Press Conference, Adelaide

PRESS CONFERENCE
TUESDAY, 21 JANUARY 2025 
SUBJECTS: Federal government investment in South Australia’s defence industry, AUKUS agreement.

MARK BUTLER: Thanks, everyone, for coming along to ASC. This is such a critically important part of not only our national security infrastructure, but also of Australia, and South Australia’s, industrial base. It’s been operating here since really the cooperation between the Hawke government and the Banner government in the 1980s. And that close cooperation between federal and state government remains a hallmark of the success and opportunity of this precinct. We can see that with the Albanese government and the Malinauskas government.

I’m here as the local member, the member for Hindmarsh, and I’m delighted to welcome federal member and colleague Pat Conroy, Minister for Defence Industry and Capability, and he’ll address a really exciting announcement today. I’m also joined by Louise Miller-Frost, the member for Boothby, her electorate is south of Adelaide, who also has a number of manufacturing operations in that electorate that benefit from this operation and from Pat Conroy’s announcement.

But, of course, this operation would not be possible without the close cooperation and support of the South Australian government. So also we’re delighted to be here with the Premier, Peter Malinauskas, and the state Treasurer, Stephen Mullighan as well.

So with those few words, I’ll hand over to Minister Conroy.

MINISTER FOR DEFENCE INDUSTRY PAT CONROY: Thanks, Mark, for your kind introduction and having me in the electorate. I acknowledge the Premier of South Australia, Peter Malinauskas; Minister Stephen Mullighan, SA’s Treasurer and Minister for Defence and Space Industries; obviously Mark Butler, my ministerial colleague, member for Hindmarsh; Louise Miller-Frost, member for Boothby.

And it’s great to be back at Osborne where Australia’s conventionally armed, nuclear-powered submarines will be built. It will be made with Australian steel by Australian workers and will keep Australians safe and secure. This will be one of the greatest if not the greatest industrial endeavour ever undertaken in Australia and Osborne in SA is the heart of it.

Under our government’s plan, Australian industry will also join the supply chains of the United Kingdom and the United States. And that means more highly skilled, highly paid jobs for workers and a stronger sovereign defence industrial base for Australia.

We’ve already got fantastic examples of Australian industry already demonstrating their ability to contribute to the supply chain of our AUKUS partners. For example, South Australian business AML3D has partnered with the US navy maritime industrial base to produce copper nickel valves, components specifically in the Virginia class submarines. That’s South Australian workers making parts for US nuclear submarines right now.

AUKUS is happening right now and will continue providing incredible opportunities for Australian industry and business. The AUKUS plan, as everyone knows, is to acquire conventionally armed but nuclear-powered submarines, and will create around 20,000 direct jobs. Here at Osborne at its peak up to 4,000 workers will be employed to design and build the infrastructure for the submarine construction yard, and a further four to five and a half thousand jobs are expected to be incorporated building and supporting the nuclear-powered submarines at Osborne.

Today I’m announcing that the Albanese government will invest an additional $262 million over the next two years to support the local defence industry to be AUKUS ready with the skills and capability they need to participate in the nuclear powered submarine supply chain. We’ll expect this will support around 125 businesses across Australia.

This investment will create – support Australian businesses to invest in their people, security capabilities and technology to make sure they meet the high standards required for submarine building and sustainment both for the Australian Defence Force and our AUKUS partners. It’s a leg up into a supply chain that will run for decades, securing the future of hundreds of businesses and thousands of workers across the nation.

This investment includes new initiatives and boosts support for existing programs, including the government’s new and improved defence industry development branch program, which I announced last year. It will also expand the global supply chain program to support major UK and US submarine industry suppliers to provide commercial opportunities for Australian industry to participate in the trilateral supply chain. And it also improves – includes more funding for the defence industry vendor qualification program to accelerate the qualification for Australian products, including mechanical assemblies, castings, forgings and electromechanical components into the US submarine supply chain.

And last week there was another AUKUS milestone when the AUKUS naval nuclear propulsion agreement signed last August came into force. This agreement will support the transfer of Virginia class submarines from the United States to Australia in the 2030s as well as the transfer of information and equipment from the UK for use in Australia’s SSN-AUKUS programs.

It's another milestone in the work of the Australian government to turn AUKUS from an agreement into action. AUKUS is a nation-building project that will create 20,000 direct jobs with thousands of those in South Australia.

