Standing up for Canberra

Shipbuilding Industry

I rise to support the motion moved by the member for Fremantle. The motion outlines the incredible importance of the shipbuilding industry in Australia and the critical need for the Abbott government to provide some certainty to this industry. As the member for Fremantle has noted, shipbuilding delivers some of the highest value and most complex manufacturing outcomes produced in Australia. This is a highly skilled, expert workforce and the Abbott government should be taking proactive steps to maintain its capacity for its very significant national economic and security benefits.

The shipbuilding industry as a whole employed more than 8,000 in 2012-13, with revenue of $2.8 billion. It is an industry at the cutting edge of innovation and technology. Let me quote from the IBISWorld industry report of October 2013 to show where analysts saw the industry when the present government was elected:

Industry revenue is forecast to increase by a compound annual rate of 2.8% over the next five years, with revenue forecast at $3.2 billion in 2018-19. Ongoing projects have been delayed, including the construction of the Hobart Class AWD and Canberra Class LHD ships, allowing for a more prolonged revenue source for industry players. These delays, along with the Federal Government proposing to bring forward the replacement of two RAN supply ships, look set to help avoid a debilitating extended gap— I repeat, 'a debilitating extended gap'— in projects that has been projected for 2015-16. The estimated $36 billion Collins Class replacement submarine project is expected to begin construction in 2017-18, with a significant revenue stimulus projected upon commencement.

This was the expectation of the industry and those who analyse the industry and it clearly shows two things: the Labor government had a solid plan to bridge the 'valley of death', and the Abbott government has reneged on its commitments to the Australian people that there would be a sufficient flow of projects to ensure that the Australian shipbuilding work force and industry would be able to maintain its accumulated skills. Let me repeat this crucial phrase from IBIS assessment:

… to help avoid a debilitating extended gap in projects.

The key word here is 'debilitating' because, rather than continue with Labor's commitment to bridge that valley of death, what the Abbott government has done since its election is to ensure that there is indeed a 'debilitating extended gap.'

In April of this year I was fortunate enough to visit Adelaide to meet with some representatives of the Australian defence industry and in particular to visit the ASC shipyards. I was impressed by how South Australia has developed a world-class maritime industrial precinct. The infrastructure and critical mass of warship design, systems integration and construction skills provide the perfect foundation for a long-term sustainable maritime sector. Successive Australian governments have invested billions to consolidate and maintain the nation's sovereign shipbuilding capability.

While in Adelaide I was concerned to learn that a number of key defence industry players are already planning to shed jobs as of this month. With no other opportunities in shipbuilding available, we know that workers will move to other industries and their capability will be lost from shipbuilding for good.

The collapse of Australia's shipyards would have very serious consequences for the nation's economy. At risk is a highly skilled and capable workforce and the nation's indigenous shipbuilding capability. We have paid a heavy premium to establish a worldclass shipbuilding industry in Australia. Now our shipbuilding industry needs security and consistency. The Abbott government's failure to provide this certainty, its broken promises, deferral of decisions and mixed messaging has plunged the industry into doubt and uncertainty.

The Abbott government must now accept that it has failed in its responsibilities and take immediate action to provide certainty to the Australian shipbuilding industry and to thousands of Australian workers by settling a short-, medium- and long-term program of government shipbuilding projects to ensure a balanced workflow and smooth delivery of key naval assets.

It is fundamental for the industry, for Australian jobs, for our capability and for our capacity for the future that we have an indigenous shipbuilding skill set here in this nation. I commend the motion to the House.

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