Launch of NUSHIP Hobart

Media Release – 23 May 2015

MINISTER ANDREWS

Ladies and Gentlemen, can I say it’s a great delight and indeed a privilege to be here in Adelaide and in South Australia today for the floating off of the NUSHIP Hobart.  This as you know is the first of the three air warfare destroyers. This will bring a tremendous capability improvement to the Australian Navy and can I say a particular thank you to the 3,000 or more workers and indeed their families who have worked so hard over years up until now to get to this stage in terms of the ‘Hobart’ and the ongoing work which they’ll be doing in the future with the other two ships as part of this project. Can I secondly say that from the perspective of the Australian Government, we want to see a naval ship building industry in Australia and the only way which we can achieve that is if have a continuous ship building industry in Australia and as I said in my speech today, if Governments and industry work together in the future then we’ve got a good chance of securing that ship building industry for the future but can I ask Admiral Barrett to say a few words on behalf of the Navy.

QUESTION

Could we just get your name and title sir?

VICE-ADMIRAL BARRETT

I’m Vice-Admiral Tim Barrett, I’m the Chief of the Navy. I’m here today in Adelaide to, really to recognise the launch of this the first of the three air warfare destroyers. I am always excited by the launch of a new warship but this with the weather we’ve had bought here has made today quite a special event. This is the first of three air warfare destroyers. It will bring an enormous change to how Navy will do its business in the future. It is a great capability; something we have not had at this enhanced level for quite some time. A proud day for Navy and I give my thanks to all of those who have contributed to the build, the construction and integration of parts of this warship over the last few years to get her to the point that she is today.

QUESTION

Are you happy with the cost of this programme?

VICE-ADMIRAL BARRETT

My concentration is on the – my concentrated effort is on the capability that she offers and this ship offers a capability that Navy has not had for quite some time and, indeed in some areas, that we have never had.

QUESTION

But the Federal Government is very much against the rising cost of this. Does that put a bit of tension between you and the Government?

VICE-ADMIRAL BARRETT

There is no tension. The issue for me is we always need to be able to provide the capability required within the amount of money we have to spend on these projects…

QUESTION

… So you’re saying…

VICE-ADMIRAL BARRETT

… it is my role that we make sure that we introduce the capability that we promised Government we will have done and that is where I spend my time…

QUESTION

…capability of the workforce?

VICE-ADMIRAL BARRETT

I am very pleased with what the ship has produced. If you look at it now you can understand that this is a new ship design, and as it was mentioned by a number of people today. We have bought together – we have integrated a range of capabilities from around the world and from around Australia to bring this ship to acquisition, here in Adelaide. I’m very pleased with the results we see as she enters the water today.

QUESTION

Minister, the Premier, Jay Weatherill, has cast doubt on even the veracity of the audit report that has slammed the cost of this. Does that report actually exist?

MINISTER ANDREWS

Look yes it does and look can I say about this project that we are committed to this project. We are committed, as I said, to trying to ensure that we can have a future ship building, naval ship building industry in Australia. We inherited a mess when we came to Government in terms of this project. We’ve done a stocktake; we first had a report by John White, one of the most eminent ship builders in Australia together with Professor Don Winter, who was the former United States Secretary of Navy. That led to some changes here in terms of the alliance and that’s led to some improvement and we acknowledge that. We’ve now done a stocktake in terms of the future cost of this project because at the end of the day the Commonwealth Government is paying the bill…

QUESTION

… are you happy with that aspect?

MINISTER ANDREWS

– and we have to ensure that this project goes ahead in the future as efficiently as possible because extra money spent on this project is money which can’t be spent on other Defence acquisitions. So we’ve now got a new benchmark in terms of what the cost will be. It’s in the order of about $9 billion. We are committed to seeing through this project and we want to see continuous improvement as has been indicated in the audit report.

QUESTION

Are you happy with that price tag?

KEVIN ANDREWS

Look, my responsibility as the Defence Minister is to try and align three things. The first is the national aspiration which we have as a country in terms of our defence. That can mean regional defence, it can mean humanitarian and disaster assistance like we’ve shown in Vanuatu and Nepal recently. It can mean overseas operations as in Afghanistan and Iraq. I have to secondly line that up and meet what the Chief of the Navy and the Army and the Air force all want and that is the capability from their equipment and their personnel to be able to meet the national aspiration…

QUESTION

… and are you happy with the price?

KEVIN ANDREWS

… and thirdly I have to line up with that the ability to fund all of these projects. This Government is committed to increasing the Defence funding to 2% of GDP by 2023/24 but there is an envelope of funding and if projects cost more than they should that means that that’s going to be at the expense of other projects. My job is to line those three things up and that’s what I’ll continue to concentrate on.

QUESTION

Minister what is the impact of that cost overrun on the possibility of building Australia’s future submarines here?

KEVIN ANDREWS

The question of the future submarines is an entirely different subject. I’ve put an evaluation process in place that is running at the moment. As you know, his will be a project which will involve a partnership with an overseas builder. I visited the German submarine builders and the French submarine builder just recently and in the next few weeks I will be going to Japan to visit them as well. I believe they’re all coming down to Adelaide and Adelaide will remain an integral part of this future project and in terms of the total of the $50 billion or so for the future submarine project over its lifetime then a good two-thirds of that will be spent in Adelaide as the minimum expenditure, so there is a bright future for Adelaide in terms of the future submarines project and on a day like this it’s good to acknowledge the work of the workforce here.

QUESTION

Wouldn’t it have been nice for the Prime Minister to attend and boost the morale of these workers today?

KEVIN ANDREWS

Well, it’s my job as Defence Minister. The Prime Minister’s got many and varied responsibilities and that’s why we have Ministers and as the Defence Minister can I say it’s a great pleasure to be here in Adelaide. It’s a beautiful day and that matches, I think, the sense of achievement on behalf, particularly I think of the workforce and I again congratulate them.

QUESTION

Inaudible

KEVIN ANDREWS

No as I said, as the Defence Minister it’s my responsibility but indeed it’s my honour and privilege to be here.

QUESTION

So just to clear it up, the Premier today has said, to his understanding this report, this sort of report doesn’t exist. What do you say to him?

KEVIN ANDREWS

Oh, it’s just nonsense. Look, at the end of the day, it’s the Commonwealth Government is paying the bill, not the South Australian Government. And it’s my responsibility and our responsibility to ensure that tax payers’ money is expended properly and appropriately.  Now we are going to see this project through but obviously we want it to be as efficient and productive as possible and we had to draw a baseline in order to determine what future costs are going to be because I’ve got a budget and if I spend it on one thing I can’t spend it on another and that’s my point.

QUESTION

(Inaudible) … the timing of the audit findings would sabotage today’s ceremony. Do you think that happened?

KEVIN ANDREWS

Look, we had a discussion about the audit findings in the National Security Committee this week. It was appropriate to put that out there. Look can I say something more broadly; if we’re going to have a future ship building industry in Australia and one which is centred largely on Adelaide, then we have to be realistic about the challenges we face. If we don’t address those challenges then it makes it more difficult to have this future ship building industry. As I said in my speech today, if Government, both Federal and State, along with industry, work together then we can secure that future and I invite the Premier and everybody else in South Australia to be part of this project into the future, working together so we can secure what the people of Adelaide, the people of South Australia but more broadly the people of Australia want.

Thank you very much.