AUKUS – Defence Industries Minister radio interviews

Following the AUKUS announcement in the United States on 14 March (Australian time), Defence Industries Minister Pat Conroy did a series of radio interviews, shedding more light on the grand plan to replace the Royal Australia Navy’s Collins-class submarines.

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14 March 2023

TRANSCRIPT 

INTERVIEW WITH TOM ELLIOT – 3AW DRIVE

 

TOM ELLIOTT:  The Minister for Defence Industry joins us. Pat Conroy, good afternoon.

 

MINISTER FOR DEFENCE INDUSTRY, THE HON PAT CONROY MP:  G’day, how are you?

 

ELLIOTT:  Well, I’m very well, thank you. Thank you for joining us. This project to buy not one but two classes of nuclear submarines, is this the single biggest thing that Defence has almost ever done?

 

CONROY:  Well, it’s certainly the single biggest thing Defence has ever done. Quite frankly, it’s the single biggest thing the country has ever done industrially. It surpasses the Snowy Mountains scheme and is on par with establishing the Australian motor industry. It will enhance our defence capability and create around 20,000 jobs. So, it’s a very big day for the country.

 

ELLIOTT:  No doubt. We had a caller on my colleague Neil Mitchell’s program this morning who said that he was, I think, a former submariner, and he said, look, he reckons we’d be better off buying, you know, 30 or 40 conventional subs off the plan versus the much smaller number of nuclear submarines we’re going to get. Did you weigh up a bigger fleet of conventional submarines versus a smaller fleet of nuclear boats?

 

CONROY:  Well, we weighed up the choices between conventional submarines and nuclear-powered submarines. And to be frank, what we’re asking our submarines to do in the late 2030s and 2040s you can only ask a nuclear-powered submarine to do it in terms of being able to survive in areas where conventional-powered submarines are very easy to detect because every few days they have to what’s called snort –

 

ELLIOTT:  Surface, yeah.

 

CONROY: – which means put up a mast and suck in air. So not only are nuclear-powered submarines more survivable because they can stay underwater for months on end. Literally, the only thing that limits them, the first thing that limits them is food, but, secondly, they’re able to go at higher speed basically all the time and they can carry a lot more weapons including vertically launched payloads, things like cruise missiles.

 

ELLIOTT:  Okay.

 

CONROY:  So, it’s a huge capability enhancement for the Australian Defence Force, for the navy in particular.

 

ELLIOTT:  Now, one of the weird things that might happen – I know we’re going to try and extend the life of the conventional Collins class submarines and we’re going to buy between three and five Virginia class nuclear submarines and then be part of this jointly developed future submarine with the UK and the US and us all building it together. There is a possibility, is there not, that there could be a few years where we actually have three classes of submarines serving concurrently? And if that’s true, won’t that be complicated?

 

CONROY:  There could be a very small number of years. So, there’s certainly going to be a number of years where we’ve got two classes of submarines. And that’s not unusual. For example, when the Collins class came into service, we were still operating the Oberon class submarines, the old O‑boats. Importantly – and this is one of the key de-risking things that we’ve done – all three classes will have the same combat systems.

 

So, the combat system on the Collins is a joint-developed combat system we have with the American navy. That’s already in service with the Virginia class and it will go into SSN AUKUS, the new submarine, as will the mark 48 heavy weight torpedos. So, there’s a lot of commonality between the Collins, the Virginia and then on to SSN AUKUS, and that’s really important. And, in fact, the Virginias and the SSN AUKUS will have a similar propulsion system, so similar nuclear reactors.

 

So, yes, there’s going to be a crossover, but it is something we can manage. And ultimately, it’s the price we have to pay for the 10 years of waste and changed decisions around what submarine to get. That’s why we’ve been forced to get Virginias before we get to the Australian-made submarine.

 

ELLIOTT:  Okay. Now, even with the Collins class, the smaller Collins class fleet we currently have, we often struggle to crew them. What are you going to do? If we’re going to have these bigger nuclear submarines and the whole bigger industry, what are you going to do to attract more people to become submariners?

