Doorstop in Adelaide

CHRISTOPHER PYNE: Well today marks another milestone in the program of bringing shipbuilding and submarine building to Adelaide because we have announced today Odense Marine Technology will be the designer, the planner for the Osborne South and Osborne North shipyard and submarine yard. Odense Marine Technology is an internationally recognised planner of shipyards, they designed the Irving Shipyard in Canada in Halifax and the Pascagoula shipyard for Hunting Ingalls in Mississippi amongst many of their feats over the years and this is another milestone along the track. So we’ve signed the contract with DCNS for the design and mobilisation of the submarine program, they’ll soon open their offices in Adelaide which is coming up very soon. On Monday we opened the Centre for Defence Industry Capability here at Industry House in South Australia, we’ve chosen Lockheed Martin to be the combat systems integrator for the submarine project. Last Wednesday we did the request for tender for the offshore patrol vessels, so the three bidders for those 12 vessels can come forward with their bids now in a formal way. The future frigates program is also on track so the government is not letting the grass grow under out feet, we are making sure that we’re keeping on schedule, as I’ve said before delay is poison in this particular space and soon, by 2018 we will have beginning a project that will build 12 offshore patrol vessels, 9 future frigates, 12 submarines, almost all of those in Adelaide. We’ll have the most modern and busy surface shipyard at Osborne South and the most modern and busy submarine yard at Osborne North, employing 5,300 Australians and South Australians. So it’s a great day today for Odense to be chosen to be on their path, we made that decision last Friday, we signed the contract on Sunday and they started work on Monday so nobody can accuse the government or defence of dragging their feet.

JOURNALIST: What’s the monetary value of the contract, how much will they be awarded for the design?

CHRISTOPHER PYNE: Well I know what the figure is but we’re in a negotiation with Odense about final costs so I think it would be unwise to flag how much the government is prepared to spend at this stage but it’s obviously a valuable contract. It’s a very important part of the job so they will plan the shipyard and then in July next year or hopefully around mid next year we’ll actually begin the infrastructure. This is an important part of keeping the workforce busy so not only do we have the valley of death to deal with from Labor but we’re trying to fill that in with things like infrastructure, so the sooner we can begin that infrastructure those people who are working down at the yards now will be game fully employed and we won’t lose them, because as you can see we’ve got to take our shipyards from about 1800 personnel, to 5,300 over 6 years, it’s a very big part of the jigsaw puzzle.

JOURNALIST: So will those ASC workers be working on this shipbuilding expansion…

CHRISTOPHER PYNE: Sure.

JOURNALIST: Or will they lose their contracts first or…

CHRISTOPHER PYNE: No.

JOURNALIST: Or are they going to be redeployed straight away?

CHRISTOPHER PYNE: Well it’s a combination of factors, the air warfare destroyers are still being built and they’re expected to be completed by the end of next year, but then there’s a whole lot of processes around sea trials and final handover of the air warfare destroyer so there’ll continue to be a fair chunk of workers working on the AWD program. Then the offshore patrol vessels begin in 2017, so the beginning of 2018 the offshore patrol vessels begin employing at least 400 people in Adelaide, so there’ll be people gainfully employed on that project as well and from mid next year right through for years into the future there’ll be infrastructure because they have to build a shed for the submarines which is actually higher and wider and longer than the Adelaide Oval so you won’t quite see if from space but it will certainly be a very large structure. And on the other side, Osborne South, they have to re-do the infrastructure for surface ships, so a lot of those workers will get jobs, gainfully employed in that infrastructure, and of course the ASC is the overall owner of the infrastructure because the government’s promise was to keep the assets in public hands which means that those workers will continue working for the ASC.

JOURNALIST: Will Odense be brining many workers over or will the majority be Australian?

CHRISTOPHER PYNE: Well Odense will have to make those decisions, of course a lot of their designers are Danish working out of Denmark and we’re contracting them because they have the skills and expertise, but they’ll probably use Australians as well but I haven’t got a figure on how many Australians will get employed. So they’re designing the yards like an architect as opposed to doing any of the building of the yards so there won’t be a huge number of people employed in that process but of course there’ll be some spinoff benefits in that respect.

JOURNALIST: And what stage are you at with contracts signing with DCNS, because from what I understand you’ve only signed one contract with them so far.

