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"Good news and bad news" for SA in defence blueprint


The Weatherill Government says there is “good news and bad news” for South Australia in today’s Defence White Paper, warning that without guarantees of local construction “our Valley of Death could become someone else’s Mountain of Opportunity”.

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The Turnbull Government has affirmed its commitment to a permanent shipbuilding industry featuring rolling construction of 12 new submarines – the number originally promised by both Liberal and Labor parties.

It has also committed to nine new frigates to replace the eight Anzac-class frigates from 2020 and 12 offshore patrol vessels to be built from 2018.

Controversially the Defence White Paper, released in Canberra this morning, also opens the way for defence to acquire armed drone aircraft, such as the US Reaper or Predator, and a ballistic missile capability aboard the navy’s three new air warfare destroyers.

Prime Minister Malcolm Turnbull said the blueprint “sets out a clear-eyed and unsentimental appraisal of our strategic environment, the threats and the opportunities”.

A continuous, onshore shipbuilding strategy would “fundamentally transform” the industry, giving it a long-term future, he said.

“We will ensure the Australian submarine involvement is sustainable over the longer term by building a new force of 12 regionally superior submarines, doubling the size of our current fleet.”

But SA’s Defence Industries Minister Martin Hamilton-Smith reacted cautiously to the defence blueprint, lauding confirmation of the dozen subs – “a step in the right direction” – and the fact the Government has recommitted to spending two per cent of GDP on defence.

“The Coalition could have backed away from that – they haven’t, that’s good,” he told InDaily.

“But there are some very worrying signals in the paper for SA… they’ve not dealt with the issue of where the subs will be built, whether overseas, in Australia or a hybrid build.”

He says a decision “later in 2016” is code for “after the [federal] election”.

“The way I reads that is an overseas build and a hybrid build remain on the table still, which is extremely worrying,” he said.

“It’s a very big flaw in the paper.”

He was also critical of ongoing doubt about where the frigates and Offshore Patrol Vessels would be constructed, with Western Australia lobbying hard for the work.

“If the OPVs go to Perth there will be a corresponding increase in the workforce in Perth, and in three years’ time we’ll see a bid for frigates and lot of the subs work out of Perth on the back of that,” he said.

“Our Valley of Death could well turn into someone else’s Mountain of Opportunity.”

He said the White Paper fails to take “an opportunity to rule out this equivocation”.

“The industry was hoping they’d have some certainty – the only thing that’s certain is the workforce at Osborne will decline until they know what’s happening with the OPVs,” he said.

Chris Burns from SA’s Defence Teaming Centre told InDaily there was “a lot of positive rhetoric” in the white paper, “but still not a lot of commitment to actually building ships and subs in SA”.

“Having 12 subs is great for national security but if they say ’12 subs built in SA’ that gives industry the confidence going forward,” he said.

He said the lack of clarity on OPVs – a crucial link between the Air Warfare Destroyers build and the subs – was concerning, arguing “Perth will be lining up and saying ‘We can do it too’”.

Federal Industry Minister and South Australian MP Christopher Pyne this morning said the state would be “the big winner” from the subs confirmation, as “everyone knows we’re the only place in Australia that can build submarines”. However, he emphasised that a decision on whether the fleet would even be built in Australia was “obviously yet to be made”.

He also sought to downplay Osborne’s capacity to bid for all three projects, saying: “You have to look at the physical limitations of all the shipbuilding places.”

“The Air Warfare Destroyers are not finished at Osborne… there’s only so much space there,” he said.

But Hamilton-Smith denied this, saying “all of my advice is to the contrary”.

“We can more than adequately build all the patrol vessels [and] for an Industry Minister to be talking down his own state’s capability doesn’t send the right signal,” he said.

Regardless of the location, though, today’s capital commitment to defence is significant, with the initial acquisition cost of the Future Submarines alone at least $56 billion – well over previous estimates.

The Defence white paper puts a figure of more than $50 billion for evaluation, design and construction of the program to replace the Collins class submarines, with a further $6 billion set aside for weapons and systems.

The ongoing cost over the lifetime of the 12 subs could be as much as $100 billion.

A competitive process is under way to choose whether Japan, Germany or France will be involved in building the submarines, with the winner set to be announced this year.

Defence Minister Marise Payne said a rolling acquisition program would be used to deliver the submarines – the first of which will enter service in the early 2030s.

“This will ensure that, over the long-term, Australia can maintain the fleet of regionally superior boats,” she said.

“A rolling acquisition program will also provide long-term planning certainty for Australian industry, for them to invest in both construction and sustainment activities.”

The new submarines will require upgrades to Fleet Base West (HMAS Stirling) and Fleet Base East (Garden Island), as well as new systems for training and rescue.

As part of the program, a review will be conducted in late 2020s to consider whether the configuration of the submarines remains suitable or changes are needed.

By 2035 around half of the world’s submarines are expected to be operating in the Indo-Pacific region.

The white paper also details new advanced missiles for the air force and a new land-based anti-ship missile system.

The army will be re-equipped with a new tactical anti-aircraft missile.

The defence force itself will be expanded to around 62,400 over the next decade, taking it to its largest size since 1993.

This will cost a great deal of money, with the government committing to lifting defence funding to two per cent of gross domestic product by 2020/21 – three years earlier than originally planned when this was announced by former prime minister Tony Abbott in 2013.

As a result, defence spending will rise from its present level of $32.1 billion in last year’s budget to $42.4 billion in 2020/21.

An extra $29.9 billion will be spent on defence over the next decade.

The white paper warns Australia faces a number of strategic challenges out to 2035, with the US-China relationship continuing to be the most strategically important factor in the Indo-Pacific region.

The US will remain the pre-eminent global power over the next two decades.

While a major conflict between the US and China is unlikely, there are a number of points of friction, including the East China and South China Seas, their airspace and the cyber domain.

The paper warns Australians will continue to be threatened by terrorists at home and abroad.

“In the period to 2035, Australia will have greater opportunities for prosperity and development but it will also face greater uncertainty.

“We need to be prepared,” Payne said in a statement.

Defence White Paper key points

* Defence funding to rise to $42.4 billion – two per cent of GDP – in 2020/21, three years earlier than planned.

* Government to spend $29.9 billion more on defence over next decade.

* Relationship between US and China to be most strategically important factor in Indo-Pacific out to 2035 but US will remain pre-eminent global power over the next two decades.

* Conflict between US and China unlikely but there are points of friction including East China and South China Seas, their airspace and cyber domain.

* Government commits to 12 new submarines.

* Nine new frigates to be built to replace eight Anzac frigates plus 12 offshore patrol vessels to replace smaller Armidale class patrol boats.

* Permanent naval shipbuilding industry for Australia to construct new vessels under a program of continuous construction.

* Maritime surveillance capability to be enhanced with seven extra P-8A Poseidon aircraft, making a fleet of 15, plus seven Triton long-range unmanned aircraft.

* Three air warfare destroyers to be equipped with technology to allow for ballistic missile defence.

* RAAF to be equipped with new electronic warfare support aircraft based on the commercial Grumman Gulfstream aircraft.

* Defence to acquire armed drone aircraft, likely US Predator or Reapers.

* Army M1A1 tanks to be upgraded and army to acquire new long-range rockets to complement existing artillery.

* Defence force to grow by 2500 troops to reach 62,400.

-with Max Blenkin and Lisa Martin, AAP


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