Bolt Report Sky News

02 Oct 2018 Transcipt


Sky News Live, The Bolt Report

02 October 2018

SUBJECTS: Submarine project; Afghanistan; Liberal leadership

ANDREW BOLT: It was two years ago that the Turnbull Government announced it would spend an astonishing $50 billion to build 12 new submarines in Adelaide.


MALCOLM TURNBULL: Australian workers building Australian submarines with Australian steel, here where we stand today for decades into the future. Fifty years from now, submarines will be sustained here, built here.

[End of excerpt]

ANDREW BOLT: This was controversial from the start. Just building those submarines in Adelaide rather than overseas bumped up the cost by around 30 per cent according to the Productivity Commission. So, $15 billion. It also added delays; the last of these submarines won’t actually be built for maybe 35 years? And the submarines we’re ordering from France’s Naval Group are Shortfin Barracudas which Naval Group only produce in a nuclear version. It’s now got to figure out whether its advanced pumped jet propulsion system- very quiet- can actually work with a sub with a diesel engine.

And now more questions are being raised over the past week by journalists and experts about this vast, vast project that they claim is already behind schedule, over budget, and in trouble. But is that true?

Joining me earlier to discuss that, and our now 17-year military engagement in Afghanistan, was Defence Minister Christopher Pyne.

[Pre-recorded interview]

ANDREW BOLT: Christopher Pyne, thank you so much for joining me.


ANDREW BOLT: Could we talk about the submarines project that now seems to be suddenly controversial; lots of people bobbing up, saying there’s something wrong with it. Let’s go through the various points being made. First, the cost; will the submarines still cost $50 billion?

CHRISTOPHER PYNE: Yes. So, the envelope of money has not changed for the 12 submarines. It’s a $50 billion project. It was at the beginning, and it is still now.

ANDREW BOLT: So, the idea that there’s a cost overrun, that’s not true?

CHRISTOPHER PYNE: There’s no budget blowout, and there’s no schedule delay.

ANDREW BOLT: But the weapons systems, are they included in that 50 billion?

CHRISTOPHER PYNE: Yes, they are.

ANDREW BOLT: So, that’s also not true, that you add that to the thing, okay, this is going very well for you, so far.

CHRISTOPHER PYNE: There’s a lot of misguided facts being put about it.

ANDREW BOLT: Okay. It’s two years on, and people are saying you still have not signed the head document with the Naval Group and that this represents a delay; is that true?

CHRISTOPHER PYNE: No. So, the contract that’s currently running the submarine project is the Design and Mobilisation Contract; that’s exactly, as it’s supposed to be. So, literally, it’s designing the shipyard, designing the submarine, mobilising the workforce, Australians at Cherbourg learning about how the Naval Group design a submarine so they can do it themselves in Australia. So, everything that needs to be being done is being done. The SPA- the Strategic Partnering Agreement- is the 30, 40-year long contract that needs to be signed. But certainly, there has been no ending of works or delay in the project at all.

ANDREW BOLT: And no points of conflict that are causing you to withhold your signature at this moment?

CHRISTOPHER PYNE: It’s a negotiation, and obviously...

ANDREW BOLT: [Interrupts] What are you negotiating over?

CHRISTOPHER PYNE: Well, it’s a very complicated project, and there are aspects of it that the French and the Australians are negotiating. We always knew that would be the case, and I’m not interfering in the negotiations. So Andrew Greene at the ABC said I refused to meet with the Naval Group executives. I’m leaving it to the negotiating team. I saw them all two weeks ago when they were here in Adelaide, by the way, but I haven’t tried to interfere because that’s not my job. My job is to let the negotiating team from Australia do their job. But obviously I'm talking to my counterpart in France, Florence Parly. I saw her Monday week ago I had dinner with her and lunch with her in 24 hours.

ANDREW BOLT: Lunch in Paris can also...

CHRISTOPHER PYNE: No, no, in Adelaide. Even better.

ANDREW BOLT: Even better.


