Australia — Minister for Defence and Minister for Defence Materiel on Future Submarines Project

TRANSCRIPT: PRESS CONFERENCE BY MINISTER FOR DEFENCE STEPHEN SMITH AND MINISTER FOR DEFENCE MATERIEL JASON CLARE AT THE DEFENCE AND INDUSTRY CONFERENCE TRANSCRIPTION: PROOF COPY E & OE
STEPHEN SMITH: Well, thanks very much for turn­ing up. I’m here with Jason Clare, the Min­is­ter for Defence Materiel, and I must say how pleased I am to be back in Ade­laide — back in South Aus­tralia.

It’s my third vis­it this year as Min­is­ter for Defence; my first vis­it in Jan­u­ary when I came with the Unit­ed King­dom Sec­re­tary of State for Defence to show him some of the facil­i­ties at ASC, but also to tour the defence, sci­ence, tech­no­log­i­cal organ­i­sa­tion DSTO. And that under­pinned the impor­tance of South Aus­tralia and the South Aus­tralian Defence Indus­try to our defence and nation­al secu­ri­ty effort.

More recent­ly in May I was here with the Pre­mier and also with Min­is­ter for Min­er­als and Resources Mar­tin Fer­gu­son with the announce­ment to allow much greater access to [indis­tinct] Woomera pro­hib­it­ed areas. This will be a very sub­stan­tial boost to South Australia’s min­er­als and resources indus­try while at the same time, allow­ing defence to pur­sue its all impor­tant nation­al secu­ri­ty task of testing.

Today of course, I’m here with Jason for the Defence and Indus­try Con­fer­ence. This is an impor­tant part of the defence indus­try cal­en­dar. Again, the fact that it’s in Ade­laide under­lines the seri­ous­ness that South Aus­tralia and the South Aus­tralian Gov­ern­ment, through Mike Rann take, so far as defence and defence indus­try is concerned.

We, for exam­ple, on an annu­al basis spend some $2 bil­lion in South Aus­tralia. There are some 4000 defence per­son­nel in South Aus­tralia. The Air War­fare Destroy­er Project, for exam­ple, which is an $8 bil­lion project, some $2 bil­lion of that will come to South Aus­tralia with any­where from 800 addi­tion­al jobs, and 1000 direct jobs as a con­se­quence. And of course, here we see the main­te­nance of the Collins class sub­ma­rine. And as I indi­cat­ed last night at the Defence South Aus­tralia din­ner, the Gov­ern­ment has com­mit­ted itself to the Future Sub­marines Project; to the con­struc­tion of 12 new sub­marines. And we have com­mit­ted our­selves to see­ing those sub­marines assem­bled in South Australia.

So the work we already do in South Aus­tralia, the work for the future augers well for South Aus­tralia and the defence indus­try in South Aus­tralia. And in that, we work very close­ly with Pre­mier Rann and his government.

Today I’ve announced some fur­ther reforms. I’ve made the point to the con­fer­ence that to dis­charge our nation­al secu­ri­ty oblig­a­tion, it’s imper­a­tive that defence and indus­try work hand in glove; work very close­ly together.

And in the course of this year, I’ve announced a series of reforms. Reforms to pro­cure­ment, reforms to acqui­si­tion, and today I’ve announced fur­ther reforms for the so called projects of con­cern list.

This is part of the drum beat roll of a reform pro­gram, and in future weeks and months you’ll also see the Government’s response to the Riz­zo Report on our Navy amphibi­ous dif­fi­cul­ties, and also the so called Black Review on account­abil­i­ty; both per­son­al and indi­vid­ual account­abil­i­ty. I’ll throw to Jason for a few remarks from Jason. He’s also made some announce­ments yes­ter­day and today in the course of the con­fer­ence, and then we’re hap­py to respond to your questions.

Jason?

