Senator the Hon Mathias Cormann

CHRISTOPHER PYNE: Thank you all very much for coming down to Osborne today for this really momentous and important sod turning ceremony. The beginning of a $530 million investment in infrastructure just for the shipyard at Osborne South. A new shipyard for the future frigates that will dwarf the buildings that we see behind us. What has been behind us for some time will serve the Offshore Patrol Vessels. But the new infrastructure will be three or four times the size and that really speaks to the scale of the naval shipbuilding enterprise that the Turnbull Government has been committed to. A national enterprise that includes Henderson, where my colleague Mathias Cormann represents and of course here at Osborne. It is a great pleasure to have Mathias here, the Minister for Finance. We are the joint shareholders in Australian Naval Infrastructure. Australian Naval Infrastructure will manage this property so that the winners of the future frigates, the winners of the Offshore Patrol tenders will be able to come in and out and do their job without having to worry about any other parties dealing with them other than Australian Naval Infrastructure. It is an exciting day. 2,800 jobs in future frigates alone, filling in Labor’s valley of death. This infrastructure itself will help to ensure the valley of death that Labor left us is as short as possible. We will be making other announcements over the months ahead about how we intend to keep the workforce intact, because we are not trying to reduce the workforce. We need 5,000 Australians working here at Osborne North and South by the mid-2020s if we are going to deliver 12 submarines, nine future frigates and two Offshore Patrol Vessels.

QUESTION: Minister you mentioned there also the submarines ships are going to be quite substantially bigger again. Do we know yet how that infrastructure will be managed is there going to be taxpayer infrastructure like this or is that something the French are going to have a stake in?

CHRISTOPHER PYNE: It is quite a different project. So the future frigates and the Offshore Patrol Vessels, the winners of those bids could be different consortia and companies. So the Australian Naval Infrastructure is designed to be if you like, a third party that is removed from any commercial friction that might be between those various bidders. That is Osborne South. Osborne North Naval Group, which of course have won the bid, won the right to build and design the 12 submarines, they will manage Osborne North. They will design and build the infrastructure and the $500 plus million of investment in that will be taxpayer funded money as part of the contract for Naval Group to design and build the infrastructure at Osborne North.

QUESTION: In terms of what this legacy will be left after these warships are built here, are you hoping that you will have the infrastructure here still taxpayer owned to sustain an ongoing shipbuilding industry into the decades beyond the [inaudible]?

CHRISTOPHER PYNE: Absolutely Nick. Mathias might like to comment on this as well. The whole purpose of the Turnbull Government’s commitment to our continuous naval shipbuilding industry is that this is a 100 year project. We are at the beginning of it. It will last well beyond this Government and Mathias’ and my service as Cabinet Ministers and almost everybody here providing jobs and investment in our state and in Western Australia for many decades to come. The promise that we made in the election was that the infrastructure would remain in the hands of the Australian Government, the Australian taxpayer. That has not changed.

MATHIAS CORMANN: That is exactly right. This infrastructure will underpin our continuous Naval shipbuilding program for many, many decades to come and indeed for the next 100 years. This is about the Government owning the infrastructure which will then enable whoever the successful bidder is in relation to any particular contract to build ships to use this infrastructure in order to ensure that we have the naval capability that we need.

QUESTION: The Australian shipbuilders have been pretty clear in signalling to the Government that they would like to maximise Australian involvement in that process. Can you update us as to where you are at in terms of decision making and whether you will be giving favourable preferences to bids that involve or that maximise the involvement of Australian companies?

