By Matt Keogh MP

28 May 2021

FRIDAY, 28 MAY 2021
SUBJECT: Australian Defence Industry.
LEON BYNER, HOST: We are supposed to be able, through defence industry spending, and there's billions of dollars here. We're supposed to be able to employ a lot of people. In fact, in South Australia, we're supposed to be known as the “Defence state”. And we're supposed to be able to employ a lot of people on very well paid jobs. But I've got the Shadow Minister for Defence Industry, who's in town, visiting some of these industry sites, and finding out what's working, and what isn't. So let's talk to Matt Keogh. Matt, what can you tell us and thanks for coming on.
Matt Keogh MP, Shadow Minister for Defence Industry: Great to be with you this morning, so thanks for having me. It's good to be back in South Australia - very much as you say, the “defence state” with some really good industry work going on. I've been doing some interesting visits today and some more this afternoon. But it is quite concerning. There’s a lot of good government, government rhetoric, but it’s about making sure that that's being lived up to, projects that are being delayed, the hundreds of billions of dollars of spend where we're seeing not all that money is being spent because we've got delays in projects and a lack of certainty around projects.
BYNER: Just explain, what is the delay and what's the certainty?
KEOGH: Well, some of these delays are around things like we don't have certainty what's happening with the Future Submarine Project - the Attack Class project is an ongoing dispute now, between the government and Naval, about what's happening with finalising that design but also, what counts as Australian industry content? We want to see that we're not just having jobs in terms of, you know, bending metal or welding metal that we're getting jobs in developing our IP, our technology, our engineering capability here in Australia, those real jobs of the future, that mean that we don't just build something here, but that we can sustain it and upgrade it in the future.
What we've seen revealed last week, for example, is in the contract with Naval, when Australians go and work on something in France, that's counted as Australian work. So that means it comes out of the minimum requirement of work to happen here in Australia.
BYNER: Why is that thing allowed?
KEOGH: We'll exactly right, exactly right! That's what we want government to answer for. We’ve seen, the definition - we saw previously, last year, the government where they said, oh, we're spending at least 60 per cent of the future submarine project has been spent on Australian industry. And then we found out that that included things like security guards, hotels, travel agents, French language lessons…
BYNER: French language lessons!
KEOGH: that's right, French language lessons for the Naval management here in Australia was counted as part of the minimum spend, that doesn't develop our engineering capability, that doesn't develop our technological, intellectual property here in Australia.
BYNER: Isn't there's somebody auditing all this? Making sure the money is going to where it's supposed to? Doesn't someone do this?
KEOGH: Leon, you hit the nail on the head, this is the key part of the problem. And that's why last year Labor gave a commitment that if we come into government, not only do we want to make sure that there's minimum capability requirements, not just the spend requirement, but a minimum capability requirement, but that it is transparent, so industry can understand what it means, and that it's audited, and that there's actual penalties involved, if these foreign prime companies are not actually living up to the promises that they're making, not just to the government, but to the Australian people.
Because as we see our geostrategic situation, potentially worsen, we need to make sure that we are more self sustainable here in Australia, that we've got the manufacturing capability to support our defence force going forward. And obviously, South Australia is a key part of that. And there's great technology development going on here. I've just been down at Flinders University, and they're working with BAE and a lot of SMEs here. And that's really critical that we get them into the local supply chain for Defence and into the international supply chain for defence, but we need to make sure we grow them as well. So it’s not just small businesses providing bits of technology or some component, but that we build our industry here to be able to take on those major project roles, have our own homegrown primes. That's why, part of why, Labor has announced our national reconstruction fund - to partly enable these things not just in defence industry, across all of our advanced manufacturing sectors, to make sure we're more self-sustaining as a country. But it's obviously critically important when it comes to defence industry that we're able to look after ourselves more to support our defence force more here at home, and rely less on having to get things in from other parts of the world.
BYNER: Where are we, with this submarine spend? Has that been a matter that's been settled? Or is it still being discussed?
KEOGH: Well, it's still being bargained. And in fact, we’re probably finding that we know less than we thought we knew before. We've got defence estimates coming up next week, and we're certainly going to be pressing the Government to provide some answers. Over the last few days, we've seen reports that the government's asked Navy to look into an alternative to the Naval future submarine, a project called Son of Collins through SAAB. We're also hearing this week, the government might be looking at a stopgap submarine solution, something that they may buy off the shelf to cover the capability gap between our current Collins class submarine, and when we may get the new attack class submarine from Naval. Now, all of this comes with a very strong question mark, which is if we're going to have a capability gap, if government's concerned about a capability gap, in what is probably our most important defence capability, our submarines, and it's important, because they’re stealthy, when you put a submarine to sea no one knows where it is. That's a huge deterrent capability that you have with a submarine. If government's concerned about a capability gap there. That's very concerning. When the government's also putting out rhetoric about the increasing instability in the geostrategic situation in our region right now.
BYNER: How many subs have Australia got now? Do you know?
KEOGH: So right now we have six. And six submarines means that we're able to have basically two in operation max at any one time. The future submarine project is about having 12 submarines, which is a big step up in capability. But remember, we won't get the first one of those new ones until well into the 2030s. And we'll be looking out to 2050 by the time we get the last one, which means we're relying on the current Collins Class submarine well into the 2040s at this stage, and there's a lot of work that has to be done on them, what they call a life of type extension, to make sure that they can continue to provide the required capability well into the next 20 years. The thing about that is, Government's not being clear on how much that's going to cost, when it's going to start, what the scope of that work is they haven't made those key decisions.
BYNER: Well who will do the work? 
KEOGH: Or who will do the work! How it's going to be configured. We are we are waiting. The population of Australia is waiting but critically, the workforce is waiting. They want certainty. The supply chain. It's not just about the workers for ASC, businesses that supply components or subcontract. They all want the certainty as well. The government who said they would provide an answer and make an announcement by Christmas 2019 has still not made a decision or an announcement on this. They said they'd make it by Christmas we thought they meant that year. Turns out it might not even be by Christmas 2021.
BYNER: Matt thank you, that's Matt Keogh who is the Shadow Minister for Defence Industry we will follow this with some degree of interest.