Topics: AUKUS; Naval shipbuilding in South Australia

Tony Pilkington: The South Australian senator and the Honourable Simon Birmingham Simon is the Minister for Finance and he’s made himself available. Good on him. Good on you, Simon. Welcome to the afternoon show.


Simon Birmingham: G’day Pilko. Thanks for the opportunity.


Tony Pilkington: Now, tell us because of the abandonment or the cancellation, what will we end up having to pay the French consortium who are going to go ahead and build a Collins class subs


Simon Birmingham: Pilko, that will be a subject of some commercial negotiation between Naval Group and the government, so we can’t put a firm figure on that yet. We will have to pay out aspects of the contract. Look, it’s not all wasted the capabilities. The infrastructure elements of that will be important for this new venture in terms of the nuclear powered submarine. And indeed, many of the skills and capabilities and individuals that have been developed in recent years will be crucial for the other projects being delivered to South Australia. The life of type extension of the Collins class, the keeping of the of the full cycle docking work here, the upgrades to the air warfare destroyers that will now be happening here in Adelaide as well. All of them underpinning a trajectory to some 5,000 shipbuilding jobs in SA by 2030.


Tony Pilkington: We were talking a moment or so ago were with the Greg Sheridan, you know, Greg, foreign editor of The Australian. While he’s generally supportive of the idea, he raises the question that these subs were the first of these nuclear subs will not be in the water until 2040. Is that right?


Simon Birmingham: Our aim is to see construction on these new subs commence this decade and the first of them delivered next decade. Now, exactly where the next decade that may be is a question that’ll be worked out over the next 12 to 18 months. If co-operation with the UK and the US in terms of the exact design that will be transferred to Australia and the exact process under which it will be built. But crucially, the other announcements we’ve made today in investing in extending the life of the Collins class and upgrading its capabilities in upgrading the capabilities of our air warfare destroyers in upgrading our missile and other defence systems in Australia. They’re all about making sure that we don’t have anything like a capability gap that we actually deliver the ongoing security for Australia whilst we invest in these nuclear powered submarines because they will then give us enduring capabilities for decades to come that are the best of type for our region.


Tony Pilkington: Greg made the suggestion, senator, that he thought that between now and 2040, we ought to at least build a half a dozen Collins class submarines to give us some presence in that part of the world that we’re understandably concerned about. Any plans to do that?


Simon Birmingham: No. What our plans are is to invest in the half-a-dozen Collins class. Submarines currently have to extend their life to enhance their capabilities and their weapons systems and to do that with our other platforms and with those extra missiles that I said as well. They’re the ways that we can most efficiently get the uplift that we need. Whilst not distracting from the fact that building these nuclear powered submarines in Australia and here in Adelaide will be a huge undertaking, they are even bigger than the attack class submarines that Naval Group was planning on building here. They’re even more technologically sophisticated, and so there will be even more jobs and even more skills required. But that means we also need to make sure we focus our effort on getting that right, and that’s why we will invest in extending the capabilities. We’ve got focus on new areas like missile development and so on in partnership with the US, UK, but also really invest on getting this underway as fast as possible. And you can see the commitment from the US and the UK to partner with us in doing that. By virtue of the fact that President Biden and Prime Minister Johnson themselves stood alongside Prime Minister Morrison to announce that this morning.


Tony Pilkington: Realistically, how many jobs will be created here in Adelaide for the building of these, these subs and how soon will the commencement of the project begin?


Simon Birmingham: So the total workforce across all of these different areas of shipbuilding activity is projected to hit 5,000 in South Australia by 2030. Looking across them, the Hunter class frigates that are already being built and constructed by BAE that’s projected to see 1,500 South Australian jobs at its peak. The decision to keep full cycle docking here in South Australia underpins 900 jobs, but by doing the life of type extension work here in Adelaide as well extends that out to 1,300 jobs. The upgrade to the air warfare destroyers should create a further 300 jobs at its peak and then indeed, the submarine programme itself will ultimately support some thousands of jobs. The precise details of that will depend upon this 12 to 18 month comprehensive piece of work to do with the US and the UK around the precise designs that will be transferred to. Australia, the precise approach to building them here, and of course, then the long term sustainment and safeguard capabilities that we need to have to operate such sophisticated pieces of naval capability.


Tony Pilkington: Now, Senator, just finally, when realistically can we expect to see this influx of new workers, highly skilled workers I’d imagine into South Australia? And when will the project actually commence any idea?


Simon Birmingham: So it’s happening. It is happening now across all of these different spheres, and it’s important to acknowledge today is a challenging day for some of those working with Naval Group on the attack class. But we are giving a firm commitment as a government that all of those skilled designers, engineers, shipbuilders will be supported to transition either onto the new nuclear powered submarine programme or the range of other programmes I’ve just spoken of because the jobs growth that we have is so strong. Companies like BAE, Raytheon, Saab are all employing right now. And what we will particularly need is for the sovereign government owned submarine builder and sustainer in ASC Ltd to also be able to scale up to support the extension of the Collins class and to support our participation in these programmes with the US and the UK. And so it’s crucial that we keep every single one of those skills and will be needing many more. Just left a jobs fair with Premier Steven Marshall and great to see plenty of young South Australians thinking about careers in the sciences, technology, engineering, maths and particularly in terms of defence and space related industries because we’ll need them.


Tony Pilkington: Simon, thank you for the time this afternoon. The South Australian Senator, the Finance Minister, Senator Simon Birmingham.