 

CONROY:  Well, the Royal Australian Navy has launched a recruitment campaign right now. And we’ve got a new recruiter for the entire Australian Defence Force, Adecco, that’s putting a lot of resources into this. And probably the most important thing is we’re starting now recruiting people for this endeavour. We have Australian naval personnel right now on US and UK submarines and submarine courses. And, in fact, we’ve got Australians in the US nuclear training course and they’re in the top 30 per cent of students. So, we’ve started the recruitment process now, but we acknowledge obviously one of the greatest challenges is we need to find more sailors for these boats. There’s no denying that. But we’re starting right now, and we’ve got a bit of time and we’re going to work up towards it.

 

ELLIOTT:  One of our – probably our biggest economic trading partner is, of course, the People’s Republic of China. And the purchase and the development of these nuclear submarines is quite possibly aimed at Chinese, or at the Chinese. Is there a problem that China might react very badly to what we’re doing here?

 

CONROY:  Well, I’m not going to comment on any specific country. But I’ll make the point that we’ve engaged really seriously with a whole lot of countries and briefed them about why and how we’re making decisions. Between the Prime Minister, the Deputy Prime Minister, myself and the Foreign Minister we engaged with 60 countries ahead of the announcement. And ultimately, we have to acknowledge that there’s a regional arms race going on and we need to equip the ADF with the best capability we can get. And this is all about deterring any potential adversary and in that way contributing to peace and stability. Deterrence is really important because that deters anyone taking the risk of attacking another nation. And that’s why this capability is so important.

 

ELLIOTT:  Is there a slight risk with the amount of money that we’re spending – it is a colossal sum of money; I know, you know, some of it is decades down the track, but it’s still a lot of money – that we’re putting all of our eggs into one basket, because this defence project is so big that we sort of almost can’t tackle anything else in defence?

 

CONROY:  I don’t think that’s a fair characterisation. It’s a very significant sum of money; there’s no argument there. It will grow to on average 0.15 per cent of GDP. But that’s in the context of a defence budget that’s 2 per cent of GDP now and is growing to about 2.2 per cent of GDP over the decade. So that 0.15 per cent is in the context of a defence budget that is growing and will hit 2.2 per cent by the end of the decade.

 

So, it’s a very important capability, but we’re investing in our Joint Strike Fighters, investing in our Growler electronic attack aircraft, investing in a whole lot of capabilities to make sure that we’ve got a balanced ADF that really is regionally superior and able to provide that strong deterrence.

 

ELLIOTT:  In late 2021, I was at a private dinner where a then cabinet minister from the previous Morrison government said to me that one of the reasons they wanted to get nuclear submarines – they’d just abandoned the French Barracuda class for the nuclear class that hadn’t then been defined – but he said it was to get the case for civilian nuclear power established in Australia. Is that still a goal here? That if people get used to seeing a nuclear submarine in the odd port here and there that we might one day be able to have a nuclear reactor to reduce our emissions from generating electricity.

 

CONROY:  Well, it’s definitely not the position of the Albanese Labor government. We’re opposed to nuclear power for electricity production for the domestic industry. And, in fact, one of the pre-conditions that we made when we supported AUKUS and one the government of the day accepted was that this would not rely – this decision would not then rely on the development of a domestic nuclear power industry.

 

That’s really important, and that’s why the reactors are being provided to us welded and sealed shut by the United States and the United Kingdom. And they won’t need refuelling for the 30-year life on the submarine. The reactor will be fuelled for the life; we won’t need to touch it. And that’s really important because we’re opposed to a domestic nuclear industry for electricity production. It’s much more expensive than renewable energy firmed up with batteries and pumped hydro. We just don’t need it in this country. It’s very expensive and it will put up power prices.

 

ELLIOTT:  But it is better for submarines?