And I’d like to acknowledge the rock solid support and partnership of the South Australian government and the work that they have done with us to deliver Australia’s conventionally armed but nuclear-powered submarines. The cooperation between the commonwealth government and the South Australian government is the best in the country and is an example around the country of how state and federal governments can work together to win jobs, create work for South Australians and help make Australia a safer place.

I’ll hand over to the Premier to make some remarks.

PETER MALINAUSKAS: Well, thanks very much, Pat. Let there be no doubt that this is a good week and a very good day for AUKUS in South Australia. This $260 million-plus contribution from the federal government is all about making sure that South Australian businesses, that South Australian workers and make sure they participate in the program and the AUKUS opportunities.

First and foremost AUKUS is about our nation’s capability and our ability to be able to protect ourselves from potential adversity. But on the back of that is also an opportunity to have the biggest improvement in our economic and industrial complexity than has ever occurred since federation, which boils down to a better standard of living and more prosperity for South Australian families.

This $260 million commitment from the Albanese Labor government will ensure that South Australian businesses that already employ people in our state, can’t just contribute to the submarines being built here in South Australia but also globally amongst our AUKUS partners. And on the back of a positive soundings and positive remarks we’ve seen out of the new Trump administration, I think we can all be confident that there is a bright future ahead for the AUKUS program here in South Australia.

We have seen so much advancement over the course of the last couple of years in the AUKUS program because of the partnership with the South Australian government and the Albanese federal government. And of course we look forward to a big year ahead in 2025. We [indistinct] $260 million commitment today, but everyone is working hard [indistinct] academy [indistinct] you name it, there is so much work now going on behind the scenes to take the program and translate it into [indistinct], from a vision to an absolutely [indistinct] and that’s now starting to play [indistinct].

I personally want to thank Pat for his steadfast stewardship. I don’t think anyone could overstate the complexity of the task here. But this government is utterly committed. And now we’re starting to see the dollars flow. When everyone’s – when anyone ever says it’s not about the money, you can guarantee it’s about the money. So today what we see here today is a $260 million to be rolled out the course of the next two years that South Australian businesses and workers will be the beneficiaries of. That means a lot. And I think we’ll start to see the momentum building around this [indistinct]. I can’t thank Pat, Minister Marles and the Prime Minister enough for their work [indistinct].

JOURNALIST: You don’t have any misgivings about what a Trump presidency might mean for the future of AUKUS, if there would be any changes [indistinct]?

MINISTER CONROY: Well, I refer you to the comments from now Secretary of State Rubio who in his confirmation hearings said that AUKUS is the model he’d like to see replicated. The Trump administration have been very positive about AUKUS. That included in the first telephone conversation between President Trump and Prime Minister Albanese. I was in Washington for the historic vote on the AUKUS legislation at the end of 2023. That passed the US Senate with an 80 per cent yes vote in a Senate evenly divided between Republicans and Democrats.

So AUKUS will continue at full speed. It’s survived changes of government in two of the three countries already with the United Kingdom and Australia, and I’m sure it will continue even stronger into the future.

JOURNALIST: President Trump has already indicated that he’d like to see the alliance partners contribute more. Is there a possibility that he will seek to see Australia put more money in and the United States contribute less in AUKUS in the future?

MINISTER CONROY: Those remarks of President Trump were referring to a debate within NATO about the level of funding. And the goal that President Trump was articulating was to spend 2 per cent of GDP on defence. This government under Prime Minister Albanese is spending 2 per cent of GDP on defence. That will rise to over 2.3 per cent over the next 10 years. And the only way that that goes backwards is if Peter Dutton gets elected because he promises to cut defence spending by $50 billion. So I’m very confident that our relationship with the United States is rock solid.

JOURNALIST: Donald Trump likes to drive a hard deal [indistinct]. Are you confident that he won’t seek to revisit the terms?

MINISTER CONROY: AUKUS is in the strategic interests of all three countries. No one is engaged in AUKUS out of charity. It’s about, as the Premier said, making Australia, the United States and the United Kingdom safer and more secure for their population by expanding the industrial base of all three countries. I’m confident that will continue to be recognised under President Trump.

JOURNALIST: [indistinct] similarly whether you have any reservations about what a Trump presidency might mean for [indistinct]?

PETER MALINAUSKAS: Look, I think, firstly, [indistinct] the remarks on the Trump administration I’ve already made. And remarks from the Secretary of State are seemingly positive regarding AUKUS. What we’ve seen out of the US is nothing but total bipartisanship around the AUKUS program. And I think [indistinct] putting our minds [indistinct] that bipartisanship translates to good progress on the ground. Today is more evidence of that. But as Pat said, I mean, AUKUS is now sustained change of government in both countries. What we now need to do is get on with the job. And remarks from the Trump administration have already been really well received [indistinct].