JASON CLARE: Well, thanks Stephen. It’s great to be here in South Aus­tralia. South Aus­tralia is right­ly known as the defence state, and that’s a trib­ute to the great work of Pre­mier Mike Rann. 

South Aus­tralia is crit­i­cal to our nation­al secu­ri­ty. It’s the home of more than a quar­ter of the defence indus­try. It’s the home of thou­sands of defence jobs. That includes the work we’re doing to build the new Air War­fare Destroy­ers. It also includes the work we do main­tain­ing our cur­rent sub­marines, as well as the work that we will do with the next gen­er­a­tion of submarines.

This is a very impor­tant con­fer­ence here today. The men and women here today are respon­si­ble for mak­ing sure that our sol­diers — that our troops have the equip­ment they need when they need it. And they do a very good job of that.

But we’ve got a big task ahead. Over the course of the next 15 years, we’re going to replace or upgrade about 85 per cent of our defence equip­ment. That’s an enor­mous task, and to do that we need to reform and improve the way we do things. 

We need to improve the way that we acquire defence equip­ment. We need to improve the way that we main­tain it. We also need to improve the way that we dis­pose of defence equip­ment. That’s the focus of the remarks that we’ve been mak­ing today, as Min­is­ter Smith has said, we’ve made a num­ber of announce­ments already about improv­ing defence pro­cure­ment and sus­tain­ment, and there’ll be a lot more to come.

STEPHEN SMITH: Thanks Jason.

Right. Any questions?

QUESTION: You talk about the new sub­ma­rine con­tract as if it’s already signed, sealed and deliv­ered. Is that the case? How sol­id is [indis­tinct]?

STEPHEN SMITH: Well we have com­mit­ted our­selves, both in the run-up to the last elec­tion and sub­se­quent­ly to what’s called the Future Sub­marines Project. That is 12 new submarines.

It’s a long lead time project. The sub­marines com­ing on stream in the 2030s, the 2040s and the 2050s. And as I have made clear in recent days, oth­er than con­firm­ing two things; first­ly, that the sub­marines will be assem­bled in South Aus­tralia, and sec­ond­ly, con­firm­ing that the sub­marines will be con­ven­tion­al­ly pow­ered and not nuclear pow­ered, all options are on the table.

One of the themes of my speech was pre­ven­tion, not post-mortem. One of the themes of my speech was if you work very hard in the ear­ly days to get projects right, you avoid, reduce, min­imise project dif­fi­cul­ties down the track.

So for what will be larg­er sin­gle defence capa­bil­i­ty project that the Com­mon­wealth of Aus­tralia has seen, indeed, pos­si­bly the largest cap­i­tal works pro­gram or project the Com­mon­wealth has ever seen requires very care­ful atten­tion in its ear­ly stages, and that’s what we’re doing.

But we have com­mit­ted our­selves to the 12 Future Sub­ma­rine Project, and we’ve com­mit­ted our­selves to assem­bling them in South Australia.

QUESTION: When con­sid­er­ing whether to do a mil­i­tary off-the-shelf solu­tion, or to build the subs, design a few of the subs here, will you con­sid­er the flow-on effect to indus­try and the capa­bil­i­ty of industry?

STEPHEN SMITH: Well the issue or the ques­tion of off-the-shelf or local capa­bil­i­ty devel­op­ment applies through­out our pro­cure­ment, and our acqui­si­tion and our capa­bil­i­ty. And as it has been in the past, it will be in the future. It will be a combination. 

The most impor­tant objec­tive so far as I’m con­cerned is that we get the projects right. We get the capa­bil­i­ty that we want, we get it on time and we get it on bud­get with val­ue for mon­ey. That’s always seen a com­bi­na­tion of off the shelf capa­bil­i­ty as well as local devel­op­ment. And as I say so far as sub­marines are con­cerned, oth­er than con­firm­ing that it’ll be con­ven­tion­al­ly pow­ered, not nuclear pow­ered, oth­er than con­firm­ing they’ll be assem­bled in South Aus­tralia, all options are on the table, and over the course of this year and next year, we will refine and announce the details of that project.