ANDREW BOLT: But two years - is one of the things that you're negotiating over whether you do get all 12 submarines built here or whether a couple, as originally promised, or whether a couple are going to have to be built for a start in France?

CHRISTOPHER PYNE: All 12 will be built here from submarine 1 to submarine 12. That's not negotiable.

ANDREW BOLT: That hasn't changed either?

CHRISTOPHER PYNE: That’s never changed.

ANDREW BOLT: One of the key features that persuaded the Government to buy the Barracuda Shortfin is that really super quiet jet propulsion system. Now, evidence has been given by an expert, Aidan Morrison, to the Senate Economic References Committee, the system can't work properly with a diesel engine. Is he right?

CHRISTOPHER PYNE: No, he's completely wrong and the Naval Group and the Department of Defence have responded to the Economics Committee's report. The propulsion system which is unique to the Barracuda Shortfin will be the propulsion system for - which is the jet propulsion - will be the propulsion system for the Australian version of the Barracuda and it will be a diesel engine and there's absolutely no reason why that can't work. I'm not dissing Aiden Morrison but he's wrong about that.

ANDREW BOLT: So why in last October Jean-Michel Billig, the Naval Group’s executive director of the Australian project, was asked by a journalist does the pump jet technology remain viable for the Australian submarine? His response: it could be viable. He was then asked: so we could end up with a conventional propeller? He responded: yes, yes we could, we could. We could also end up with something different. That clearly suggests there's a problem with this jet propulsion system.

CHRISTOPHER PYNE: There’s no problem. Jean-Michel was new to Australia and new to that job and I don't think he was necessarily well briefed. The decision that the Government made is a propulsion system, a jet propulsion system. That was the offering by Naval Group in the competitive evaluation process. That has never changed and there's no suggestion that it will be altered.

ANDREW BOLT: So Naval Group- the point is the head of the Australian project someone who didn't know anything about the submarine he was building.

CHRISTOPHER PYNE: [Talks over] Andrew, I was surprised when Jean-Michel Billig said that but he’s since been- explained to him that that wasn't the contract that the Government agreed to with the competitive evaluation process.

ANDREW BOLT: Alright. So one of the things you're negotiating is not whether or not you will have this particular process?

CHRISTOPHER PYNE: Correct. The propulsion jet system will be the system for the Australian version of the Barracuda Shortfin.

ANDREW BOLT: Is there a problem that- do the French sort of have us over a barrel? I mean is there an option B if there is some sort of difficulty, whether it's the jet propulsion system or anything else, do you have an option B like another submarine you could go and buy, maybe the German bid that was half the price?

CHRISTOPHER PYNE: Given that we're in the midst of negotiations I don't intend to open the possibility of alternatives, but it’s a nice try.

ANDREW BOLT: You should, you’d get- put the heat on them.

CHRISTOPHER PYNE: I think the heat is very much on both Australia and France to settle a deal that suits everyone. Now, the French have signed on to establishing a sovereign submarine building industry in Australia under this new Barracuda- Australian version of the Barracuda. Sustainment and maintenance; we already have a sovereign capability to do. We've been doing it for the Collins-class submarine and that's world class. We don't want to change that. But France has signed on to building an Australian submarine building industry at Osborne and that's part of the bid that they made in their tender and there's no suggestion that that will be changed.

ANDREW BOLT: What are they wanting that you don't want to give?

CHRISTOPHER PYNE: Well, there's a number of items in the negotiation which I'm not going to go into publicly but I think they’ll be resolved and it's actually on time. There's no particular reason why the SPA needed to be signed in April or in October, it will be signed. At the moment, as I said, the Design and Mobilisation Contract is what's in place and the work that's necessary is continuing.

ANDREW BOLT: Now if it’s on time - even if it's on time, the last of these 12 submarines won't be built until mid-2050?

CHRISTOPHER PYNE: It won’t be that late. So the first one comes into service in the early 2030s and then it's about an 18-month drumbeat, as they call it in the navy, after that.

ANDREW BOLT: Originally you said two years. I’ve been reading two years...