 

CONROY:  Well, it’s better for submarines because obviously, submarines are operating in a very confined environment. You can’t power a submarine with solar power or wind power obviously. The two classes of submarine out there are either battery-powered through diesel engines or nuclear-powered submarines. So, it’s entirely reasonable for submarines because you don’t have the benefit of having big solar farms connected to them.

 

ELLIOTT:  Ok. Final question. I’ve heard in the press releases a lot of talk about the benefits that Western Australia and South Australia are going to get over the coming decades with the submarine program, which is great for them. What will Victoria get out of this?

 

CONROY:  Well, there’ll be massive opportunities for Victorian industry. The 20,000 jobs that we’ve identified are mainly related to the industrial construction of the shipyards and then building the submarines and maintaining them and the ADF personnel and the scientists and technicians. But there will be a whole lot of Australian defence companies supplying parts and components not just to the Australian submarines but potentially the British submarines.

 

Just as the Collins submarine involved the supply chain across the country, so will these. I represent a seat in the Hunter Valley around Newcastle, and we built a critical part for the Collins class submarine even though they were assembled in Adelaide. And I imagine – well, not imagine, I’m certain that will be the case now that the very high-tech manufacturing and engineering industries in Melbourne will have a great shot of supplying parts to these submarines.

 

This really will be a national endeavour. As I said, this is the greatest industrial undertaking this country has ever attempted. The benefits and the challenges won’t just be limited to WA and SA; it will be a true national endeavour, including Victoria.

 

ELLIOTT:  Thank you so much for your time. Pat Conroy, the Minister for Defence Industry.

 

 

 

 

TRANSCRIPT

INTERVIEW WITH GARY ADSHEAD – 6PR MORNING SHOW

 

GARY ADSHEAD, HOST: The, as I said, eye-watering announcement, in terms of the cost – $368 billion is the price tag that’s been put at the top end of all of this –  AUKUS deal. To go through some of the issues, the Federal Defence Industries Minister Pat Conroy joins me on the line. Thanks very much for your time, Minister.

 

MINISTER OF DEFENCE INDUSTRY, THE HON PAT CONROY MP: Good morning, Gary. How are you?

 

ADSHEAD: I’m good. So many moving parts to this. Maybe, perhaps from your point of view, you can explain some of the time frames, because some people listening might think, gee, we got to wait till 2033 before we get one of these first Virginia class submarines delivered to us that we’re buying. And then, of course, way out to 2040s before we get our own homemade, British-designed nuclear subs.

 

CONROY: Yeah, the starting point for all this is that we have the excellent Collins class diesel-powered submarines in service at the moment. They’re reaching the end of their life and even with a life of type extension, they’ll start exiting service in the late 2030s. So, if we start from the end, which is building our own homegrown nuclear submarines, we will be starting work on that right now, this year. But the earliest we can get an Australian nuclear-built submarine, the SSN AUKUS, will be in the early 2040s. So, we’re faced with this very significant capability gap when we came into power of what do we do with submarines that had to be retired and how do we fill it before we have the ones that we’re building?

 

And that’s where striking this deal with the United States to acquire at least three and up to five Virginia class nuclear attack submarines really fills the capability gap and deals with the fact that for ten years we had chopping and changing about what submarine we were going to get. In the lead-up to that – and those submarines will start to be delivered in the early 2030s. In the lead-up to that, we obviously have to demonstrate to our partners and develop the skills to operate and maintain nuclear-powered submarines.

 

And that’s why, from this year, there will be increased visits to Western Australia and HMAS Stirling, in particular, of US Virginia class submarines. And the UK will increase their visits from 2026 and then in 2027, we will have a forward rotational force west, called Surf West, of four US nuclear attack submarines and one British Astute class submarine that will rotate through HMAS Stirling, where we will obviously develop the skills. We’ll have Australian sailors on them to some extent and we’ll be doing significant maintenance on them in Australia, at HMAS Stirling and Henderson to develop our skills. So, it’s really a three stage plan where at the end of this process, we have the ability to make nuclear-powered submarines in this country and through that, improve our defence capabilities, as well as generating around 20,000 jobs.