QUESTION: Min­is­ter, you spoke of addi­tion­al reforms before. Can you detail what some of those reforms are? And that, I guess you’re putting indus­try on notice to real­ly lift its game?

STEPHEN SMITH: Well, we are both putting defence on notice and indus­try on notice. We have seen in the past too many exam­ples of where projects have not deliv­ered the capa­bil­i­ty that was orig­i­nal­ly envis­aged, where projects have bad­ly slipped in terms of time, and where projects have bad­ly slipped in terms of cost. 

We have insti­tut­ed a range of reforms both in the peri­od that Jason and I have been min­is­ters, but also in the three years pre­ced­ing that. And as I indi­cat­ed to the con­fer­ence, the so-called Kin­naird and Mor­timer reforms, which apply much greater rigour to projects, have seen, the ear­ly indi­ca­tions are, a 20–25 per cent improve­ment, so far as slip­page on delays are con­cerned. So we’re doing bet­ter with the projects, sub­ject to the rigour we have imposed, than in pre­vi­ous projects.

We’re also rein­forc­ing that rigour with announce­ments that Jason and I have made in May, par­tic­u­lar­ly on the ear­ly warn­ing indi­ca­tor front, par­tic­u­lar­ly on the com­pre­hen­sive or gate reviews. And today, we’ve announced mea­sures to refine and enhance the Projects of Con­cern list. Where projects are very seri­ous­ly in trou­ble, they go onto the Projects of Con­cern list. But as I said to the con­fer­ence, the objec­tive is not to put projects on the Projects of Con­cern list. The objec­tive is to get suc­cess­ful projects.

So Jason has been work­ing very close­ly with indus­try [indis­tinct] that process. And our expec­ta­tion is that we’ll see into the future, projects cur­rent­ly on the list come off in a more order­ly fash­ion and, hope­ful­ly, because of our ear­ly warn­ing and ear­ly pre­ven­tion mech­a­nisms, we’ll see few­er projects go onto the list. The list has been there since 2008. And we believe it’s been effec­tive. We also believe it can be more effective.

In terms of future reform, I made it clear to the con­fer­ence that we con­tin­ue to have chal­lenges. We’ve got very real chal­lenges in the Navy amphibi­ous fleet. In the near future, I’ll release Mr Rizzo’s report and the Government’s response to that. We also have the Black Review on account­abil­i­ty. And in the near future, I’ll release the Government’s response to the Black Review.

I made the point before that [indis­tinct] prob­a­bly the case that the sin­gle most impor­tant thing we can do in Defence to improve out­comes is to improve the per­son­al and insti­tu­tion­al account­abil­i­ty, and you will see that in the course of this year, as we con­tin­ue to pur­sue our reform program.

QUESTION: The ASC is on the Projects of Con­cerns list. Does this — and its capa­bil­i­ty has come into ques­tion. Does this bode bad­ly on its bid to — for the replace­ment sub­ma­rine [indis­tinct]?

STEPHEN SMITH: Well, we have made the point today that if com­pa­nies have a project which is on the list, we will take into account the effort and the work they’re doing on reme­di­a­tion, when it comes to oth­er ten­ders or oth­er appli­ca­tions they may be pursuing.

On Collins class sus­tain­ment and main­te­nance, we have known for some con­sid­er­able peri­od of time that this has been a chal­lenge. It is a con­sid­er­able chal­lenge. It is a chal­lenge for the Gov­ern­ment, it is a chal­lenge for Defence, it is a chal­lenge for Navy, it is a chal­lenge for the ASC. So we have an ongo­ing very big chal­lenge, very large chal­lenge with sus­tain­ment of the Collins class sub­marines. That’s not novel.

QUESTION: Are you sat­is­fied the efforts the ASC has made in order to address the prob­lems with the Collins class subs?