CHRISTOPHER PYNE: Well, it’s 18 months to two years, as the more they do of course the faster it will be. The beginning is it will be two years and then as we get towards the end it will be 18 months.

ANDREW BOLT: Originally though or- the most of what I’ve seen is about...

CHRISTOPHER PYNE: So it’s over a period of time.

ANDREW BOLT: ...mid-2050s.

CHRISTOPHER PYNE: I would suspect that they’ll all be in service by early-2050.

ANDREW BOLT: Early-2050?


ANDREW BOLT: Do you think it’s a little bit like ordering a top-of-the-range Zeppelin in 1900 for delivery just in time for World War II?

CHRISTOPHER PYNE: Absolutely not.

ANDREW BOLT: The timeframe’s the same. I mean how do you know you’re not – now we’re really looking at driverless cars.

CHRISTOPHER PYNE: Because they won’t be the same submarine. So the first submarine will be based on the most up to date technology when it goes into the water. The last submarine is obviously not going to be exactly the same as the first submarine. It will be based on the most up to date technology by the time it goes into the water.

ANDREW BOLT: The most up to date technology in – what is it - 40 years’ time will probably be driverless submarines won't they, just like we're looking at driverless cars.

CHRISTOPHER PYNE: I doubt it very much. I'm quite sceptical about all of those apparent changes...

ANDREW BOLT: [Talks over] They’re already being trialled.

CHRISTOPHER PYNE: Well, maybe the driverless car will replace all of our vehicles...

ANDREW BOLT: No, driverless subs. Driverless subs prototypes are already being trialled.

CHRISTOPHER PYNE: Well, if the new technology in 25 years’ time is a driverless submarine, maybe that will be the technology. I won't be the minister for defence then, but I can tell you, we’ll have the most up to date technologies by that time from the first sub to the last sub. But it's not like buying a submarine at Bunnings. You can't just pop down to Bunnings and come home with a submarine like you’re fixing the watering system at home. These things take decades to produce and the technologies change.

ANDREW BOLT: Well they do if you want a different submarine. I mean if you just wanted a nuclear sub which the Barracuda actually is, you wouldn't need all the design to try and get a diesel [indistinct].

CHRISTOPHER PYNE: [Talks over] That’s got nothing to do- that's not delaying the project at all. Naval Group builds both diesel subs and nuclear subs.

ANDREW BOLT: It doesn't build a Shortfin Barracuda that’s diesel.

CHRISTOPHER PYNE: It's not that hard to modify that Barracuda. But I can tell you there is not an off-the-shelf submarine that suits Australia - and I tell you why: the Indian Ocean is quite a different temperature to the Pacific Ocean and we have to cover both. So therefore we have to have our own unique design as we have had for the Collins-class submarine and we will have for the new class of submarine.

ANDREW BOLT: Okay, you’re just back from a visit to Afghanistan. Now we’ve had troops there now for 17 years - 17 years – and I think that’s a record…


ANDREW BOLT: I don’t know that we’ve ever been in any military conflict lasting that long.

CHRISTOPHER PYNE: No, we haven’t.

ANDREW BOLT: When do you reckon Afghanistan is finally going to be safe enough that our troops can come home?

CHRISTOPHER PYNE: Well it’s a very good question and having been there, I mean apart from prefacing my comments by saying what a great job the Australian men and women of the Defence Force are doing that, and have done there, for the last 17 years, and obviously we’ve lost lives there: over 40 Australians have died there. It’s a very serious configuration that we’ve been involved in and we still have several hundred Australians there, mentoring, training and assisting the Afghan National Defence and Security Forces. I had a meeting with the Supreme Commander there, General Miller, who’s only been there a month, he will give a report to the 30 nations that are engaged there in the Coalition. Certainly, the security situation in Afghanistan appears to be much stronger from the Coalition side of things than the media have reported, on the ground, talking to the people there. It’s certainly not the case that the Taliban is in control of most of the country as we’ve sometimes read. The reality is that the Afghan Government is in control of most of the country. But ISIS is still there, al-Qaeda is still there, Taliban is definitely still there. They are very dangerous and it’s a war zone.