JOURNALIST: This new money it’s said to support 125 businesses Australia wide. Do we have any idea how many businesses in South Australia, would be [indistinct]?

PETER MALINAUSKAS: Well, I’ve got [indistinct] overwhelming majority of them [indistinct] over 100 [indistinct]. Now, look, I’ve said this a couple of times but I think it’s worth repeating: AUKUS is bigger than South Australia. I mean, we are going to have more work move here in South Australia of the back of AUKUS than will be possible [indistinct]. This actually requires a national effort. AUKUS demands of Australian suppliers that we calibrate our thinking away from, you know, interstate rivalries and more towards the national [indistinct] and national effort. We only achieve AUKUS as a country when everyone is all in. And my state and this government is all in on AUKUS. I’m particularly [indistinct] to our own industrial uplift programs, to what we’ve been doing amongst the university [indistinct], all orientated to us maximising our capability here in South Australia. But even when we do that, that is not enough for us to get AUKUS done. That’s how much work is available.

It is absolutely critical that of the 125 [indistinct] South Australia will have a disproportionately large share. I look forward to other states and other businesses from around the country [indistinct] because that would bring us one step closer to realising the national vision of AUKUS. We cannot think about AUKUS in the context of state boundaries. This is a truly national agreement. My government is doing everything it can to maximise the opportunities here. I [indistinct] see that replicated around the nation.

JOURNALIST: [indistinct] South Australia being known as the home of AUKUS.

PETER MALINAUSKAS: We are the home of AUKUS. [indistinct] submarines here. We are the home of AUKUS. We have a disproportionately larger share of the work. But we want to make sure that other states contribute as well because that gives the program the best chance of success for future generations. This is a future generation program. It transcends politics. It transcends state boundaries. It’s about our national capability. [indistinct].

JOURNALIST: In an era of [indistinct] context, the money was going towards these businesses, what sort of things can the taxpayer expect out of it?

PETER MALINAUSKAS: More jobs of a higher skill, more secure and associated with that, work that we can be proud of.     

JOURNALIST: The detail [indistinct] talking about parts of submarines or talking about [indistinct]?

PETER MALINAUSKAS: I’ll let Pat speak to that.

MINISTER CONROY: So, the three different program that [indistinct] going to, as I alluded to, one is the defence industry vendor qualification program. This is about qualifying Australian companies to work in the nuclear supply chain. This is the most advanced industrial work in the world. Safety and accuracy are paramount, and that’s why we’re investing to qualify Australian companies to do this work. And as I said, AML3D, a South Australian company, has already gone through the earlier phase of [indistinct], and they’re now working with the US maritime industrial base to do [indistinct] valves that will go into the US Virginia class submarines.

Now think about that for a second – valves produced in South Australia going into Virginia class submarines built in the United States will be equipping the US Navy. That is a huge opportunity there. The second part is the global supply chain program where we’ll fund large multinational companies in the US and UK to scour their supply chain looking for opportunities for Aussie companies. There’s some great Australian companies out there that are incredibly innovative and a disproportionate number of them come from South Australia, as the Premier said. So, this is about them winning opportunities in that work overseas in the United Kingdom and the United States.

And the third is in the industry grants program. And this is about funding grants for capital equipment, big machinery and paying for skilled workers around the country, including in Adelaide to get the latest equipment and the latest training so they can produce this. And the Premier is absolutely right – you can expect a vastly disproportionate amount of this funding to go to South Australia because you are at the heart of the Australian defence industry. Over 20,000 direct jobs associated with AUKUS, up to nine and a half thousand of those will be in two activities alone: building the submarine yards here and building the submarines here as well. So South Australia is in the driver’s seat, and that is partly down to the leadership of the South Australian government and their commitment to cooperate with us.

JOURNALIST: Out of interest, how often have we seen domestic military parts being put into navy [indistinct] overseas? Is this a rare occasion?

MINISTER CONROY: It is very rare. The US nuclear industry is the crown jewel of the United States defence complex. So for them to open it up to Australian industry is unprecedented. They’ve only opened it up to us and the United Kingdom as far as I’m aware. And that means huge opportunities for Australian companies to supply [indistinct], and that helps the United States. They’ve got supply chains constraints of their own. But having parts made in Adelaide going into submarines built in Connecticut makes their submarines be built faster, which means we get our submarines faster as well.

JOURNALIST: How much [indistinct]?

