Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Thursday, 16 September 2021
Journalist: The federal government has committed to keeping the jobs of local South Australians in the shipbuilding sector, is that a 100 percent commitment to the people who have jobs now, they're not going to lose them?
Simon Birmingham: We're giving a very firm commitment to all of those skilled workers across The programme that they are needed. They are wanted and will support them into new jobs and there are so many new job opportunities that are coming through right now, ASC will need to scale up to deliver the life of type extension to the Collins class. We need to see a scaling up to deliver the Hobart class upgrades. There will need to be scaling up to support the engagement of the United States, the United Kingdom around the delivery of the new nuclear powered submarines. So the opportunities are very, very strong. ACS will be undertaking an expression of interest process to make clear the pathways to support workers who are affected. We have already reached out today to BAE, to Saab, to Raytheon companies, all of whom have Demand at present for additional skilled Defence staff. So the opportunities are there, the growth in new job opportunities is coming pretty much immediately and we want to make sure. Those workers in a successful transition, and we will support, that is a firm commitment.
Journalist: What about the jobs that will be lost at the back-end, corporate area, further jobs losses at Naval. What’s your job expectations now for naval shipbuilding now?
Simon Birmingham: Our expectation is to see some 5,000 South Australians employed in the naval shipbuilding industries by 2030, and that's scaling up off the back of investment in the current Collins class in the air warfare destroyers, in investment in the new future frigates the BAE are building who are employing at a great rate of knots to deliver that programme. And of course, the investment that is necessary to help us on this 12 to 18 month journey of developing precise designs and plans to build our nuclear submarines in Australia and then the delivery of those in the years and decades to follow.
Journalist: Have you got an indication of when the build is likely to commence and when it will be completed by?
Simon Birmingham: As the prime minister's indicated, the intention is to see build commence this decade and the first boat in the water next decade.
Journalist: What about the jobs though that will be lost there today?
Simon Birmingham: The important part there is the firm commitment we are giving in terms of supporting skilled workers, be they naval engineers, designers, shipbuilders to be able to transfer across into the range of other programmes that are being established. And we will work carefully, carefully with Naval Group and other partners to ensure that happens successfully.
Journalist: So it's a very firm commitment, but can you guarantee that anyone out there at the moment won't lose their job?
Simon Birmingham: I see I've made it very clear it is a firm commitment and we're going to work through that with each individual worker according to their needs. Starting with the processes that ASC will put in place in terms of expression of interest arrangement. Department of Defence engaging with naval group and other relevant contractors.
Journalist: I'm sorry to interrupt, this new AUKUS alliance does that give local innovators, especially here in South Australia. Any opportunities to start exporting their own ideas to the US and the UK? I'm not sure you're familiar with some of your some of the comments that your colleague David Porter made yesterday, but he said that Australia really needs to boost their local innovation exports and for Australian companies to start being the prime contractors of major defence projects.
Simon Birmingham: The opportunities here are immense in terms of integration across the UK and US systems in place. We already share enormous work in terms of weapons integration and systems integration. We already have the partnership with the UK in terms of delivery of the Future Frigates programme. And this new nuclear powered submarine programme is going to enhance those opportunities, not just for direct employees, but for many small, medium and hopefully in the future large businesses in South Australia to be part of the delivery of these programmes in SA, But to integrate into the supply chains of our most valued and closest allies and partners. So we have great confidence that this will see a real step change in terms of the long term defence relationship, it's going to give us the capability. Most importantly, this is why we do these things to give us the capability, our navy and defence need to best support Australia into the future, but it also in great news for South Australia, it creates So many jobs, so many business opportunities, not just in this state, but ultimately right across the country.
Journalist: I know the design, the design is still being worked through, but what does this mean for? We had a we had a local build percentage built into the contract with Naval Group. Is this going to be a little bit more off the shelf where we'll get parts from the US and parts from the UK, so there'll be less need for a local build here?
Simon Birmingham: So the precise terms in terms of the build composition, all those things will form part of the 12 to 18 month design process working through. The design platform that is best suited to Australia's needs, how are we most efficiently and effectively transfer those build capabilities to Australia in a way that enables us to get the submarines built as quickly as possible, as efficiently as possible? They're the processes we're going to work through. We want to make sure that as much work as can be done effectively and safely as possible happens here in South Australia and happens across Australia and indeed our partners in the UK and the US equally want to ensure that Australia has the capabilities to be able to sustain, to safeguard, to operate these submarines. And so we know we have willing partners in this programme who are intent on supporting us to deliver it successfully and to transfer the skills and capabilities needed to do so.
Journalist: Are jobs vulnerable until those nuclear subs come online, given where dumping the attack class, the Collins class was being replaced, are obviously being extended but will be replaced?
