AmCham Luncheon Keynote Address

AmCham Luncheon Keynote Address

Adelaide, 31 August 2017

It’s a pleasure to be here at the American Chamber of Commerce and have the opportunity to speak with you this afternoon.

I have two very simple goals for today.

I want to leave you with absolutely no doubt that the Turnbull government’s commitment to the Australian defence industry – and absolutely convinced of the government’s commitment to this State we all call home, South Australia.

We are doing something no Australian government has ever done before – and South Australian is central to our plans.

We are ensuring that our national security is provided for in a way that will also deliver economic security.

We are dotting the I’s, crossing the T’s – developing a blueprint in the most careful and considered way to deliver enhanced defence capability and growing the capacity of Australia’s defence sector in a way that will grow smart manufacturing and the other innovative industries vital for economic success in the twenty-first century.

Not only will this create almost boundless opportunities for South Australia and Adelaide.

These opportunities will have a life measured in decades, in generations – infinitely longer than those whose misinformed postulations struggle to survive in the media cycle for more than a few hours at a time, yet keep on coming.

These people claim to be the only politicians South Australians can trust, yet all they offer are armchair critiques and endless variations on the old States versus Canberra blame game.

In contrast, I’m about new ideas, new approaches and new opportunities – building on an established track record.

Around this time last year, speaking at a defence conference just next door at the Convention Centre, I noted how when you step out onto North Terrace, you’re likely to spot a numberplate that reads “South Australia: the Defence State”.

As I said back then, South Australia is the proud home to a vital range of world-class industries responsible for many of the nation’s largest and most complex defence projects.

Not only does this state make a major contribution to our defence capabilities.

The defence sector makes a crucial contribution to South Australia.

It’s deeply embedded in the life of the state.

This year, we’re marking the seventieth anniversary of the Woomera research facility and the fiftieth anniversary of the launching from there of the first Australian satellite.

Woomera’s glories aren’t all from the past.

It continues to be a test bed for cutting-edge technology.

In recent months we’ve only just wrapped up a series of tests of a hypersonic vehicle, capable of travelling at over 10,000 kilometres an hour and still change direction.

And we announced in June last year, a 300 million dollar upgrade for the Woomera Test Range, to be carried out by Raytheon Australia.

Along with one other testing range in the United States, Woomera is one of the two best rocket testing ranges in the world.

The defence industry has been an integral part of this state since the Second World War; a major driver of innovation, research and development – and economic activity.

That is how the Turnbull government views the sector – not just a fundamental contributor to our military capability and national security but a crucial element in the future of our advanced manufacturing and high tech industries, a guarantor of national prosperity.

And in the months since I gave that speech, words have become deeds – nowhere more than here in South Australia and with none bigger, more ambitious and far reaching than the Naval Shipbuilding Project.

Instead of stop/start policy; inching in one direction, pausing, then shuffling off in another before pausing again, the Turnbull government has embraced the bold vision.

We’ve made the strategic decision to transform our naval shipbuilding and sustainment industry here in Australia, using Australian workers and Australian resources in Australian shipyards in a way that will deliver benefits to Australians for decades to come.

We are laying the foundation for a long-term naval shipbuilding and sustainment capability which will be a strategic asset for the nation but, additionally, a major driver of economic activity, of research and development, of skills and training.

This is our agenda for defence industry – and for South Australia.

The Coalition is harnessing the transformative potential of an unprecedented 89 billion dollars worth of expenditure on the rolling acquisition of new submarines and the continuous build of large warships and minor surface vessels.

By adopting a continuous naval shipbuilding program we will deliver long-term employment and economic benefits across the country – benefits that will be both exceptionally noticeable and welcome here in Adelaide.

The Osborne South shipyard and Osborne North submarine yard have been selected as the country’s only construction site for large naval vessels.

Let me spell out what that means.

Work will commence next year, with the construction of our first two Offshore Patrol Vessels.

It will be followed by the building of nine Future Frigates from 2020.

And work on the 12 Future Submarines will begin here in Adelaide from around 2022-23.

Every one of the submarines will be built in Adelaide – from number one to number twelve.

The remaining 10 Offshore Patrol Vessels and up to 21 Pacific Patrol Boats will be built in Western Australia.

As this work gets underway, those of narrow vision and low horizons might like to note that Osborne South will be the beneficiary of over half a billion dollars’ worth of spending on modern shipyard infrastructure. The same will be spent at Osborne North to create modern submarine yard infrastructure.

This money is starting to flow.

Just last week I was proud to turn the first sod to mark the start of construction work at Osborne South.

And we’re already beginning to see confidence in the government’s investment decisions reflected by private sector investment too.

Earlier this year I attended the opening of the Pacific Patrol Boat Shipbuilding Facility in the West.