CHRISTOPHER PYNE: Well there’s only 2 contracts to be signed with DCNS, one is the design and mobilisation contract, which has been signed, that was signed in September so they’re under way, they’re off and running talking to everybody in Adelaide and so on. The second one is the build contract which won’t be signed until the early 2020s so you and I might still be in these jobs when it’s signed, I hope so, that would mean I’d be the Minister for about nine years but the second contract…

JOURNALIST: (inaudible)

CHRISTOPHER PYNE: Well because our preference and our expectation is that DCNS will build the submarines as well as design them but we don’t need to sign that contract until the build begins, which is in 2022 so therefore why would be pre-empt that, I mean that wouldn’t be smart business for us to give a company a contract that doesn’t need to be signed for six years.

JOURNALIST: Minister just on the economy, I mean we had those GDP figures come out today, is it disappointing that the numbers have come out that we’re half-way through an official recession?

CHRISTOPHER PYNE: The doom and gloom from the ABC, no, well the last quarter, that quarter had a few important factors involved in it, the US election, the Australian election, so that explains the slow down, the contraction in that quarter. The economists say we’re on track to grow in the next quarter now that those important decisions have been made and let’s hope that’s the case.

JOURNALIST: And you don’t see a repeat performance next quarter, you see things (inaudible)

CHRISTOPHER PYNE: Well the experts say that there won’t be a repeat performance next quarter so I can only rely on the economists.

JOURNALIST: Just on the discussion around the emissions trading intensity scheme, what do you think Josh Frydenberg was thinking when he said the government was considering an emissions intensity scheme?

CHRISTOPHER PYNE: Well the Prime Minister’s made it very clear that we are continuing with our direct action policy which is working, we have surpassed our Kyoto targets, we will meet and beat our 2020 targets for emissions reduction and we have the policies in place to meet our 26-28% reduction in emissions target based on 2005 numbers by 2030 so that’s all going really well. Part of the policy that the Abbott opposition announced in 2010 would be a review of our climate change policies, all we’ve done is announced that review has begun, the Prime Minister’s made it absolutely clear that there’s no policy and nor will there be one for a price on carbon of any kind.

JOURNALIST: But six years ago your boss was a supporter of an ETS, why do you think he has now, six year on, changed his mind?

CHRISTOPHER PYNE: Well our policies are working without a price on carbon so that’s what we want to continue to do.

JOURNALIST: Now just with DCNS, with your negotiations, have they at any stage been concerned about power in this state with negotiating with you at all given that other BHP majors have all indicated real concerns with the generation of power here.

CHRISTOPHER PYNE: Well DCNS hasn’t raised power with me so I don’t know whether they’re concerned or not. A project of this size which is quite transformative for our state, which is actually bigger than Roxbury Downs by the way in terms of the economic impact on the state, will require certain power at certain prices so the South Australian Labor government has a responsibility as the government responsible for ensuring that we keep the lights on in South Australia, and it’s not good enough for them to come up with excuses why it’s everybody else’s fault. Now they were the one that chose to put so much effort into renewable energy, they were the ones that helped chase the northern power out of the Spencer Gulf, now they have to face up to their responsibilities, this is the inevitable outcome of Labor trying to secure their Greens base in the city rather than worrying about the jobs for workers and businesses around our state.

JOURNALIST: And Minister Pyne your South Australian, you know what it’s like, you’ve just been talking about it, but do you think that there should be a second interconnector into South Australia?

CHRISTOPHER PYNE: Well that’s a matter that the state government and the other governments involved, New South Wales, Victoria, the federal government need to talk about. I’m not going to make state government policy for this government or for the opposition but obviously their responsibility is to provide power to the 1.7 million people who live in this great state and the businesses that rely on power. And they can’t be a government that says they want to grow jobs and get investment in the state when people from all around the world are looking at South Australia and wondering whether there is certain power and at what price.

JOURNALIST: Would you be requesting that DCNS generate their own power, or advising in that respect?

CHRISTOPHER PYNE: I’m not going to advise DCNS of anything on that regard, we will sign a contract, well we signed a contract with DCNS for design and mobilisation, you would expect we’ll sign a contract with DCNS eventually for building when we get to that point and I’m not going to advise them what they need to do about power. As everybody knows in South Australia our lack of power is on the tip of everyone’s tongue, everyone’s talking about how to resolve it.