 

ADSHEAD: So, before the last federal election, of course, there was the announcement down there at Henderson of a $4.3 billion commitment for a submarine dry docking facility. Is that part of all of this?

 

CONROY: The dry dock was supposed to serve multiple purposes, including surface vessels. We’ve said we’ll announce the path forward for that when the government responds to the Defence Strategic Review, which is next month. Broadly, but importantly, as part of this announcement, we’re committing to spending $8 billion over the decade to upgrade the infrastructure around HMAS Stirling, including $1 billion over the next four years, to enable it to receive those nuclear submarines from the US and the UK. The visits and the rotation, and to be able to perform the maintenance on them. The dry dock will be a separate announcement later on.

 

ADSHEAD: Okay. Because obviously one of the discussions that’s being had now is how we’re going to pay for it. I know that certainly the Treasurer, Jim Chalmers, was asked where the savings are going to come this morning here in WA. I think that’s going to be revealed in the budget that he said. But can you give us any idea? You talk about possibly $3 billion cuts from Defence in order to make up for this?

 

CONROY: Well, what we’ve said is there’s $9 billion of cost over the forward estimates over the next four years. $6 billion will be offset from the money that was put aside for the French attack class. And we’ve said that the other $3 billion will be found by reprioritising projects within the Integrated Investment Program, which is the gigantic investment programme for Defence. We’ll announce that within the budget context of which projects have been reprioritised. That happens all the time, to be quite frank, and that’s something that we’ll manage through the Defence portfolio and as part of the Defence Strategic Review, which has identified projects that just make less strategic sense than they did previously. But we shouldn’t lose focus on the fact that this is a great day for Western Australia and a great day for Australia as a whole. This is a significant enhancement to our Defence capability and a massive jobs and investment boost to Western Australia.

 

ADSHEAD: What would you say to people listening who might think, well, now we are categorically a significant target, if Australia was to be drawn in some sort of conflict here in the Indo-Pacific. What do you say to West Australians? Because you well know that Garden Island is basically a causeway bridge away from the mainland.

 

CONROY: Well, what I’d say is we face the greatest strategic uncertainty since 1945 and we need to increase the ability to defend ourselves and to deter attacks on Australia. This is ultimately why we’re acquiring these submarines, is to promote peace and stability by the threat of inflicting more harm on anyone who might have negative intentions to us. So that’s really important – to point that out. We’ve already obviously got a large naval base at HMAS Stirling. We’ve already got shared facilities with the US. We’ve already got force rotation in Australia, for example, we have US Marines that rotate through Darwin every year. So, this is an additional obviously rotation of forces in the build up to us having our own sovereign nuclear submarine capability.

 

ADSHEAD: But do you think it escalates the chances of an arms race with China in relation to this? Because they’re not just going to sit back, are they? They’re going to get bigger and bigger. So, where’s the end game?

 

CONROY: Well, what I can say to you is that there’s a regional arms race that’s occurring already. There’s a regional arms race that is happening right now and we’re acquiring nuclear-powered submarines to increase our capability to defend our nation. The alternative is basically to sit on our hands and to have the Collins class submarines retire from service in late 2030s and either not replace them, or replace them with diesel powered submarines that, in our assessment and based on the best advice, will not be able to do the things we need them to do in the areas we need them to do them in. The only course of action for a responsible government is to invest in the defence and security of our nation. Because you’re absolutely right, there is a regional arms race going on already. We have an obligation to respond to that, to protect the people of Australia.

 

ADSHEAD: Can I ask you just as part of this, obviously here in Western Australia we talk about sort of Air Force capability as well and we don’t have the joint strike fighters here or any of them in Western Australia. In fact, we don’t have anything that could go out there and defend us from Western Australia right now. Because of all of this activity that will start to happen off Garden Island, is that the next step that we’re going to need to see that kind of level of Air Force protection as well?