STEPHEN SMITH: Well, I am sat­is­fied with the coop­er­a­tion that we’re receiv­ing from ASC with Navy, with the Defence Materiel Organ­i­sa­tion, with Defence and the Gov­er­nor-Gen­er­al. But this is a big chal­lenge and I believe we can, and will, do better.

QUESTION: Well, what do you think needs to be done to have it off the list of Projects of Concern?

STEPHEN SMITH: Well, so far as sub­marines are con­cerned, I am not — I don’t have any aspi­ra­tions that sub­ma­rine main­te­nance or sus­tain­ment will be off the Projects of Con­cern list in any short peri­od. This remains one of our most sub­stan­tial chal­lenges and we need to con­tin­ue to apply our­selves dili­gent­ly, with ASC and oth­er inter­est­ed par­ties, and we will con­tin­ue to do that.

QUESTION: Are there any oth­er projects on your list of con­cerns in South Australia?

STEPHEN SMITH: Well, there are cur­rent­ly nine on the list. We took two off today. From mem­o­ry, the sub­marines is the one which has most focus in South Australia.

QUESTION: You’ve had some ini­tial prob­lems with the Air War­fare Destroy­ers, requir­ing work to be re-allo­cat­ed from BAE. Are you con­fi­dent that the AWD project [indis­tinct]…

STEPHEN SMITH: Well, I — you’re quite right. I announced mea­sures in the last few weeks to re-allo­cate the build­ing of some blocks from BAE’s Mel­bourne work­shops to the oth­er ship­yards, both in South Aus­tralia and also in New­cas­tle, and a small num­ber of blocks to Navan­tia in Spain. We will in the future make a judg­ment about the allo­ca­tion of blocks for the third Air War­fare Destroy­er. Those changes have reduced the slip­page and delay in the project by 12 months, by half. But we con­tin­ue to very assid­u­ous­ly apply our­selves. Both Jason and I and Defence and Navy and the Defence Materiel Organ­i­sa­tion very assid­u­ous­ly apply our­selves to what is a most impor­tant project, not just for South Aus­tralia, but for the nation.

QUESTION: Just on anoth­er top­ic, what’s your reac­tion to these lat­est ter­ror­ist attacks in Kab­ul, with, you know, obvi­ous­ly sui­cide bombers [indis­tinct]…

STEPHEN SMITH: Well, it’s the ear­ly hours of Kab­ul, so the cir­cum­stances will become clear­er over the next few hours, but I am in a posi­tion to indi­cate [indis­tinct] First­ly, I can con­firm that no Aus­tralian diplo­mats or diplo­mat­ic staff in Kab­ul have been caught up in this attack. The advice I have [indis­tinct] also applies to ADF per­son­nel. I am also advised that — the advice at this stage is that no Aus­tralians have been caught up in the attack upon the hotel [indis­tinct] Inter­con­ti­nen­tal. No Aus­tralians were reg­is­tered as stay­ing at the hotel. So sub­ject to fur­ther con­fir­ma­tion, as Kab­ul wakes up in the ear­ly hours of the morn­ing into day­light, we will con­firm those, but that is the advice I have. And I am also advised that we are deal­ing here with half a dozen or so insur­gents or ter­ror­ists. The Tal­iban, as you would expect, have claimed respon­si­bil­i­ty. And the advice from the Afghan Inte­ri­or Min­istry Spokesman — Min­is­ter Sid­diqi — is that a large num­ber of the ter­ror­ists, if not all of the ter­ror­ists, have been killed [indis­tinct] but because it’s the ear­ly hours of [indis­tinct] because this has effec­tive­ly come to us overnight, we’ll need to con­firm those in the course of the day.

