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Shipbuilding industry crucial for SA: Minister

Jul 30, 2014

Whether or not to continue naval shipbuilding in Australia is probably the biggest manufacturing decision the country has faced since World War II, says state Minister for Defence Industries Martin Hamilton-Smith.

“Now I think there’s only one answer to that question: we must go ahead,” he said this morning.

“We must build a naval ship-building industry here.

“If a new management team, be it BAE or anyone else, is needed to be put in there, let’s get on with it. Let’s do it.”

Prime Minister Tony Abbott has demanded urgent action to address the significant delays and cost overruns hampering the country’s major naval shipbuilding projects, with reports today that the Federal Government is set to sack its own naval shipbuilder, Adelaide-based ASC, and install British defence giant BAE Industries to rescue the $8.5 billion construction of three air warfare destroyers.

The Australian reported that the ASC would be limited to maintaining the Collins Class submarines rather than building new warships.

Federal Defence Minister David Johnston also said yesterday that the government would not be tied to defence spending commitments, including a pre-election pledge to build a new fleet of submarines in Adelaide.

Hamilton-Smith acknowledged there had been “teething problems” with both the Collins Class submarines and the air warfare destroyer program, and called on the Federal Government to act swiftly to implement the recommendations of the White/Winter report.

“We must deliver the 12 submarines as promised, to be assembled, based in Adelaide,” he said.

“There can be no consideration of an option of building a submarine completely overseas. That would be selling Australian jobs.”

He said that in many ways, it was a “bigger and more important decision” than those regarding the automotive industry.

“With the Olympic dam expansion not proceeding, with the automotive industry closing down around us, if this industry is sold off overseas, the implications for South Australian families for the next 30 years could be catastrophic.”

Addressing a defence conference in Adelaide yesterday, Federal Defence Minister David Johnston said the government would not be tied to defence spending commitments, including a pre-election pledge to build a new fleet of submarines in Adelaide.

Senator Johnston said Cabinet would not agree to major spending plans unless industry delivered better productivity.

The government’s defence white paper, due for release in 2015, would be a “bankable document” with clear deadlines for major projects, he said.

“To demand or to give blanket political commitments ahead of the white paper or any examination of the actual needs of the navy is to indulge in the same low-value conversation that has characterised the last seven years,” he told delegates.

“It is in our national interest and our taxpayers’ overall best interests that we get this right.”

Senator Johnston said a pre-election promise to build 12 submarines in Adelaide was under review because the former government had taken money out of the submarine program.

“That realisation has set us back on our heels,” he told reporters. “We have had to reassess the way forward and we are continuing to do that.”

– with reporting by Bension Siebert

OPINION: We can’t afford not to build submarines

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