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Page 46 Senate Wednesday, 1 March 2017 CHAIR: Correct. Mr Johnson: Of course, DCNS has opened a subsidiary, DCNS Australia. They opened their office headquarters in Adelaide in December. On the government side, we have added 43 Australian Public Service personnel last calendar year, so that is a bit of an overlap with the time frame you mentioned. We have added 25 technical people on top of that. There have been 278 companies that have responded to our second industry day. The first one was in November. Again, I am trying to match your time frame. That was in Sydney. We have more industry days scheduled. The first one, of course, was in South Australia. We have 452 companies total registered between the two DNSs, France and Australia. Seventy-six are on the list to be qualified as potential suppliers right now. Thirty-nine are already confirmed. We have a collaboration started with Australian universities and research centres. CHAIR: Ink on paper, Mr Johnson? Contracts signed? Mr Johnson: Yes, sir. Contracts with research and universities? CHAIR: Yes. Mr Johnson: I am not aware that they are signed yet. They are in development. CHAIR: And with suppliers? Mr Johnson: Supplier contracts? We are in the design phase. The sequence of events is to register suppliers and confirm their quality capability as we are doing the equipment selections. In about a year from now or so, they start getting the substantive contracts. There will be some—I do not think it is answering your question— monetary compensation. For answers to questions, you have to pay for that level of detail. I sense your question is about long-term confirmed contracts. CHAIR: Yes. Mr Johnson: Those are in front of us. CHAIR: Sure. Mr Johnson: But we are in very good shape. It is a good start towards developing that industry base. It, of course, started with a handover from ASC of our Collins suppliers already. So those are overlapping nicely. The design of the shipyard has already started. We will bring that forward to the secretary later in 2017 in the bids to build buildings and other kind of shipyard infrastructure. Several of the requests for tender will go out this year, but most of it will be in 2018. CHAIR: This is the last question before I go to Senator Xenophon and his line of questions. In the Lockheed Martin decision you advised us of, are there local jobs in terms of giving effect to that contract? Mr Richardson: Yes. There will be. I will hand to Mr Johnson. Mr Johnson: That office also has stood up. There are about 13 people in it. It will grow substantially. Again, most of this is in front of us. About 200 of the total jobs that we have talked about between the 2,800—1,100 direct and 1,700 related, added together being 2,800—will be full-time combat system integration jobs. We have the laboratory. Lockheed Martin has a laboratory already started, so that is the basis that we will work from until the infrastructure is built in the shipyard. We will move from that Adelaide technical park location under the shipyard after the buildings are built. CHAIR: Excellent. Mr Richardson: I might just add that the CEO of Lockheed Martin is in Australia this week and visiting both Canberra and Avalon. We do have discussions scheduled with her which will also cover submarines. CHAIR: Thank you for that. Senator XENOPHON: I want to ask the minister about the naval shipbuilding plan. I refer to the longawaited naval shipbuilding plan, which was foreshadowed by then minister Kevin Andrews in mid-2015 and due for delivery at the end of 2015. Minister, in the Senate last August, you advised me in response to a request without notice that the plan would be finalised by the end of 2016. Where are we at in respect of that plan? Senator Payne: I think Minister Pyne said in the House of Representatives in the last sitting fortnight that the government will release the naval shipbuilding plan imminently. That brings together all of the elements of the government's continuous naval shipbuilding strategy, the first in Australia's history. That is indeed the case. It is well underway. I am sure the minister will release it as soon as he is ready. Senator XENOPHON: In terms of it being imminent, are we looking at this side of the financial year or by the end of the year? FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
Wednesday, 1 March 2017 Senate Page 47 Senator Payne: Most certainly this year and, indeed, this side of the financial year, yes. Senator XENOPHON: Thank you. Senator GALLACHER: We were told yesterday that there are 400 projected losses of jobs between February and December. So how urgently is the minister taking this forward plan announcement? That is 530. Senator Payne: I think the quantifiable difference between how urgently this government and the relevant ministers are taking this and, for example, yours is that we are in the process of commissioning 54 different naval vessels ranging across specific patrol boats, offshore patrol vessels, future frigates and future submarines. You, of course, commissioned not one ship from one Australian shipyard in six years. So that is an indication of the priority— Senator GALLACHER: I think I have heard that before. Senator Payne: that the government places on this matter. The development of the naval shipbuilding plan is making excellent progress. As I said, the minister will release it imminently. Senator GALLACHER: And we have 400 projected job losses on top of— Senator Payne: And as you know, Senator— Senator GALLACHER: Sorry, Minister. On top of 130 we have already lost this year. Senator Payne: Had you done anything about that, that might have been avoided. But it was not because you did nothing. Senator GALLACHER: Well, do something. There are 530 South Australians in the firing line in 2017. You have got your hand on the till. You can make a decision. Senator Payne: Yes, Senator. And we are working towards the cutting of steel on the offshore patrol vessels in 2018 and on the future frigates in 2020 at Osborne in South Australia. As I said, we have commissioned over 50 vessels in the name of the Australian government since we were elected in 2013 to address capability issues that you failed to respond to in six years in government. So it is frankly a little rich for you to say this government is doing nothing. Senator GALLACHER: I did not say the government is doing nothing. Senator Payne: I think you might have implied that. Senator GALLACHER: The workforce planning happening at the moment indicates 325 permanent— Senator Payne: Indeed. Senator GALLACHER: and 75 contractors. Some of them are apprentices. The decision that needs to be made is to allow the workforce planning for 2018 to be made. Senator Payne: And that is part of the naval shipbuilding plan. It is part of the development of the naval shipbuilding plan and a very important part of it. Senator GALLACHER: So urgency. Senator Payne: And I said it will be released imminently. Senator GALLACHER: Imminently? Senator Payne: I am using the words of the Minister for Defence Industry, but he and I are working in the same space on this, and that is the case. Senator GALLACHER: Forget me. There are many thousands of South Australian families that would like the imminently to be a decision made as quickly as possible. Senator Payne: Yes. I am sure that they have reminded you of that many times. Mr Richardson: I might just add that in addition to the ships that the minister specifically mentioned, we have finished with the department of education work on the establishment of a maritime training college. We have done our work in terms of workforce requirements. We are in the process of going out to educational institutions. We are doing all of this in a very full and proper way. I also note that we will be commencing work on the additional infrastructure at Osborne in the second half of this year. So there is a lot of activity going on. Senator XENOPHON: I will resume. Minister, if a plan was to be finalised in 2016, why did the government appoint Mr Jim McDowell as the government's adviser for the naval shipbuilding plan development in December? As you are aware, Mr McDowell is a director of Austal, one of the companies that will ultimately compete for build work in the naval shipbuilding program. Can you not see a massive conflict of interest in this appointment? FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE
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