MARK BUTLER: Well, it’s important to say first of all that the nuclear waste that will be produced once the AUKUS submarines are in construction – which is well into the 2030s – will be materially no different to nuclear waste being produced up Court Road at the Queen Elizabeth Hospital and a little further up the Court Road at Royal Adelaide Hospital, for example, [indistinct] nuclear medicine, which saves the lives of Australians with cancer each and every day. There are currently more than a hundred facilities around Australia that are licensed to handle this level of waste. The AUKUS program will mean that there will be two more – one over in Perth at Sterling base for the Virginia class submarines to start rotation relatively soon, and then in time also here at Osborne when we start the construction of [indistinct]. So our community can be very confident. We’re very experienced at handling this level of waste. We’ve been doing it for many years in about a hundred nuclear medicine facilities around the country, including just up the road at Queen Elizabeth Hospital.

In time Defence will, according to legislation that the Australian parliament has passed, undertake a community consultation process. That will be done in a time frame that reflects the fact that this is only going to become a reality in this community into to 2030s. I’ve already conducted that community consultation process over in Western Australia because the rotation of the Virginia class submarines there is going to happen before the construction process happens in Osborne.

But, again, I stress this is PPE, this is gowns, masks, gloves, in some cases lights that will be used on the submarines in the construction and the location process that is materially no different to the same PPE that is used in nuclear medicine facilities in hospitals and research institutes and universities around the country. We’re very experienced at handling it, but there will be time for a community consultation process to outline that in more detail.

JOURNALIST: [indistinct] on AUKUS, you talked about the supply chain in the US [indistinct]. Are we confident that the money allocated to South Australia in this instance has the right amount of manpower and supply to fund [indistinct]?

PETER MALINAUSKAS: South Australia [indistinct]. [indistinct] undoubtedly [indistinct] make sure that we are procuring young men and women to participate in this program. [indistinct]. That’s exactly why we have partnered with the Albanese government so closely on a whole range of different programs [indistinct]. [indistinct] more and more young people who chose to participate in this industry. [indistinct] what we’re doing around the amalgamation, what we’re doing with [indistinct] fee-free TAFE. This all adds up to serious [indistinct] to make sure that young people have the choice or not to participate in this really strong, healthy, secure industry. But there’s always more work that needs to be done. And the big one [indistinct] close to working with the federal government on is around the training of [indistinct]. But we have every reason to be confident. And the reason why I say that is because we know that when the policy [indistinct], capability [indistinct] step up to the plate [indistinct] invested in is there. And you only have to see what they’ve achieved in a whole range of different programs. We have consistent and sustained policy effort with the investment [indistinct]. [indistinct] starting to unfold in South Australia.

JOURNALIST: [indistinct] response to the [indistinct]?

PETER MALINAUSKAS: [indistinct] only a few [indistinct] participating national cabinet [indistinct]. [indistinct] national challenge. [indistinct] other parts of the country. And I think it remains to be seen the importance [indistinct] a lot of South Australia [indistinct]. It’s half the battle. [indistinct] majority of Australians [indistinct]. So I think the Prime Minister has shown strong leadership [indistinct] both sides of politics should demonstrate the type of leadership [indistinct].

JOURNALIST: [indistinct] national cabinet [indistinct]?

PETER MALINAUSKAS: Well, I think - national cabinet is one of the most pre-emptive decision-making bodies in the countries. I think it’s [indistinct] to not add [indistinct] demand response. And what we’ve seen is the sort of leadership [indistinct] expect from the Prime Minister. Not just some leaders [indistinct], but leaders from both sides of [indistinct] state and territory level, and make sure there’s a consolidated national response. I welcome it [indistinct].

JOURNALIST: Can I ask you [indistinct] cost of living pressures on [indistinct] families, a mere 50 per cent [indistinct] in the cost of parking at Adelaide Oval. Is that an appropriate cost of living increase?

PETER MALINAUSKAS: Well under the leadership of the Treasurer, under Treasurer Mullighan’s leadership, [indistinct] worked hard to make sure that these charges are only going up in a modest way. [indistinct]. [indistinct] stadium management [indistinct] 50 per cent [indistinct].

JOURNALIST: Do you think that they should reverse that [indistinct]?

PETER MALINAUSKAS: I don’t think [indistinct]. I mean, as a state government we’ve done our bit, [indistinct]. We’ve subsidised to make public transport free to and from the [indistinct] and the Oval. And then they turn around and [indistinct]. I don’t think [indistinct].

SPEAKER: Thanks, everyone.

ENDS

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