Subject: Submarine Procurement


SIMON BIRMINGHAM: Thanks very much for coming. If Jay Weatherill is serious about maximizing jobs rather than votes, he needs to be investing in helping South Australian businesses to bid and participate in the submarine procurement process rather than wasting taxpayer dollars on advertising. There’s an enormous opportunity for South Australia right now, a huge opportunity to secure hundreds, if not thousands of additional jobs by optimising South Australia’s involvement in the submarine procurement process. That won’t be done by wasting money on ads; it can be done by helping the ASC and other defence businesses in SA to participate in this process, to share their knowledge with the international design partners who are bidding and to actually make sure they are putting in place the most competitive bids possible to maximise the amount of work that comes here to SA.  

JOURNALIST: Chris Burns says that the defence industry is being ignored and he can’t understand the government’s motivation in considering building the subs overseas. What is the government’s motivation? 

SIMON BIRMINGHAM:  We want to make sure that we get the best capability for Australia in terms of our defence assets. We want to optimise the return to taxpayers and we want to optimise the amount of work that is done here in South Australia and right around Australia. Now we’re quite serious about optimising Australian industry involvement in the submarine build. This will be Australia’s largest defence procurement activity ever undertaken. It will be worth at least $20 billion. There’s enormous scope for Australian involvement. It was great news on Friday that part of the procurement terms is the optimisation of industry involvement here in Australia. That’s a big, big opportunity for Australian industry and what we need to be doing to maximise that opportunity is have State Governments like South Australia and Victoria working with businesses based in those states to put in the most competitive bids possible, to work with the international partners just as happened on the Collins class, just as is happening with the air warfare destroyers. These are all international consortia working with locally based businesses. The same opportunity exists to do this, this time around with the new submarines and that’s exactly what should be happening.

JOURNALIST: Despite the Prime Minister’s claims on Thursday, Has SAAB in fact built submarines since 1996?

SIMON BIRMINGHAM: What’s clear is that the Swedes have not had a long and continuous and current involvement in both, designing and building submarines; but we do have three identified international partners in the French, the Germans and the Japanese where ASC or any other Australian based builder can partner with one or all of them to put in place really competitive bids. What I would encourage Jay Weatherill and the South Australian Labor Party to do is scrap the ad campaign and invest the money in helping South Australian businesses to put forward the best bids possible to maximise the amount of work that comes to SA.

JOURNALIST: If, as claimed by Chris Burns, that SAAB has in fact built subs since 1996, will the Government consider Sweden as an option?

SIMON BIRMINGHAM: What has been clear in terms of coming down to three options here is that we’re after those companies who have had a continuous and constant and current capability in both designing and building submarines. Continuous and constant. Now, we’ve come down to the French, the Germans and the Japanese because they have that continuous and that constant capability in the design and build of submarines. I’m not hearing anybody saying that Sweden has that current and continuous involvement in designing and building submarines. 

JOURNALIST: Well they’re saying the most recent one may have been as recent as 2013.

SIMON BIRMINGHAM: Well look, we’ve undertaken of course the first step of the procurement process, coming down to three international partners. The debate is not about whether there’s a fourth international partner or not. The debate should be about how much work we can get here in Australia and particularly in South Australia and if Jay Weatherill is serious, if he’s serious about maximising the work for South Australia out of this submarine process then he should be investing taxpayer dollars in helping South Australian businesses bid for work, not
wasting taxpayer dollars on ad campaigns.

JOURNALIST:  But the Government’s ruling out Sweden and other countries for that matter as an option, but on the basis that they haven’t produced submarines in recent years and that may not be correct. 

SIMON BIRMINGHAM: This is based on the best advice of our defence chiefs, on our naval chiefs. I have to say I believe the chief of navy’s advice before I believe Jay Weatherill’s advice.

JOURNALIST: So has our local defence industry expert got it wrong?

SIMON BIRMINGHAM: Well I’m not going to talk about what Chris Burns has or hasn’t said. I haven’t seen his exact comments. What’s clear is we’ve got a great opportunity in SA to get extensive jobs, at least five hundred, but hundreds more, hundreds more jobs on top of that five hundred if we actually invest in working with South Australian industry to partner with those three international companies and to get the best possible outcome for SA. That’s where all our energy should lay. 

JOURNALIST: Where did that five hundred figure come from if we don’t know who we’d be partnering yet to build these subs with?

SIMON BIRMINGHAM: Well this is based on the bare minimum of activity that could occur as part of Australian industry involvement in the submarine build. So we know that there’s at least five hundred jobs extra jobs for South Australia out of the submarine procurement activity. There should be hundreds and hundreds more on top of that as long as we get behind South Australian businesses and all Australian industry to ensure the procurement activities can take place here and that won’t be done through ad campaigns. It can be done by helping businesses put in place the most competitive bids. 

JOURNALIST: Chris Burns claims if it’s a Japanese bid, any maintenance would only need to be done out of Western Australia. Where does that leave the five hundred jobs here? Will they be needed? Will they definitely still exist? If it’s all going to be done out of Western Australia or maybe sent back to Japan for major stuff, where does that leave us?

SIMON BIRMINGHAM: There were two key developments last week. One was the fact that we now know there are three potential international design partners. The other was that the terms of the procurement process as such, that the Government is seeking to optimise Australian industry involvement in the build. So that will be a key factor. We’ll be looking for the best defence capability, value for money for taxpayers and the opportunity to optimise Australian industry involvement. That’s great news for the ASC, great news for industry in Australia and a great big opportunity that we should be seizing with both hands rather than diverting attention by running political campaigns through ad campaigns which is what the Labor Party seems to want to do. 

JOURNALIST: What about the implications for our national security having to build off shore?
That seems to be one of the State Government’s biggest concerns.

SIMON BIRMINGHAM: Let’s understand that all of the major ship building builds in recent times have involved international partners; they’ve been a collaborative effort. The Collins class submarine was designed by the Swedes, the AWD is designed by the Spanish. Propulsion systems are usually manufactured off shore. A lot of the weaponry comes from off shore. There has always been international collaborations. The next generation of submarines was equally always going to be an international collaboration. The opportunity here is one of how we maximise Australian industry involvement rather than see taxpayer money fritted away on ad campaigns. 

JOURNALIST: Can you quash rumours that a deal already has been done with Japan?

SIMON BIRMINGHAM: Absolutely. It is very clear that from the process that was outlined last week that there is a ten month competitive evaluation process where three international design partners will be able to work with local industry to put forward the best bids possible. There’s nothing to prevent the ASC from partnering with all three of those design partners if they want to make sure they’re putting forward the best case to get the greatest amount of work done right here in Adelaide. That’s what I hope the outcome will be, I’m hopeful that will be the outcome but it won’t happen if all we see are political games played rather than effort being put in to presenting the best possible bid.

JOURNALIST: So this hasn’t been a captain’s call by the Prime Minister? This was the thoughts of the entire Government, this tender process? 

SIMON BIRMINGHAM: The defence Minister made very clear last week that this was a decision taken after consultation with the National Security Committee of Cabinet and the Cabinet itself. So the process that’s underway, the three international partners, the decision to optimise Australian industry involvement is one absolutely taken by the Cabinet, shared by the whole Government because we want to see maximum jobs for Australia out of this whilst also getting the submarines our naval personnel need for the future. Thanks everyone.