By Brent Clark

The Morrison Government fundamentally changed the approach to Australia’s submarine acquisition with the announcement that the Government would be terminating the Naval Group contract for twelve conventionally powered submarines and that there would be a period of up to eighteen months consultation with the US and UK Governments on Australia’s ambitions to acquire eight nuclear powered submarines.

It is important to understand that the Government has not decided on anything other than terminating one contract and commencing a dialogue with two countries to understand the how Australia could best obtain / buy / build the nuclear-powered submarines without breaching the Nuclear Non-Proliferation Treaty.

Apart from a line in the PM’s announcement stating that ‘the Government’s intention is to build the nuclear-powered submarines in Australia (at Osborne), maximising the use of Australian workers’ there is no other mention of Australian Industry, or even the acknowledgment that Australian Industry will be included. Prime Minister Morrison acknowledges the loss of jobs of Naval Group, and he makes mention that workers from Naval Group will not be lost to the enterprise.

There is no mention of the loss of work to the Australian subcontractors to Naval. There is no mention of ensuring that Australian Industry will be supported so that it remains viable to take a role (if any) in this new program. The Prime Minister has so far failed to acknowledge the large investment undertaken by hundreds of Australian companies, an investment they were encouraged to make by Government, Defence and Naval Group.

The change in strategic circumstances that we as a nation now find ourselves in warrants a robust and comprehensive discussion on national industrial resilience. We need to ask the question; What is it that we need as a nation to ensure that we can do what we want to do independently to ensure the Defence of Australia.

One of the planks to ensure national resilience must be a sovereign industrial capability. The COVID 19 pandemic exposed Australia to the reality that our supply chains were controlled by foreign governments, foreign corporations, or a combination of the two. Australia as a nation was exposed to other nations requirements. As an example, Italy denied the export of vaccines to Australia as it had a need for its own citizens to be vaccinated. Access to Personal Protection Equipment was difficult and not resolved until Australian companies began to produce the equipment. If we do not have the ability in-country to ensure that our defence equipment is, serviceable, maintainable, and therefore useable, we simply do not have a sovereign operational capability. If our future submarines, ships, aircraft, and vehicles cannot operate then they are of no use to the nation.

The Government has announced several independent areas of focus for a sovereign industrial capability. The new Strategic Direction afforded by AUKUS requires that those capabilities be rigorously reviewed and expanded to ensure the greatest possible degree of self-reliance.

Presently, some commentators are calling for the construction of the future submarines to be done offshore to bring a capability to Australia as soon as possible to meet Australia’s changed strategic circumstances.

We have seen commentary from the UK that they expect this to be a modified (British) Astute class submarine, indeed as recently as the 6 October the British Defence Secretary expressed his ‘confidence’ that the submarines would be built in the UK.

It is vital that the Australian Government make its intentions for Australian Industry involvement clearly and quickly known. We do not need foreign politicians pre-determining Australia’s sovereignty.

As of today, we have no idea of how Australia intends to proceed with the move towards nuclear submarines. The Governments nuclear submarine task force has eighteen months to develop options and recommend a path forward, so it is premature and fundamentally incorrect to be saying that the inclusion of Australian industry cannot be justified.

What we need Government and those involved in this process to ensure is that the access to intellectual property, the access to technical data, the access to the knowledge and the technical know-how and know-why are commercially guaranteed.

Government has consistently said that it wants to create a sovereign and sustainable industrial base within Australian, and this desire is exactly what Australia needs to do in these uncertain strategic times.

To achieve a sovereign industrial capability, it is important to ensure the involvement of Australian Industry at every opportunity in defence acquisition and in the sustainment phase of these programs.

What Australian Industry needs is leadership from the Government to ensure that Australia can create this nationally important capability.

Where we don’t have a capability then strategic and value for money assessments need to be undertaken to determine whether we should create the capability indigenously or ensure that there is a mutually beneficial creation of an industry using an overseas partner.

The Federal Government in conjunction with the State and Territories Governments, needs to invest in the infrastructure and training, to create this industrial capability within Australia, on an enduring and sustainable basis. The exact mechanisms need to be worked out. The levels of contracting and direct investment need to be established.

This is a multi-generational program that must be locked in to prevent future tinkering and disembowelling of the sovereign industrial capability.

Australia needs to build upon our innovative culture within our industrial base. The full enterprise needs to incorporate all levels of education to achieve the workforce and capability to achieve a successful outcome for Australia. By combining both the industrial and education sectors Australia would be able to achieve the same types of successes that countries such as Sweden, Israel and South Korea have.

To create this outcome there ultimately needs to be politic will and vision. If we do not commit to this undertaking, then individuals like the British Defence Secretary are allowed to make the type of statements that were reported on 6 October in effect making announcements about the acquisition of Australian equipment. This statement from a foreign government should alarm all of us, if left unchallenged then industry can only draw the inevitable conclusion that we are surrendering our sovereignty.

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