CHRISTOPHER PYNE: Well there is a tender process for the Offshore Patrol Vessels and the future frigates. The Offshore Patrol Vessels are nearing their end. The bidders are companies like ASC Civmec who have a joint bid. Austal of course and those two Australian companies have partnered with Damen Lürssen and Fassmer, three designers of Offshore Patrol Vessels. There are three bidders for the future frigates, Navantia and Fincantieri and BAE. It is expected that they will work and maximise Australian industry content. Of course, you can’t actually transport this infrastructure to another country and build the frigates. The frigates will be built here in Australia and the three bidders, without wanting to prejudice the tender, will of course be maximising their Australian industry content in exactly the same way as Rheinmetall and BAE are maximising Australian industry content for the combat reconnaissance vehicles. The Government has a policy of spending as much of the defence industry dollar as possible here in Australia, remembering that capability is still the number one priority, the number two priority is maximising that heft here in Australia, so any sensible bidder will be maximising their Australian industry content.

QUESTION: Can you just outline, with local jobs being such a contentious issue, how many jobs in construction are in this, and when we will start seeing these jobs come on board?

CHRISTOPHER PYNE: We are starting to see those jobs come online now. But within about two or three months there will be substantial construction work happening here, on the site that we are standing on. We are talking hundreds of jobs. One of the things that I am trying to do over the course of the next couple of years, before the offshore patrol vehicles get into full swing and then the future frigates, is find ways to keep the workforce intact. Obviously, there are about a thousand or so workers here at Osborne. We want all of those people to transfer across to the offshore patrol vessels, the future frigates and of course, potentially the submarines. We need at least those 1,000, we need 5,000 by 2020, so those politicians with very narrow focuses and low horizons, who want to complain about the workforce and people losing their jobs, simply do not understand. It is not that we are trying to reduce the workforce, we are trying to increase it fivefold. So yes, construction will help keep some of those people intact, the offshore patrol vessels will keep them intact, the naval shipbuilding college will mean that we can retrain quite a few of the workers here at the ASC to keep them as part of this project for the next twelve months or so, before the offshore patrol vessels begin. There is about 400 plus jobs at least to the offshore patrol vessels. Then of course with the future frigates it is about 2,800 jobs.

QUESTION: So just in, some public comments in relation to this is fears that these are just construction jobs at the start. You are suggesting that these are going to be transferable skills, in just the building?

CHRISTOPHER PYNE: Shipbuilding is not, has quite a close relationship with construction and a lot of the skills are the same. Steel fabrication, fitting and turning, obviously welding. So there are synergies and I think that a lot of the ASC workers and the workers from Holden for that matter, will be more than happy to work in construction for a year or two,  while before the offshore patrol vessels and the future frigates really get into full swing.

QUESTION: Minister Cormann, can I ask you about your speech last night? Labor says it was ‘Reds Under the Bed’ rhetoric and designed to distract from the citizenship dramas. Is that a fair summation?

MATHIAS CORMANN: The speech last night was about setting out the future choices that Australians have in front of us. Labor, Bill Shorten is pursuing a socialist, anti-success, anti-aspiration, anti-opportunity agenda which would lead to inferior outcomes for all Australians. It would lead to fewer jobs and lower wages. People need to understand that when Bill Shorten is sneering at successful Australians, when he is sneering at millionaires by proposing to permanently increase taxes for Australians earning more than $180,000 a year, he is attacking the middle class. He is attacking aspiration. He is attacking those Australians who want to get ahead. The Turnbull Government wants Australians to have the best possible opportunity to succeed. We want Australians to have the best possible opportunity to be successful. In order to achieve that we need to encourage, reward and incentivise aspiration and success. That is going to be a very important debate for us to have about the future direction of our country. It is a debate that will take place all the way to the next election in two years’ time. I am not surprised that Labor has reacted the way they have. The truth hurts. Bill Shorten is proposing to take Australia down the wrong path because he believes that the politics will work for him. He believes that people across Australia have forgotten the historical failures of socialism. His rhetoric, borrowing from Bernie Sanders in the United States and Jeremy Corbyn in the United Kingdom, is socialist rhetoric. His policy prescriptions of higher taxes and going after successful people across Australia are socialist policies. I do not take any step backwards.

CHRISTOPHER PYNE: Hear hear.