More evidence of Tony Abbott’s policy stance on the next generation of Australian submarines was revealed with the release of the RAND report into Australia’s Naval Shipbuilding Enterprise.
By ignoring an Australian build for future submarines, the Government has excluded the benefits of economies of scale when conducting side by side ship builds.
The Abbott Government came to power in 2013, promising to ‘bridge’ the ‘valley of death’ that Australia’s shipbuilding industry will confront—from the end of the Air Warfare Destroyer (AWD) construction to the commencement of the Future Frigate (SEA 5000) and Future Submarine (SEA 1000) projects.
The Abbott Government promised to keep Australian shipyards busy building the warships that everybody agrees Australia needs. But on 22 May 2014 former Defence Minister, Senator Johnston, told ABC Radio:
‘…we’re working on plans; those plans are incredibly complex, very expensive. In the next six months, you’ll see what we’re going to do about the valley of death.’
It is now 19 months since the election of the Abbott Government, and nothing has happened.
Well, not quite nothing. There have been expert reports.
In late 2013 Senator Johnston tasked former United States Secretary of the Navy—Professor Donald C. Winter—and former Transfield chief—Dr John White—to review the Air Warfare Destroyer program. The Winter Review was then handed to the Government in April 2014, with the commitment that its findings would be made public.
The Winter Review promised to be an important document, written by experts respected across the Parliament—individuals well versed in shipbuilding generally—and the challenges confronting our shipyards in particular.
Sadly, except for a brief summary of the findings, the Winter Review remains a secret report, its findings unknown, its recommendations apparently overlooked.
Undeterred, the Abbott Government has persisted with the notion that expert reports into Australian shipbuilding are an adequate substitute for action.
The Abbott Government has now received its second report, ‘Australia’s Naval Shipbuilding Enterprise: preparing for the 21st Century’, by the RAND Corporation.
The $2.5 million RAND report was dead on arrival. The premium cost for local shipbuilding highlighted in the report had been overblown because the building of submarines was never included in the terms of reference. RAND were informed at the outset of the study that Australia’s submarines would be built overseas.
This raises fresh questions about how far Tony Abbott had progressed last year to build our future submarines in Japan, despite a pre-election promise to build them in Australia.
Labor’s plan is to conduct a procurement process involving a Request for Proposal, followed by a Request for Tender.
As part of this process, Australia would invite the most prominent submarine designers from Germany, France, Japan and Sweden to participate.
Labor’s proposed process would deliver a final decision by the end of 2016, ensuring that the first future submarine in the fleet would be in the water by the middle of the next decade.
There are three non-negotiable conditions for these tenders:
- A guarantee of submarine performance
- Australian ownership of all intellectual property
- And the next generation of submarines must be built, maintained and sustained in Australia
Further, in their report, there was no assessment by RAND of how a strong local shipbuilding capability would realise lower costs of sustainment for Defence and Navy.
The report calls into question the capabilities and potential of our shipbuilding industry. An alternative for the government would be to develop a rational path forward to preserve an important strategic capability—as well as the jobs, investment and industry that come with it.
The Abbott Government keeps announcing what we already know; that productivity issues in the industry have been driven by the stop-start nature of its work-flow over decades going back over successive Federal Governments. We don’t need to re-learn this lesson. Rather, government must do something to remedy it.
At the recent ASPI Future Surface Fleet Conference, Defence Minister Kevin Andrews declared that the industry’s ‘valley of death’ ‘cannot be avoided’.
Instead, Kevin Andrews has embarked upon a strategy that is all about politics, evidenced by his re-branding of this long-standing challenge as ‘Labor’s valley of death’, possibly forewarning that this policy issue is now in the ‘too hard’ basket.
The winners will be foreign shipyards.
The losers with be us. The Royal Australian Navy, Australian industry, our workers and our shipyards.