Senator the Hon. Simon Birmingham
Minister for Finance
Leader of the Government in the Senate
Senator for South Australia
Date: Friday, 17 September 2021
Narelle Graham: Senator Simon Birmingham is the federal finance minister and Liberal Senator for South Australia. Senator, good afternoon to you.
Simon Birmingham: Good afternoon, Narelle, great to be with you.
Narelle Graham: Senator Birmingham, what will happen with naval group now? It's basically going to shut down, is it?
Simon Birmingham: Well Narelle, Essentially, yes. Look, it's a matter for naval group exactly as how they handle things. We will work through all of the contract termination arrangements on the attack class submarine with them. Naval Group is full of good people who've worked very hard and this is a difficult time for them. But the opportunities that have been created through the various announcements happened yesterday mean that we're able to provide very much a jobs guarantee for skilled workers in the shipbuilding industries. Today, I've announced with ASC the creation of Sovereign Shipbuilding Talent Pool, for which those working in naval group at present will be able to register and have the sort of personal attention to transfer skilled workers across into the many other naval shipbuilding opportunities being created, be they the upgrading of the Collins class submarines to extend their life and their capabilities or the upgrading of our air warfare destroyers that was also announced this week and will also happen in Adelaide in building of the future frigates that's already underway here in Adelaide or, of course, the new nuclear submarine programme.
Narelle Graham: Senator, can I just make sure? Can I just clarify naval group? Their only job was going to be the French designed subs? Is that right? That's that was their core business.
Simon Birmingham: That's right.
Narelle Graham: Okay. Yeah. I just wanted to clarify. I'm just thinking people may be thinking, Well, you know, did they have any other? But this was a company that was created because of those French designed subs. Now, jobs is a concern, and I know you've said there is a demand for skilled workers, but that gap in work opportunities in shipbuilding, that's concerning people. How long is the gap going to be between naval group stops? And then some work coming up with the UK and USA, Australia deal because it's going to be 18 months before that deal is finalised. And I know you've said there are there's more work there. There's work on the Collins class submarines, but how long do you think that Gap's going to be between major projects?
Simon Birmingham: Well, in terms of all of the major projects, it is not really a gap at all with the fact that ASC is scaling up now, having had the certainty that full cycle docking stays in Adelaide, that life of type extension of the Collins class goes ahead. That involves ultimately some 1,300 jobs in Adelaide. The announcement, which will see the air warfare destroyers upgrade occurring, is another 300, ASC themselves said today they have around 150 vacancies that they were looking to fill before these announcements to be able to deliver on the work that they have happening. We know that BAE, Raytheon, Saab, they're all major defence companies in hiring modes as a result of the investments that have been made across our defence industries. And so this process we're putting in place to the naval group workforce is about ensuring that they can move relatively seamlessly, indeed, in most cases of the skilled workforce or even guaranteeing to carry across entitlements and leave and all of those factors to keep it a very simple process.
Narelle Graham: So are you saying, Senator Birmingham, that there won't be anybody out of work for any length of time?
Simon Birmingham: I'm saying that in terms of the designers, the engineers, the ship builders, so the skilled workforce, it's a very clear guarantee in terms of the commitment we've made to help them transition into the other opportunities because there is just so much strong demand there for other parts of the workforce. We will provide as much support as possible because of the hiring that goes with that.
Narelle Graham: Okay, the French deal and I know you've been asked about this a lot was 60 per cent quota of local jobs. What will be the quota in the new deal?
Simon Birmingham: We will have to see in terms of the final design and plan, but there's a couple of important differences in this compared with the French deal. What we've announced with the UK and the US is a government to government agreement. What they've committed to is transferring the skills, the capabilities, the designs for Australia to be able to build the submarines here. They want us to have that capability. So it's not a commercial arrangement with companies at this stage in terms of negotiating how much is built, where this is a government to government agreement that is about our partners and allies actually wanting us to create as much of this capability here as we possibly can.
Narelle Graham: Are you saying therefore we're closer to 100 per cent?
Simon Birmingham: It will be as much as we can realistically achieve as we've emphasised, the nuclear reactor element of the submarine is something that we're not seeking to create a civil nuclear industry in Australia. And so that part will be imported just the same as the further initial Collins class. The main motors were imported from Sweden. That's not an unusual proposition that some key component.
Narelle Graham: So the hulls might be made here but the engines might come in from somewhere else.
Simon Birmingham: Well, that's historically how many of these projects have worked?
Narelle Graham: I'm sorry. I'm sorry, Senator. I know that we've got a lot. There's people who want who want to talk to you. I'm wondering, as you know, I usually present the regional drive show. What opportunities do you see for regional areas in this new deal?
Simon Birmingham: So Narelle, lots of opportunities where obviously depending on where business and suppliers are based. And so, you know, these submarines will be larger than what we were intended to build more technologically complicated than previously thought. So along with all those other parts of the work stream that I spoke about, upgrading the current subs, upgrading the air warfare destroyers, delivery of the Future Frigates programme as well, the work stream that is there will create opportunities for a range of small and medium sized businesses, not just in Adelaide or not just in regional South Australia, but really right across the country. And so we want to do is make sure we work with those defence industries to help those businesses grow.
Narelle Graham: Senator, you have heard our five o'clock news. Is there a great risk here that Australia will be a the target of a nuclear strike?
Simon Birmingham: No, we have been in Adelaide at the Osborne shipyards, producing submarines and naval vessels for decades now. The fact that we are doing so using partnership arrangements with the UK and the US is no different to the fact that we have had UK and US companies involved in fitting weapons systems in building submarines, previous air warfare destroyers. These types of activities have been undergoing at the Osborne shipyards for a long time now, and it should be no surprise to anybody that we want to continue that because it's essential to give our navy the capability we want. But it's also very important for the many thousands of jobs it creates in South Australia, some 5,000 projected to be created by 2030.
Narelle Graham: Senator, thank you. We'll have to leave it there. South Australian Liberal Senator Simon Birmingham.