More gen­er­al­ly, I’ve made the point in the past that in the course of this sum­mer fight­ing sea­son in Afghanistan, giv­en that the Tal­iban now find them­selves under pres­sure, they would do two things. They would seek to recov­er ground, not just in Uruz­gan province, but else­where, but also utilise high pro­file, pro­pa­gan­da-type attacks, and this is one of those. This is aimed at seek­ing to under­mine polit­i­cal will in the Unit­ed States, in Europe and in Aus­tralia and we have seen a series of com­pa­ra­ble attacks in recent times. QUESTION: An audit into the war­ships has been try­ing to iden­ti­fy the prob­lems there and it has come out with quite a list of prob­lems, includ­ing short­ages. Do your reforms — will they go to address­ing some of those problems?

STEPHEN SMITH: Well, in my remarks at the con­fer­ence, I made the point that the Audit Office report into Navy capa­bil­i­ty in very many respects cov­ers ter­ri­to­ry or turf that Mr Rizzo’s report will deal with. Whilst it is the case that Defence have made [indis­tinct] own con­tri­bu­tion to that Audit Office report and accept­ed a range of the rec­om­men­da­tions and find­ings, from my per­spec­tive, I’ll deal with the Audit Office report at the same time as I deal with the Riz­zo Report. The Riz­zo Report cov­ers com­pa­ra­ble ter­ri­to­ry and as I’ve made [indis­tinct] the ear­ly advice from Mr Riz­zo is that we’re deal­ing here with long term sys­temic dif­fi­cul­ties and any prob­lem which has emerged over the long term, with a fail­ure to apply appro­pri­ate resources, a fail­ure to have appro­pri­ate tech­ni­cal capa­bil­i­ty, will require some time to recov­er from. But I’ll deal with those issues at the same time as I deal with Government’s response to the Riz­zo Report.

QUESTION: You talked about reduc­ing the growth in the pub­lic ser­vice sec­tor to increase sav­ings. Does that mean there will be job cuts?

STEPHEN SMITH: Well, I announced in the run-up to the bud­get in May that as a result of fur­ther reform we’re doing to the Defence’s bud­get process­es, fur­ther reform to so-called Shared Ser­vices under the Strate­gic Reform Pro­gram, that we’ve been able to effec­tive­ly reduce the num­ber of civil­ian per­son­nel by 1,000. I’ve pre­vi­ous­ly announced that there will be no impact on mil­i­tary per­son­nel and no impact on key areas, Navy main­te­nance one, our oper­a­tion cen­tres, the Joint Oper­a­tion Cen­tre in Bun­gen­dore and no adverse impli­ca­tions for the Defence Capa­bil­i­ty Group.

So I’ve pre­vi­ous­ly announced that as part of the ongo­ing Strate­gic Reform Program.

QUESTION: Min­is­ter, ASC is fund­ing design work for the future subs itself. Is that some­thing Defence will look at pro­vid­ing fund­ing for?

STEPHEN SMITH: Well, in any large project, there are indus­try rep­re­sen­ta­tives or indus­try play­ers who will present gov­ern­ment with their sug­ges­tions. At some stage in the future, Defence will, in accor­dance with the usu­al process­es, go out with seek­ing expres­sions of inter­est. ASC and oth­er par­ties have indi­cat­ed their inter­est in the future sub­ma­rine project into the future. That’s just the nor­mal course of events, nor­mal activity. 

Press release
Min­is­te­r­i­al Sup­port and Pub­lic Affairs,
Depart­ment of Defence,
Can­ber­ra, Australia 

Face­book and/or on Twit­ter

Team GlobDef

Seit 2001 ist GlobalDefence.net im Internet unterwegs, um mit eigenen Analysen, interessanten Kooperationen und umfassenden Informationen für einen spannenden Überblick der Weltlage zu sorgen. GlobalDefence.net war dabei die erste deutschsprachige Internetseite, die mit dem Schwerpunkt Sicherheitspolitik außerhalb von Hochschulen oder Instituten aufgetreten ist.

Alle Beiträge ansehen von Team GlobDef →