Joe Hockey rules out open tender for new submarines

TREASURER Joe Hockey has ruled out an open tender for the next-generation submarine fleet, as Defence declared it was not “realistic” to build new submarines in Australia before the Collins-class faces retirement in 2026.

2nd Dec 2014


TREASURER Joe Hockey has ruled out an open tender for the next-generation submarine fleet, as Defence declared it was not “realistic” to build new submarines in Australia before the Collins-class faces retirement in 2026.

Labor, the Greens and crossbench senators have amended a government bill to ensure there is a “limited tender process” with at least four bidders for the Future Submarine Project, which the Coalition previously indicated would be done in Adelaide.

The Defence Materiel Organisation, in a written response to a question posed at Senate estimates by independent Nick Xenophon, has claimed: “Twelve years is not a realistic timeframe for a domestic build of a new design.”

Mr Hockey, when asked about the Senate amendment, today declared the previous government had “run out of time” to hold an open process.

“Buying submarines is not like going down to the parking lot and buying a whole lot of cars,” Mr Hockey told ABC Radio.

“We don’t have time to go through a speculation process. We do not have time for people to suggest that they can build something that hasn’t been built.

“We don’t have time for that because Labor failed to make decisions.”

The government is seriously examining the Japanese Soryu-class submarine as a potential replacement to the existing Collins fleet. There has also been interest from European defence manufacturers.

Labor wants the government-owned shipbuilder ASC to build the new subs in South Australia.

Senator Xenophon accused the government of disregarding the evidence to parliament of two Australian shipbuilding experts, John White and Paul Greenfield, who claimed Australia could produce a domestic submarine within 12 years without a capability gap.

He said the Collins-class was built from a Swedish design over nine years between 1987 and 1996, and the Italians built a German-designed submarine over eight years between 1998 and 2006.

“The government is going against leading experts in the naval procurement and turning their backs on thousands of Australian workers, engineers and the skills and expertise they offer our country,” Senator Xenophon said.

The tender process amendment, proposed by Labor senator Stephen Conroy, has been tacked onto the government’s Omnibus Repeal Day (Spring) Bill, which repeals 26 red-tape measures across nine portfolios with a compliance cost saving of $1.4 million.

The amended bill would need the endorsement of the House of Representatives, where the government wields a healthy majority.

The government lashed out at the move, accusing Labor of orchestrating a blatant political stunt that was intended to disrupt and frustrate its urgent legislative agenda.

“That is not the responsible path for decision making in this country,” parliamentary secretary Simon Birmingham told parliament earlier today.

APDR at a glance