It was a yard that had fallen victim to the vicissitudes of the mining boom, reborn as a vibrant construction shed.

Not long ago I cut steel on the first of the Pacific Patrol Boats.

It’s impossible not to see the government’s spending influencing private sector investment and job creation plans here in Adelaide.

At the same time ASC, in its new form, will continue to play its part supporting the key capabilities of shipbuilding and submarine sustainment, while the newly formed Australian Naval Infrastructure Pty Ltd is the custodian of naval infrastructure.

The workforce at Osborne remains critical to our continuous build programs.

Osborne’s workers will be in high demand, with new calls on their skills and initiative regardless of the shipbuilders and contracting models selected to deliver our new vessels.

We will need an additional 5,000 skilled workers at Osborne between now and the mid‑2020s, along with a further 10,000 workers nationwide to support sustainment activities and industry supply chains.

We’ve moved decisively from the Rudd‑Gillard‑Rudd indecision and the Valley of Death that they created, to long-term certainty for the South Australian defence industry.

Modernising our naval forces is a complex, generations-long activity that will ensure Australia’s naval capability, create economic growth, maximise local industry involvement and secure thousands of jobs for decades to come.

Again, it was here in Adelaide that I first described this government’s defence plans as “our great national endeavour”.

I used this term very deliberately – not just because we sit in the heavily militarised Indo-Pacific region; a region which we share with seven of the world’s 10 largest standing militaries and five of the world’s declared nuclear nations, one of which is North Korea.

I used this term not just because of the significance of our defence expenditure for economic prosperity.

I talk about our great national endeavour as I want Australians to see our defence projects as something everyone has a stake in – a source of pride and, more practically, a source of skilled, rewarding jobs.

Australia’s defence industry is embarked on some truly extraordinary ventures, working with our research institutions.

I spoke about hypersonics a moment ago.

We’re also working on the defence and broader industry applications of autonomous intelligence and virtual reality.

We are working in areas that only a decade ago were the stuff of science fiction.

The “wow” factor of these ventures is extraordinary.

And so is the “wow” factor of projects such as the Future Submarines.

It is a national endeavour of a size never before witnessed in Australia.

Its technological demands will far outstrip anything we have ever seen.

It requires us to harness all the skills that already lie in our defence and wider industrial base, while also leveraging the expertise of our trusted international partners.

The Turnbull government has embarked on a decades-long great national endeavour that will not only position Australia at the forefront of defence technology but has been specifically designed to maximise opportunities for local involvement, especially from small to medium sized enterprises.

Achieving a sustainable naval shipbuilding and sustainment capability will require a motivated, innovated and cost-competitive Australian industrial base.

This not only means that there will be plenty of new opportunities for small to medium sized businesses to contribute to naval shipbuilding and sustainment activities right around the nation – including through the supply chains – driving investment and growth in local economies.

Those increased opportunities themselves will create a stronger industrial base that is better positioned to take advantage of export opportunities and find new niche global markets and places in international supply chains.

Our ultimate goal must be an Australian naval shipbuilding and sustainment industry that is not solely reliant on Australian defence work for its viability.

The long lead times of much of the process leaves us with no scope for complacency.

Time wasted at the beginning of any project is always time that must be made up at the end.

That means we must get things right from very beginning.

It is why my job as Minister for Defence Industry exists.

It is part of a long-term commitment, not just a one-election gimmick or a chase for some headlines.

I am here to ensure that when the government spends Australian taxpayers’ money it is spent on what our serving men and women need, that it provides them with the best equipment, that it does the most to serve the national defence and regional security and – wherever possible – it is invested in Australia in a way that will produce the broadest economic benefit.

The Government’s 2016 Defence Industry Policy Statement officially recognised the importance of Australian industry as a fundamental input to defence capability for the very first time.

The Naval Shipbuilding Plan demonstrates this policy in action.

Yes, our naval shipbuilding and sustainment agenda is ambitious, but the government believes Australia is up to the job.

Indeed, we expect our workers will embrace the challenge.

Our high-tech future defence industries will provide considerable opportunities for young Australians to make a contribution.

They will want to be part of a sector on the rise, offering trade and professional opportunities working at the cutting edge of technology.

Those opportunities will be considerable.

We are undertaking projects of a size unseen since the Snowy Hydro Scheme, but with a footprint spread much further.

The importance of young South Australians – today’s school students – in delivering our future defence capability cannot be overestimated.

Taking up science, technology, engineering and mathematics as subjects will unlock new realms of opportunity for young people and give us a workforce equipped for the task ahead.

The government is playing its part ensuring that we are investing in the right skills and programs in defence and industry and working with the states and territories towards our goals.