 

CONROY: Well, the Defence Strategic Review, which has been handed to government provided a thorough analysis of what’s called ‘force posture’, which is where our force is based. So, you can expect us to address questions like the one you’ve just posed us when the government responds to the DSR and releases a public version of the DSR before the budget which is scheduled for early May. So, your question is really understandable, but you can expect the response as part of the DSR process.

 

ADSHEAD: Minster Conroy, thanks very much for joining us today. I appreciate your time on a busy day.

 

CONROY: Thanks, Gary. Have a great morning, bye.

 

ADSHEAD: That’s the Defence Industry’s Minister federally, Pat Conroy.

 

 

 

TRANSCRIPT

INTERVIEW WITH WARWICK LONG – ABC MELBOURNE DRIVE

 

WARWICK LONG: Pat Conroy is the Minister for Defence Industry and can join you now on the program. Pat Conroy, Welcome to Drive.

 

MINISTER FOR DEFENCE INDUSTRY, THE HON PAT CONROY MP: Thank you for having me.

 

LONG: Is it worth it?

 

CONROY: Absolutely. This is all about increasing the capability of the Royal Australian Navy. Nuclear-powered submarines are the most advanced naval capability in the world. They are the apex predator of the oceans, as someone has put it, and they will really give us the ability to do things that diesel power submarines can’t do. They can get to places we need them to get to and they can carry greater payloads of weapons, including vertically launched cruise missiles. So they really give us the ability to deter potential adversaries. And this is really what this is about, supporting peace and stability by deterring attacks on Australia. And that’s why today’s announcement is so important. It’s also the greatest ever industrial undertaking this country has ever attempted, surpassing the Snowy Mountains Hydro Scheme, for example. And that will help create 20,000 jobs, modernising Australian industry at the same time as delivering this critical capability to the Navy.

 

LONG: And that’s your part of the world here, isn’t it, Minister for Defence Industry? It’s going to take a lot of work to build these subs. We’re talking about hundreds of thousands of man-hours. I think if one person was working on it, it would take years, or multiple decades, to try and put a sub together. Just how much, in terms of labour, are you expecting to put into building these submarines?

 

CONROY: Well, we’re forecasting around 20,000 jobs across many activities, and that includes eight and a half thousand jobs building and maintaining the submarines. Importantly, that doesn’t include the tier one and two supplies, so the supply chain providing components, so we expect even more jobs out of that. But in the shipyard, actually, building the submarines is five and a half thousand jobs and that’s basically double what was forecast to build the attack class, the diesel class submarines, that the last government cancelled. So this is a huge industrial undertaking. And even more than the actual jobs is the modernisation, we’ll be needing thousands of scientists and engineers, advanced tradespeople, just as the Collins-class submarine construction modernised manufacturing in the early 90s, this will do the same for another generation of manufacturing. So it’s a nation-building announcement of epic proportions.

 

LONG: Are you prepared for it to blow out your budget? The subs could cost more than we expect, according to Associate Professor Maria Rost Rublee from Monash University. Here’s her speaking to us earlier today.

 

MARIA ROST RUBLEE: Anytime you have a new big Defence build, it’s going to be 50 per cent more. I mean, just look at the history of US big industrial projects. That’s the way it happens, because you have design flaws that you don’t know you have until you’re in the middle of it. And so 370 billion, the fact is, Australia’s Defence budget every year is 48 billion right now. There’s going to be an extra 15 billion on top. So it’s just something to be concerned about.

 

LONG: That was her speaking on this show earlier today. Do you think the submarine, the cost of the submarines ultimately is going to be more than what the sticker price is yet?

 

CONROY: I don’t believe so, because we’ve actually been very conservative in how we’ve approached the costings of this. We’ve included in the cost of this project many things that previous Defence projects haven’t included. For example, the cost of sustainment, which wasn’t in the attack class estimate of $90 billion, the cost of developing and upskilling the workforce, the infrastructure spend, the weapons and operations. And importantly, a very significant amount of contingency is already baked into the budget, recognising the high risks of this project. So I think we’re being conservative and importantly, we’ve made sensible decisions to de-risk the project. So, for example, the first SSN AUKUS that we will build in Adelaide, that’s due to hit the water in the early 2040s, that won’t be the first of type. The first of type will be built by the British in the mid-to-late 2030s and it’s conceivable that there’ll be maybe even two or three British submarines in the water before we finish ours first. So that will de-risk the project. And we’ve made sensible decisions, learning from experience with the Collins-class submarines to really make sure that we’ve taken a level headed approach to this.

