COVER STORY Defence minister commits to future of naval shipbuilding
by Peter Westmore
News Weekly, May 9, 2015
In a landmark decision, Defence Minister Kevin Andrews has announced that the government is committed to the future of the Australian naval shipbuilding industry.
The industry has been struggling for years, despite having built the last generation of submarines and frigates, because of a lack of regular orders necessary to maintain the workforce, pressures from Treasury to buy cheaper naval vessels overseas, and the Defence Department’s chronic indecision about the future orientation of the Royal Australian Navy.
The Abbott Government is at present preparing a Defence White Paper this year to end this uncertainty. One aspect of this was to consult the RAND Corporation to produce a study of options for the future of naval vessel acquisition and the naval shipyards in Australia.
The RAND Corporation is one of the world’s leading defence think tanks.
In releasing the RAND report, Mr Andrews, said: “In September last year, the Government commissioned RAND to conduct a detailed review of the Australian naval shipbuilding industry. The report is one of the most detailed studies undertaken into the Australian naval shipbuilding industry.
“Following the election of the Coalition Government, it was clear that the former Labor Government had no commitment and no plan for Australia’s naval shipbuilding industry.
“In six years Labor did not commission a single naval vessel from an Australian yard, resulting in the creation of Labor’s ‘valley of death’. Indecision and inattention by the former government have left the Australian naval shipbuilding industry in a precarious and uncertain state.”
Significantly, Mr Andrews added: “This Government is prepared to invest in the skills and knowledge base of the Australian naval shipbuilding industry, and is prepared to commit to a long-term investment to make sure this important industry enjoys a future in Australia and these critical skills are maintained.
“To this end, the naval shipbuilding industry must be prepared to work constructively with the Government.”
He added: “The sustainability and viability of naval shipbuilding in Australia must be predicated on major reform of the industry and significant productivity improvements, as well as improvements to Defence’s acquisition and sustainment processes.”
The desperate state of Australia’s naval shipbuilding industry was a source of total frustration to the former defence minister, David Johnston, particularly over the management of the $8 billion Air Warfare Destroyer program, and the maintenance of the Collins-class submarines.
Senator Johnston described the Australian Submarine Corporation (ASC) management of the destroyer program as “a disgraceful mess”, when reporting it was $600 million over budget.
He told the Senate last November: “You wonder why I am worried about ASC and what they are delivering to the Australian taxpayer. Do you wonder why I wouldn’t trust them to build a canoe?”
Senator Johnston was criticised for his remarks, and later, moved from the defence ministry, and was replaced by Mr Andrews. Others, though, had expressed similar views.
Mr Andrews has shifted away from blaming ASC for the problems in naval shipbuilding, instead focusing on successive governments’ lack of commitment to the maintenance of a viable naval shipbuilding industry.
This reflects the views of the former chief executive and managing director of ASC, Hans Ohff, who gave an important address last March to a conference in Adelaide on Australia’s Future Submarines.
Mr Ohff said: “In its wisdom, or more the lack of it, the Government no longer funds a Naval Design Directorate, and the corporate memory of vast numbers of civilian and government naval engineers is largely lost for ever.
“As to artificers, the RAN no longer schools apprentices. A 38-week basic technical training course will have to do since much of its skill-based requirements are outsourced to the private sector, which now rarely indentures new apprentices itself.
“From the mid-1990s onwards the federal and state governments discontinued their campaigns for local manufacturing.”
Mr Ohff pointed out, however, that maintaining a naval shipbuilding capability was needed to preserve the sovereignty of Australia. He said: “Notwithstanding binding treaties, bilateral agreements and an historical connection with the Anglosphere and NATO, our guarantor, the United States, may not be able or even prepared to rush to our aid at a moment’s notice.
“It is therefore prudent to plan for uncertainty, and to be sufficiently realistic in our planning to include scenarios that require us to be largely, if not wholly, self-sufficient in our ability to maintain, repair, upgrade and, when required, rapidly expand the future submarine fleet.
“Why, I ask, would anyone even contemplate anything other than building and maintaining the RAN’s next generation submarine squadron also in Australia?”
It seems that the government is listening.
Peter Westmore is national president of the National Civic Council.