We are also supporting defence industry STEM and skilling by allocating an initial 25 million to establish the Naval Shipbuilding College, to be based here in Adelaide, to help meet the steep ramp-up in workforce demand in coming years. It will open its doors 2018.

We have already made good progress building our future defence industry capacity through the Centre for Defence Industry Capability, backed by 230 million in funding over the next decade to be the key agency in delivering the new partnership between defence and industry.

The CDIC is providing advisory and facilitation services, along with access to grants to implement its recommendations.

Almost of quarter of these have gone to South Australian SMEs.

In just one example, Magill-based Supashock is set to receive a grant of almost five hundred thousand dollars to develop its dynamic suspension technology for armoured and defence vehicles produced by the major German manufacturer Rheinmetall.

The CDIC connected the two companies under our Global Supply Chain initiative.

At the same time we have also put 640 million dollars towards the establishment of the Defence Innovation Hub, designed to bring defence, industry and our academic and other research bodies together in closer collaboration on innovative technologies that can be developed into advanced military capability.

Since its launch last year, the Hub as already signed off on more than 13 million worth of contracts to further develop and mature innovations.

There’s also the Next Generation Technologies Fund, supported by 730 million dollars over the decade to again support collaboration and innovation.

Programs being developed under the fund include the Grand Challenges program, to tackle tough defence issues, a dedicated technology program to monitor emerging futures, a small business research innovation program, a strategic research program and university research networks.

The first Grand Challenge was launched in April and will address countering improvised threats, which today remain a world-wide threat to civilian and military personnel. Information sessions were held across the country early in May, with over 650 registrants from industry, academia, government and Defence.

The government recently announced the formation of the first Defence Cooperative Research Centre on Trusted Autonomous Systems to develop self-operating robotic systems for combat zones; supported by 50 million dollars over seven years and under the charge of someone I’m sure you all know, Jim McDowell, the current Chancellor of the University of South Australia.

In other local developments, South Australia will be the home of the increased maritime surveillance and response capability with up to 15 Poseidon aircraft being acquired for the RAAF.

We’re also purchasing high-altitude Triton unmanned surveillance aircraft.

RAAF Edinburgh will support these capabilities.

It will also host the control centre for our strengthened space situational awareness capabilities, which will be introduced this year.

The government will also upgrade and enhance the Jindalee operation radar network, including the control centre at Edinburgh.

The government has announced a review of Australia’s space industry capability that will lead to a strategy for the sector that will recognise its significance to key national interests such as defence.

The 2016 Defence White Paper acknowledged the importance of space based and space enabled capabilities and the vital role they have for Australian and coalition operations.

We’re already committing funds to this field, with the announcement last month of a major communications boost for active Australian forces though a 223 million dollar contract with Northrop Grumman Australia for the acquisition, construction and support of a new satellite ground station.

Also announced last month was another Australian success in space, the launch of the Biarri-Point cube satellite, a crucial research tool.

The new opportunities offered by small satellites mean defence’s involvement in space research is expected to expand.

I imagine there will be more to say on these subjects when the International Astronautical Congress meets here in Adelaide later this year.

But to close – back down on earth and in the present – let me just reiterate.

I said I had two very simple goals for today: to leave you absolutely convinced of the Turnbull government’s commitment to the Australian defence industry – and equally certain about the government’s commitment to South Australia.

Under the Turnbull government Australia is embarking on one of the most extensive and ambitious naval shipbuilding programs anywhere in the world.

South Australia is central to our plans – and will be crucial to their success.

We are not leaving anything to error.

Instead, while others talk, we’re getting on with it; carefully and methodically so we can maximise the benefits of this game changing investment.

This state will reap a bounty of benefits from the 90 billion dollar investment in new submarines and surface vessels we are sharing between here and the West and our one billion dollars’ spending on modern shipyard infrastructure.

South Australian workers will be the winners from our 25 million dollar investment in naval shipbuilding skills development initiatives.

On top of these, the state’s defence industries – established and newcomers – are in a prime position to not only take advantage of the many other opportunities I’ve outlined in our unprecedented updating and expansion of Australia’s defence capabilities, but to be the first to capitalise on their broader applications outside the military sphere.

Just remember: the 2016 Defence White Paper outlined nearly 200 billion dollars in investment in defence capability across the decade to 2025-26 alone.

Think of the transformative power of just that spending.

We are accompanying it with the 1.6 billion dollars of expenditure announced in the Defence Industry Policy Statement to make sure we get the most for our money.

We have created the Defence Innovation Hub, the Next Generation Technologies Fund and the CDIC to grow the capacity and capability, the innovation skills, not just of our defence sector but industry more generally, securing skilled, rewarding, long‑term career paths for local workers in the process.

As the defence state, South Australia is a key beneficiary.

And as the Minister for Defence Industry and a proud South Australian I’m determined to see this state prosper.

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