 

LONG: And oh my you’re confident in terms of keeping the budget in tow, given the experience of Collins-class submarines and others in the past. I suppose then, just looking forward, do you think, you’ve described them as the apex predator of the ocean earlier, do you think that provides a significant deterrent to other nations in our area? Of course a lot of this discussion in this area is around China. Will the submarines alone be enough to shore up Australia’s borders?

 

CONROY: Well, I won’t reflect on individual countries, but I will say that we’re in the middle of a regional arms race. There is spending of historic proportions on re-equipping militaries in our region and we’ve been very clear with the Australian public that we face the greatest strategic uncertainty since 1945 and that demands increased capabilities for the Australian Defence Force. And this really is the critical capability in the naval sphere. It is something that potential adversaries worry about the most. And we really are confident that it will have the ability to project power, to put question marks in the mind of potential adversaries and really raise the cost of any potential action against Australia. And that’s really what this is about. These submarines aren’t about making war, they’re about deterring war by making the pain felt by potential adversaries that much greater. And that’s why they’re so important. That’s why the US and the United Kingdom are supporting us to acquire them, because they realise that we need to grow the industrial base of democracies of like-minded countries to support our values and to support our values around the globe.

 

LONG: Pat Conroy, thanks for having the time to join us.

 

CONROY: Thank you. Have a great afternoon.

 

LONG: Minister for Defence Industry Pat Conroy joining you there on the programme, talking up the sale or the purchase of submarines for Australia and what it means for our defence preparedness going forward.

 

 

 

TRANSCRIPT

INTERVIEW WITH NEIL BREEN – 4BC BRISBANE

 

NEIL BREEN: Okay, so the three countries, they made the significant announcement today that it’s happening, happening. And we’re going to get three to five subs that we can buy the Virginia Class subs off the United States to tide us over. We’re still not going to get them for several years. Then we’re going to build, over the course of 20 to 30 years, eight subs out of Adelaide. The whole thing will cost between $268 and $368 billion It’s the percentage of 0.15, our average GDP over the life of the program. Gee, I thought it would have been more than that, but then again, when you think of that, that’s a lot. Pat Conroy is the Federal Minister for Defence Industry. It’s a big portfolio. He would have had a busy day. Minister, thanks so much for your time on Brisbane Live.

 

CONROY: My pleasure.

 

BREEN: Minister, I think one of the questions today, and I think at this time, right at the moment, cost of living, interest rates, everything’s going up, inflation, people’s rents are through the roof. People are dissatisfied in Queensland about the waste the Labor Government has done on stupid things like Wellcamp and buying too many RAT tests they had to throw away and blindsided us with $7bn spends on Olympic Games that the public was never asked about. So, along comes the Federal Government and has to tell the public they’re going to spend $368bn. I don’t think they can see past the dollar figure. I’m not bagging the governments for doing this. I think we have to do it. But is the dollar figure going to be a hard sell for the Federal Government?

 

CONROY: We’ve put out there the GDP figure, the 0.15 per cent of GDP, because we think that’s a fairer and more accurate representation of the cost of what is a national effort. A national effort to get the most advanced submarines in the world as a key part of increasing the capability of the Australian Defence Force. It’s a very large sum of money, but it’s a big investment in our national security that will also deliver around 20,000 jobs and help modernise our manufacturing industries. So, yes, it’s a big figure. To your earlier point about cost of living, governments have to be able to do both. That’s why we’ve made significant announcements about easing the cost of living pressures through our electricity legislation, making child care cheaper, cutting the cost of medicines. But the first obligation of any national government is to protect its citizens. And that’s why we’ve made this announcement. It’s a big day, not just for our defence, but for our national effort. This truly will be the greatest ever industrial undertaking this country has ever attempted. Bigger than the Snowy Mountains Hydro. On par with establishing the auto industry. And it’s a big announcement and it’s really critical to our nation’s future.

 

BREEN: It is. It is. And I don’t want to get bogged down in a finance discussion here because I think we need to understand we have to spend this money, because behind the scenes, Minister, obviously there’s things the Australian public can’t be told. But, when the United States President has been working closely on this deal and today flies from Washington to San Diego. The United Kingdom Prime Minister, the UK Prime Minister Rishi Sunak flies all the way from London to go to San Diego. Our Prime Minister goes from India to San Diego. The three of them stand there together to talk about this AUKUS deal to make these subs. There’s obviously a threat from China, that the nations of the world are worried about that the public doesn’t have the full knowledge of. Am I right or wrong?

 

CONROY: Well, it’s certainly true that we face a regional arms race. We’re seeing very significant investment by many countries in our region, in their military. And we also face an environment that’s becoming increasingly hostile to diesel-powered submarines. And that’s why the Albanese Labor Government is making this decision and is making the investment in nuclear-powered, not nuclear-armed submarines to give us the capability to deter foreign aggressors. And you’re absolutely right. Obviously, I and other members of the government are privy to classified security briefings, pretty frank about our environment. We’ve been open with the fact that we face the greatest strategic uncertainty since World War II, and we need to take action to respond to that. And that’s why we make this national investment of acquiring a fleet of nuclear-powered submarines.

 

BREEN: It was a decision that was made before you came to government though. You’re just franking a decision that was made by the previous government.

 

CONROY: The support for the AUKUS announcement was bipartisan and we paid credit to Scott Morrison and Peter Dutton’s role in that. We’re not denying that, we’re not going to play politics on it, but obviously it’s our job to deliver it. And one of the big questions that hadn’t had an answer when we came to power was how to fill the interim capability gap. The submarines that are being built in Adelaide won’t come into service until the early 2040s. The Collins class submarines are retiring from the late 2030s. We had to solve the capability gap by getting a deal done on the Virginia class submarines and that’s the price we paid for ten years of chopping and changing on submarine acquisition under the last government.

 

BREEN: Okay, so the numbers are mind-boggling. I’m less mind boggled by the 368 or whatever the final number is than I am by, how can it take so long to build these subs? Like, okay, I’m 54, we’re not going to see one until I’m mid-70s and we’ll see the last one long before I’ve waived goodbye to everybody. And I’m long gone and long dead. Why does it take the better part of half a century to pull this off?

 

CONROY: Well, the truth is we’re basically having to build a nuclear power submarine construction industry from scratch. We’re starting right now on building the submarine construction yard at Adelaide to build the submarines and we’ll progress to start building the actual submarine by the end of the decade. But we have to build the workforce and the industrial capacity. That’s why, for example, we’re investing $6 billion over the next four years alone in just upskilling and training Australian workers and building the supply chain to do this. Importantly, 2042 broadly, the early 2040s is as early as we could get an Australian-made submarine into the water.

 

BREEN: Why didn’t we just get them to make them overseas and just sail on over?

 

CONROY: Well, there’s a couple of reasons why we’re not going down that path beyond the interim Virginia class. First, the Virginia class finishing the production line in the early 2040s, the US is finishing production of them so there isn’t a production line to buy them off other than the interim capability. And secondly, the essence of AUKUS is actually growing the industrial capability of all three countries.