ANDREW BOLT: Still, 17 years. What is wrong with Afghanistan that it can’t get this sorted in 17 years?

CHRISTOPHER PYNE: Well president Ghani had a ceasefire in June which was extremely popular with the Afghan people. There was a sense that the Afghan people are tired of the war, which you’d hope they would be after more than 20 years when you add also their war with the Soviets. So we have to hope that there is an appetite for peace and President Ghani and his government is working on that basis. That was a unilateral ceasefire.

ANDREW BOLT: You’re not talking like a man that’s about to say the troops are out.

CHRISTOPHER PYNE: I don’t think we’re about to say the troops are out of Afghanistan, no. I don’t think we’re about to do that.

ANDREW BOLT: Something’s wrong with that culture if there’s still because those insurgencies cannot last unless there’s some domestic support for them or antagonism to central government.

CHRISTOPHER PYNE: There’s definitely domestic support amongst certain parts of Afghanistan and of course there is the tribal factor here where whether it’s Taliban, or whether it’s Isis or whether it’s al-Qaeda, it might well be that the ideology is not as elevated as the tribal feuds if you like, that have been in Afghanistan for- since Alexander the Great’s time. But we’re not about to leave, but we certainly are working towards a peaceful outcome and we’ve just actually increased our involvement in Afghanistan by about 20-odd Australians who are going to be helping them with their helicopter programs. So look, it’s very serious and we would all like it to be resolved peacefully.

ANDREW BOLT: You obviously were a very strong Turnbull supporter. Now you’ve got Scott Morrison; are you in a better position to win the next election now than you were a couple months ago?

CHRISTOPHER PYNE: Well that will remain to be seen if the people who were inside the party room who didn’t support Malcolm and unsettled the ship if you like, to put it mildly, have decided to put their back into winning the next election. And I think Scott’s got off to a great start.

ANDREW BOLT: Do you think you’re seeing evidence of that?

CHRISTOPHER PYNE: Yeah, I think amazingly, those people who had such great disagreements with the government melted into the bushes and they are supporting Scott Morrison. So, Scott’s got off to a great start, it’s great to see. The public are responding well. They want stability. They want the government to move on and not talk about ourselves which unfortunately we’re doing and I have great confidence with jobs growing, with the economy going well, with the budget coming back into surplus, all the reasons people support the Liberal Party, national security, economic security, we are ticking those boxes and I hope the public will support us again.

ANDREW BOLT: Well you’re saying the conservative critics of Malcolm Turnbull have gone into the bushes, amazingly, but most of the shrapnel flying around is coming from the left side: Julie Bishop, women of the left, complaining about bullying, without making any firm allegations and of course your former colleague Malcolm Turnbull. Isn’t it the problem – isn’t Scott Morrison’s problem the left of the party rather than Conservatives now?

CHRISTOPHER PYNE: Well Andrew, I think that is dissipating the longer Scott is the Prime Minister and clearly doing a good job and being seen to be doing a good job, I think those difficult transactional costs as we’ve seen before too often in the last 11 years, will dissipate. They are dissipating and one will get behind them.

ANDREW BOLT: So you’re still not sure …

CHRISTOPHER PYNE: Certainly I’m behind him, 100 per cent behind him.

ANDREW BOLT: So you’re still not sure whether you’re better off or worse off than you were under Turnbull?

CHRISTOPHER PYNE: Well clearly the disunity in the government seems to have dissipated and I think that is a very positive thing.

ANDREW BOLT: But it’s yet to be proven that you are in a better position?

CHRISTOPHER PYNE: Well it won’t be proven until election day.

ANDREW BOLT: So, well the question of judgement: your judgement before was you’re better off with Turnbull and you can make a judgement now whether you’re better off with Scott Morrison. But Christopher Pyne …

CHRISTOPHER PYNE: We’ll know on election day [laughs] and I hope we will be better off.

ANDREW BOLT: Christopher Pyne, thank you so much for your time.