Introduction
Coalition Senators note the findings in the Senate Economics References Committee's report on Australia’s sovereign naval shipbuilding capability, but do not agree with material elements of the commentary or the recommendations. In our view, the Majority Report does not provide fair and reasonable recognition of the positive steps taken by the Coalition Government with respect to Australia’s sovereign naval shipbuilding capability.
AUKUS
On 16 September 2021, Prime Minister Scott Morrison, President Joe Biden and Prime Minister Boris Johnson announced an enhanced trilateral security partnership between Australia, the United Kingdom and the United States—AUKUS.
Since 2016 our strategic environment has become more challenging. The Indo-Pacific is now the centre of strategic competition. This has compelled a re-assessment of the capabilities Australia needs to meet the changed threat environment over the long term.
AUKUS is a key part of the response, but it is not a new defence alliance or pact. It is a change in capability, not a change in strategy. ASEAN will remain central to Australia’s engagement in our immediate region. Australia is as committed as ever to our established and valued partnerships, including the Five Eyes.
As a first initiative under AUKUS, the US and UK will support Australia to identify the optimal pathway to deliver nuclear-powered submarines, leveraging the decades of experience the US and the UK have gained through their respective submarine programs.
The Coalition Government has made significant and rapid progress in our trilateral effort with the US and UK to identify the optimal pathway for Australia to acquire a nuclear-powered submarine capability. There are no roadblocks.
AUKUS is more than acquiring a nuclear-powered submarine capability for Australia; it is a framework to enable deeper practical cooperation to develop leading-edge military capabilities and technologies, ensuring Australia remains a responsible and highly capable security partner in the Indo-Pacific.
As outlined in the Joint Leaders’ Statement on AUKUS, initial AUKUS Advanced Capabilities efforts will focus on cyber capabilities, artificial intelligence, quantum technologies and additional undersea capabilities.
Shipbuilding
The Coalition Government’s commitment to continuous naval shipbuilding will support at least 15,000 Australian jobs by the end of the decade.
The Osborne Naval Shipyard in South Australia is one of two principal naval shipyards. Osborne will host the construction of nine Hunter-class frigates, plus major upgrades to the Navy’s three Hobart class destroyers and full-cycle docking of six Collins-class submarines. It is also the government’s intention that Australia’s future fleet of at least eight nuclear-powered submarines will be built at Osborne.
The Australian Marine Complex at Henderson, Western Australia, is the other of Australia’s two principal naval shipbuilding precincts. Henderson will remain a hub for naval shipbuilding and sustainment activities with three classes of naval vessels under construction now, major upgrades being integrated into our Anzac-class frigates and the continuation of Collins-class submarine mid-cycle and intermediate dockings.
In addition, the Coalition Government has delivered on its commitment to provide our servicemen and women the vital equipment they need to keep us safe with Defence spending now above 2 per cent of GDP.
This is in stark contrast to the previous Labor Government which cut or deferred over $18 billion of expenditure from the Defence budget. In fact, under Labor, the Defence budget fell to 1.56 per cent of GDP (2012‒13 Budget). The lowest level since 1938.
Over a period of six years, the previous Labor Government did not commission the build of one naval vessel in an Australian yard.
In our view, the Majority Report fails to provide adequate recognition of this context.
Cost of Attack-class Program
In our view, the Coalition Government (and the Department of Defence) has been transparent with respect to the costs of the Future Submarine Program. Simply there has been no cost blow-out of the Attack-class submarine program. Prior to the government’s 16 September 2021 decision to cancel the program, the total program cost estimate was stable at $50 billion in 2016 dollars. The Department of Defence was clear in their evidence that the cost of the Future Submarine Program was $50 billion constant at the time Naval Group was selected and that remained the cost until its cancellation.
Department of Defence participation at Committee hearings
The Department of Defence appeared at six separate public hearings of the Senate Economic References Committee Inquiry into Australia’s Naval Shipbuilding and answered a total of 173 Questions on Notice from these hearings. This indicates a fulsome engagement with this committee. Again, we do not believe that this is significantly acknowledged in the Majority Report.
Response to the Recommendations
Coalition Senators make the following points as regards to the recommendations:
Recommendation
Coalition Senators are aware that the Coalition Government regularly provides Defence briefings to relevant Opposition members, such as the Shadow Minister of Defence.
Coalition Senators consider that the Coalition Government and Department of Defence are subject to appropriate parliamentary oversight through the Senate estimates process and other parliamentary committees and mechanisms, including Question Time. Hence, we do not see the need for any additional process.
Recommendation
Coalition Senators do not agree with the premise underlying this recommendation. For the reasons outlined above, in our view, the Department of Defence has been consistent with respect to the cost of the Future Submarine Program.
Recommendation
Coalition Senators believe the long-standing practice governing the roles, responsibility and privileges of parliament and its committees should be adhered to by all government departments. Coalition Senators do not agree with the Majority Report that the Department and Executive have been deficient in this regard, particularly considering that the topics under discussion directly address matters of national security. Nor do Coalition Senators agree that any further training is required for Department of Defence employees regarding their democratic responsibilities.
Conclusion
Coalition Senators support the government's commitment to a strong and sustainable shipbuilding pipeline in Australia.
Senator Paul Scarr
Deputy Chair
Liberal Senator for Queensland
Senator Andrew Bragg
Member
Liberal Senator for New South Wales