Defending WA’s share of defence

17 May, 2017

The Turnbull Government has released Australia’s first Naval Shipbuilding Plan, reigniting strong debate about the extent of WA’s role in the decades-long $90 billion program and whether the Henderson marine precinct needs more funding.

The plan, announced yesterday by Federal Defence Industry Minister Christopher Pyne, includes $1.3 billion in funding to upgrade the nation’s shipyards to build the next generation of patrol vessels, warships and submarines.

“This plan will ensure delivery of these modern defence capabilities set out in the 2016 Defence White Paper, creating thousands of jobs and securing the naval shipbuilding and sustainment industry for future generations of Australians,” Pyne said.

However, WA will receive only $100 million of the infrastructure funding – a fact known since February when the Federal Government said it would invest that amount in the State’s naval-related infrastructure and sustainment from 2017 to 2020.

Nevertheless, both sides of politics were happy to weigh into the debate about WA’s role in the national program, which is limited to construction of 10 offshore patrol vessels (valued at $3-4bn), 21 small pacific patrol boats ($306m), alongside long-term sustainment of naval vessels.

To put the political debate in context, sustainment and maintenance contracts can represent about 70 per cent of the total value of a naval program over its lifetime, and WA has positioned itself well to competitively tender for this.

While there is a political focus on where vessels are going to be built, sustainment and maintenance contracts ensure constant work and steady jobs across the defence supply chain.

The new major war vessels – frigates and submarines – will be built in South Australia, as will a naval shipbuilding college.

State Defence Issues Minister Paul Papalia argued WA had been “dudded” by the program, describing it as a slap in the face of the local defence industry.

"This is less of a ‘national’ shipbuilding plan and more of a ‘South Australian’ shipbuilding plan,” he said.

 “This State has the skills and experience to contribute to both the construction of the nine new future frigates and the 12 future submarines but this plan leaves WA in the cold.”

WA Liberal Senator Linda Reynolds, however, welcomed the plan’s recognition of the State’s industrial capabilities, saying that many WA companies have programs in place to retrain resources workers in a wide range of skills required for shipbuilding.

“There is also an opportunity for WA workers to support ship builds in South Australia, particularly in executive and management roles where shortages have been identified in this report,” she says.

CCI WA Chief Executive Deidre Willmott visited Osborne in South Australia this week, and says WA needs to be planning skills training, with a focus on encouraging young people to build careers in defence.

“There is still a concern that a future resources boom will see people leave the defence industry,” Willmott says.

“We must continue to leverage our skills and training in oil and gas and mining for defence industry, and dispel misconceptions on the East Coast that those resources industries pose a risk to the defence workforce.”

Willmott urged the State to engage with the Federal Government on the budgeted upgrades for WA, “to ensure we maximise future shipbuilding and maintenance work at Henderson”.

The Federal Government says the $100m investment, including wharves and jetties, will take place at Henderson and HMAS Stirling on Garden Island.

The specific funding areas will be decided after “infrastructure planning” to be carried out this year by maritime engineering and design consultant Odense Marine Technology, with construction due to start in the first half of next year.

Senator Reynolds says WA shipbuilders have always been export-focused, balancing commercial work with defence and government contracts.

“That’s why we’re in such a strong and stable position to grow and support future naval vessel construction.”

Reynolds did not name any companies but Austal has a long history of aluminium shipbuilding at Henderson while local construction company Civmec is seeking to expand into marine defence contracts.

Both are involved in the current bids by three European companies to design and build the new offshore patrol vessels.

And last month Civmec started building its $80 million Forgacs Marine and Defence facility – a cutting-edge manufacturing and maintenance shed that will be big enough to house frigates as well as patrol vessels.

In terms of public infrastructure, Reynolds says new funding of a second floating dock (a structure used to dry dock vessels) is needed for Henderson’s common user facility to enable WA industry to take advantage of future sustainment opportunities.

“The former Liberal State Government had already put forward a business case for the estimated $300 million floating dock and it’s ready to go,” she says.

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