhere.

ANNELISE NEILSEN:       

So there’s the potential for a separate project in Western Australia to the Osborne Park facility in South Australia?

MELISSA PRICE:

Yeah sorry I didn’t hear the question.

ANNELISE NEILSEN:       

So you think when you say that there’s potential for jobs all around the country does that mean there’s potential for a separate maintenance facility in Western Australia to the one in South Australia?

MELISSA PRICE:

No, I’m not saying that I’m just talking about the current work that we’re aware of. I mean Sydney could build the biggest shed in the southern hemisphere, that’s to build the OPV’s with Luerssen. Now I have no doubt that they have aspirations to do other work there. I’m not talking about maintenance work, but other new builds and potentially export opportunities. And of course, we’ve got Austal out in Henderson as well who are building the pacific patrol boats. So there’s significant work and there’s also other boats that we talked about that would be built, two of the hydrographic vessels that we talked about during the election. And you know, we [indistinct] for those boats to be built in Western Australia. So there’s no shortage of work.

ANNELISE NEILSEN:       

When it comes to Australia’s submarine fleet, there has been discussion we saw from this international maritime conference in particular raised it again, about whether Australia should have nuclear submarines. Would you support the development of nuclear submarines in Australia?

MELISSA PRICE:

No our Government has been very clear [audio skip].

ANNELISE NEILSEN:

But the submarines that have been designed with the capacity to be able to add nuclear engines into them further down the track, we’re talking 30 years down the track. So you’re ruling that out even 30 years down from now?

MELISSA PRICE:

Yeah well we have no plan for that and that’s not our contract with Naval Group.

ANNELISE NEILSEN:

Why wouldn’t Australia consider having nuclear submarines?

MELISSA PRICE:  

Because that’s the decision that the Government has taken, it’s pretty straight forward. We’ve got our contract with Naval Group, we’ve made a decision on what the design of our submarine is going to be and the decision’s been made.

ANNELISE NEILSEN:       

But I’m just asking why that decision was made.

MELISSA PRICE:

Well at the moment you’ll know that nuclear energy is not allowed in our country and that’s a matter for the legislators and so therefore we’ve chosen a design that we think is fit for purpose for our country.

ANNELISE NEILSEN:       

But part of that design was that you could make these submarines nuclear further down the track. So you’re ruling that out completely?

MELISSA PRICE:

Well what I’m saying is over the next couple of years, the next three years, the design of the submarines will be completed. And our contract with Naval Group is for a submarine which is not nuclear. It’s pretty straight forward no matter which way you ask me the question, it’s pretty straight forward.

ANNELISE NEILSEN:       

No I know. It was just the Vice Admiral of the Navy that raised the prospect that these submarines have been designed to be nuclear at some stage, that that’s an option left open to the Government. So I was just wondering if that was something being considered.

MELISSA PRICE:

It’s not something being considered and that’s not our contract with Naval Group. They themselves have made that very clear.

ANNELISE NEILSEN:       

Now one of the interesting things with the big Defence projects happening at the moment is a lot of the jobs you’re talking about, they’re very hands on. They’re things like bashing, fabricating, welding, very high-vis jobs. But will you, as Minister, be happy if the smart systems that provide the capability to not have those jobs performed, the stuff we’re importing from overseas, actually takes over those jobs?

MELISSA PRICE:

Well I’m not quite sure what your question is. Are you suggesting that some smart technology will take over the jobs of the welding? I mean what I can tell you is that when I was out at Cherbourg I saw the very, very highly skilled group of welders who are working on the current project in Cherbourg, not ours but another project for Naval. You know they’re individuals, they’re not robots. And so I’m not concerned about that and in fact what I would say is that we need more boiler makers, we need more people to be involved. Not just in ship building but we heard yesterday in Boeing they’ve got about- together with another company, sorry, I’m trying to think about- I went to number of places yesterday, there were at least 20 apprentices that I spoke to and they were all boiler makers. So we actually need to be talking about the skill sets we need. You know, we’ve told all our kids to go to university and we’re in a situation now where we need to unwind that because we need significant hands-on, experienced people, very highly skilled and highly paid by the way, to be able to help us, to be able to build our defence capability.

ANNELISE NEILSEN:       

And just finally, Minister, you’ve moved from the environment portfolio to the outer ministry. Have you learned anything from your experience as Environment Minister that you’re taking to your new role?

MELISSA PRICE:

Well I’m very focused on Defence Industry, what I’m thrilled about is the opportunity to- this is really a jobs portfolio. I’m a construction lawyer, ex-construction lawyer I guess, and what I’m very pleased about is to be able to use the skill set that I’ve gained over those 30 years in the commercial world and in particular focusing on ensuring that we have the maximum amount of Australian Defence companies in the supply chain but also focusing on what are the jobs for the future. So that’s what I’m focused on and I’m thrilled to be in the portfolio.

ANNELISE NEILSEN:       

Melissa Price, thank you for your time.

MELISSA PRICE:

Pleasure, thanks very much.

 [ENDS]