SENATE

Wednesday, 1 March 2017 Senate Page 45
Senator KIM CARR: This is a problem that is now becoming quite acute. I am not saying it is necessarily a
matter of any one administration. I am saying that the question about the capabilities of the Commonwealth to
perform its function—this is a good example, but it flies through in a whole range of areas. I think you were
drawing attention to that earlier today, Mr Secretary—the number of consultants that are being employed and you
were proposing to put a cap on the amount of money spent on that matter. So clearly it is a matter of concern to
you. Is that the case?
Mr Richardson: This particular matter is not. Indeed, I remember the discussion with Mr Lawrence and
others. This was an area that was seen as perfectly appropriate to outsource. We want the service. We want certain
service levels kept and, provided that it is kept, that is our major interest. We do not need all of these skills inhouse.
What we do need is appropriate skills to manage arrangements of this kind.
CHAIR: We will break for lunch.
Proceedings suspended from 12:29 to 13:29
CHAIR: We will resume. Since I have the opportunity, I would like to ask this, if I may: since last estimates,
the government has signed the intergovernmental agreement with France in relation to the future submarines. Can
somebody assist me to answer some questions in that space? Thank you very much for coming back to the table.
Could you please give me an overview of the intergovernmental agreement with France and, particularly, what
Australia has been able to secure in terms of our capability and the future of that project, please?
Ms Skinner: The intergovernmental agreement with France is an overarching government-to-government
agreement which sets the relationship Australia will have with France during the delivery of the future submarine
program. It was signed by the minister for defence on the French side and the Prime Minister on 20 December. It
enters the Joint Standing Committee on Treaties in February. There are public hearings being held in the next few
weeks. The agreement, as I said, underpins the procurement of the submarine and all of the arrangements that
need to be put in place. It is the framework and it defines our cooperation between the two countries so that we
can develop a sovereign capability and sustain that sovereign capability. The key issues that are covered in the
treaty include technology transfer, intellectual property, export controls and security of supply, which is about
ensuring that Australia can maintain a sovereign capability in its relationship with France. It also speaks to
maximising Australian industry participation in the program. So they are the key elements that it covers.
CHAIR: At the last estimates, concern was raised at the possibility of US concern with the selection of DCNS
to partner with Australia. At the time, you indicated had you no concerns or you were not aware of any being
raised. I want to ask you two questions. Does that situation remain? Are you able to share with the committee any
further engagement we may have had with the US on this submarine?
Mr Richardson: No concerns were raised at the time and no concerns have since been raised. Secondly, since
the last committee hearing, Lockheed Martin have been awarded the contract for the weapons systems integration.
They have already started productive discussions with DCNS about the way they will work together. But no US
uniformed or non-uniformed personnel of any significance have ever raised with us any concern in respect of the
acquisition of the DCNS submarines.
CHAIR: As an extension of that, we are now some months down the track. We have had some advances
made. I am just interested in knowing what now is the view of Defence, of the Navy, the submarine community
and the wider community. In that context, are we seeing yet any increase in staff, particularly in South Australia?
What is the mood now?
Mr Richardson: I think it is fair to say that, first of all, this is a very long program. It is a very big program.
We are still in the early days. But we are starting to see movement in respect of South Australia. The submarine
area headed up by Mr Steven Johnson is engaged in recruitment activity across the board. DCNS are increasing
their engagement in Australia. There have been roadshows which the Capability Acquisition and Sustainment
Group has undertaken in numerous states making Australian industry aware of possibilities. DCNS haves also
been reaching out. We are also in the process of establishing ourselves more substantively in France itself.
CHAIR: So we are all focused on opportunities for Australian jobs, Australian industry and Australian
content. What more, if anything, can you share with us now that you could not share with us in October last year?
How much more confident are you now of employment prospects and opportunities for industry and, indeed, that
very, very sensible question about Australian content?
Mr Richardson: Well, the government has been committed from day one to maximising Australian industry
involvement. Everything we have been doing both at the state level and in our engagement with the private sector
has been designed to maximise that. I do not know if Steve wants to add anything to that.
Mr Johnson: Your questions, I sense, are more South Australia specific.
FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE