Referral to the committee
1.1
On 19 September 2019, the Senate referred an inquiry into Australia's sovereign naval shipbuilding capability to the committee for inquiry and report by 25 June 2020. On 24 February 2020, the Senate granted the committee an extension to report by 3 December 2020.
1.2
On 12 November 2020, the committee agreed to again extend the inquiry until 30 June 2021. This has been subsequently extended to 2 December 2021.
1.3
The Terms of Reference for the inquiry are:
That the following matter be referred to the Economics References Committee for inquiry and report by the last sitting day in June 2020:
Developing and delivering Australia’s sovereign naval shipbuilding capability, with particular reference to:
(a)
oversight and scrutiny of the national shipbuilding plan, to support a continuous build of vessels in Australia;
(b)
progress of the design, management and implementation of naval shipbuilding and submarine defence procurement projects in Australia;
(c)
progress of the Naval Shipbuilding College in building workforce capability, and developing the required skills and infrastructure to design, build, maintain, sustain and upgrade current and future naval fleet;
(d)
ongoing examination of contracts and scrutiny of expenditure;
(e)
the implementation of Australian Industry Capability Plans;
(f)
the utilisation of local content and supply chains;
(g)
the transfer of intellectual property and skills to Australian firms and workers;
(h)
the prospect of imminent job losses and redundancies;
(i)
opportunities and multiplier effects to local jobs and the economy; and
Conduct of the inquiry
1.4
Details of the inquiry were placed on the committee's website. The committee also contacted a number of relevant individuals and organisations to notify them of the inquiry and invite submissions. All submissions received are listed at Appendix 1.
1.5
As at the date of tabling, the committee has received a total of 36 submissions and has conducted four public hearings in Canberra:
1.6
Participants at those public hearings are listed at Appendix 2.
1.7
References to Hansard in footnotes and other places refer to the Proof versions and may be different to the final Official versions.
This Interim Report
1.8
With the extended reporting date, the committee had been moving towards producing a full report by the end of 2021.
1.9
However, the committee has resolved to produce this Interim Report as it has become increasingly concerned about the status of the Future Submarine Program (FSP) and at the Department of Defence's lack of responsiveness in terms of providing information on that project and others that fall under the scope of this inquiry.
1.10
The report's title, 'Ringing of Bells, Wringing of Hands', is derivative of Sir Robert Walpole's famous quote. But unlike Walpole, the bells the committee are referring to are not that of joy—rather that of alarm. As described by former Prime Minister, Malcolm Turnbull MP, the FSP is the largest and most complex defence acquisition Australia has ever undertaken. Media reports that the Commonwealth government is now considering a 'Plan B'—that is, cancelling the agreement with Naval Group and engaging a new submarine builder is, to the committee, a loudly–ringing alarm bell on the status of this long-term, multi-billion dollar acquisition. Accordingly, the committee feels compelled to share its findings and views with the Australian people through this report.
1.11
At the same time, the committee has also become increasingly frustrated by the Department of Defence's lack of responsiveness to its requests for information. The committee now feels that Defence has impeded its work in examining Australia's sovereign naval shipbuilding program—an inquiry authorised by the Australian Senate. This is not only an affront to the committee but a contempt of the Parliament and, by extension, the Australian people. The committee has now raised a Matter of Privilege through the President of Senate regarding the Department's continued obstructionism.
1.12
This report consists of three chapters: this introductory chapter; a second examining the FSP with the third critically examining Defence accountability and transparency. Although there are only four recommendations, the message of this report is clear—the Commonwealth Government and the Department of Defence must cease obfuscating and inform the Parliament, and thus the Australia people, on the true status of the Future Submarine Project.