Simon Birmingham: That's why this is a package announced. It shouldn't just be seen as a transit. From the conventionally powered attack class to new nuclear powered submarines. It is also about extending the life of the Collins class with enhanced capabilities, extending the capabilities of our air warfare destroyers by including Tomahawk missiles and other weapon systems right across our Defence Force. This is about responding to the strategic environment we face across our region, positioning Australia with the best technology and the best defence platforms to be able to secure our nation in partnership with our allies to underpin a peaceful region.
Journalist: There was a lot of talk of full-cycle docking going to Western Australia, can you talk about what got South Australia over the line in the end?
Simon Birmingham: Ultimately, it's a question of skills and capabilities and the skills that ask are outstanding. The capability that ASC has shown in delivering Collins class today to be spending more time on operational level out to sea undertaking missions that was paced previously is a testament to the ASC leadership, workforce and the successful cooperation with defence over recent years, and so that success, that capability also alongside the fact that those skills are going to be essential in terms of the transition into building the new nuclear powered submarines in the future. So we want to make sure we have that core critical mass of highly skilled, highly capable workforce and technology underpinning these submarine sustainment and construction in South Australia in the years to come.
Journalist: What will happen to the Infrastructure out at Osborne that now can't or won't be used?
Simon Birmingham: We'll be working through with the contractors in relation to. Infrastructure at Osborne, working through the different steps in terms of which parts suitable for completion. Which parts need to be put into a safe care and maintenance process whilst this programme reassesses specific infrastructure needs required for the future submarines.
Journalist: Can you say that in the future with this contract, once we get through the design process, will there be a local production element written into the contract or do you think that's a thing of the past, given what happened with Naval Group?
Simon Birmingham: I don't want to pre-empt the type of contractual arrangements that will be necessary. What we have today by the presence of President Biden and Prime Minister Johnson alongside Prime Minister Morrison is the clearest possible expression of commitment to work with Australia to make this a success and get it done.
Journalist: Does the Government have a ceiling on how much it's willing to spend.
Simon Birmingham: We have increased Australia's defence expenditure significantly from what had been record lows not seen from period since before World War Two. Under our government to now invest in more than two per cent of Australia's GDP per annum in our Defence Force. We've done this because we know of the importance of a country of Australia's size and scale and location, having a strong defence posture and being able to integrate effectively with our allies. That increased expenditure we are making enables us to make these types of decisions. Prime Minister has been clear there will be increased costs that come with a nuclear powered submarine programme, but that's because we get increased capability and increased influence across. In doing so, that's why we're doing it, precise Cost implications will be worked through as part of design assessment process.
Journalist: Is this a blank cheque or is there a cap on how much Australia is willing to spend?
Simon Birmingham: Our assessments are that we believe that this is Feasible for Australia, but we will need to make sure we have the economic growth in the future to be able to support the costs of delivering a programme like. Australia is the 13th largest economy in the world. We should have confidence as a country in terms of our posture internationally, we should invest in it at all levels, including in relation to our defence posture and what we need to pay for is continued economic growth across this country, underpinned by productivity, by participation and by population.
Journalist: But well above the $90 billion that was going to be spent on the attack class?
Simon Birmingham: These come at additional cost, but these are also realised over years and decades.
Journalist: Inaudible question
Simon Birmingham: President Biden spoke this morning about cooperation between our sailors, our scientists and our industries and that's precisely what we want to enable and hopefully to inspire young generations, the Premier and I are right here about to go and see so young South Australians who are considering their career prospects in the future. And working in high tech industries in our naval, science, technology industries. These are the places where so many of those skilled job opportunities exist. And importantly, it's what then happens in a state like South Australia to leverage off of. Standing here at Lot Fourteen That Steven Marshall has championed so strongly and turned into a reality is a living, breathing example of the fact that having investment in science and tech actually, attracts other skills, other opportunities, Space, defence, Artificial intelligence, all of the opportunities that should inspire, hopefully many young South Australians and young Australians to consider STEM careers in the world of opportunities. Probably need to wrap up in a sec.
Journalist: What do you think Australians can expect in terms of relations in the future, I'm talking about other different undertakings, can you flag anything that may come out of this?
Simon Birmingham: So indeed, the opportunities in terms of working cooperatively on cyber technologies, missile technologies on the range of different Defence platforms, that a true security partnership between these three allied nations is really well underscore ongoing work and the boundaries, in a sense, are limitless in terms of the potential for cooperation between Australia, the UK and the US. That's why we pursued this partnership. And importantly, it's why they have equally welcomed the embrace this partnership with us. Thanks, guys.