At the end of this period, we want to be in a position where Australia, United States and United Kingdom have moved from three shipyards that can make nuclear-powered submarines, two in America and one in the UK, to four, with the fourth being in Adelaide. That’s about contributing to the industrial capacity of all four countries because the United Kingdom and the United States face significant supply chain choke points in their own production. So it’s not as if we can go to a showroom and just pick a nuclear submarine off the shelf. We, in the end, have to build them here to grow the capability of all three AUKUS partners. We’re doing it in a way that’s considered and sensible and structured. For example, our first AUKUS submarine will come on come into the water about half a decade after the first of the British AUKUS submarines. That means that they’ve taken a lot of the risk around the first of type prototype and that we’re coming behind with a submarine that’s a bit more proven that a new industry that we are establishing in this country can build. But those 20,000 jobs are tremendously exciting that will come out of this as well. This is the most advanced manufacturing being undertaking in the world today and we’re going to be part of it.

 

BREEN: Well, we can’t complain about manufacturing jobs leaving Australia when we’re doing a project like this. Minister, can I leave you with one last question?

 

CONROY: Sure.

 

BREEN: When this was first floated, Brisbane was mentioned as a possibility where we could build these subs and of course, it was always going to go to Adelaide. I’m not going to put on a stink about that. But the amazing thing was these are nuclear subs. Now in my lifetime, people have hung themselves off bridges as part of protests, not hung themselves, killed themselves, but straddled themselves off bridges, right to protest nuclear subs from overseas coming into our waters. Now, not one person in Australia has raised an objection to a nuclear sub being built here and being built here for the rest of time. Is it too much of a leap to suggest that in the future the Australian public is going to accept nuclear power, fullstop?

 

CONROY: I think that’s a leap, and it’s a leap for a couple of reasons. One of the key parts of this acquisition decision is that we’re getting the reactor sealed and welded shut from the United States and the United Kingdom with all the fuel there for the entire 30 years of the submarine’s life. So we don’t have to touch the reactor, which is really important. But the base fact about nuclear power for domestic electricity production is that it’s just too expensive. Renewable energy may be firmed up with pump hydro and batteries, so not by itself, but with that backup, that means it’s available 24/7, is infinitely cheaper than nuclear power. So even if you got past people’s safety concerns and people’s concerns about having one near them, it’s just more expensive than renewable energy made completely reliable. So I think that’s the key difference between what we’re getting with our nuclear-powered submarines, reactors that are sealed off shut that we don’t have to touch them, in a very confined environment under the sea, versus on land, where we’ve got great options like solar and wind that can produce electricity –

 

BREEN: One day.

 

CONROY: – With a nuclear power.

 

BREEN: Maybe one day. Defence Industry Minister Pat Conroy. Look, thanks so much for your time this afternoon and for your knowledge on the topic. I think it’s helped a lot of people understand it a bit better.

 

CONROY: My pleasure. Have a great afternoon.

 

15 March 2023

TRANSCRIPT 

INTERVIEW WITH GLEN BARTHOLOMEW – ABC NEWS RADIO

 

GLEN BARTHOLOMEW: Well, Acting Prime Minister and Defence Minister, Richard Marles, will be in Adelaide today signing a cooperation agreement outlining the AUKUS agreement that will see the construction of the country’s eight submarines. The extraordinary cost of the nuclear-powered sub program is already forcing the Federal Government to wrestle with some difficult budget choices – lots of questions about where the money for it will come from.

 

Meanwhile, China says it will lobby other countries to back its claim that Australia and its AUKUS submarine partners are breaching global rules on the spread of nuclear weapons. It’s been just over 24 hours since the historic plan was unveiled in San Diego, and reaction has been flowing thick and fast to say the least.

 

Let’s hear from the Government – Minister for Defence Industry, Pat Conroy. Minister, good morning.

 

MINISTER FOR DEFENCE INDUSTRY, PAT CONROY: Good morning, Glen. How are you?

 

BARTHOLOMEW: Not bad at all, sir. Between $268 and $368 billion to be spent over the next three decades. Some are predicting it could probably run higher than that. Where is that money going to come from?

 

CONROY: Well, that’s not the Government figure that we’re using. We think that the figure of 0.15 per cent of GDP is a more accurate measurement of what the cost is of this national undertaking. This is an incredibly important announcement. It is the greatest capability uplift the Australian Defence Force has ever seen. Its critical capability will really help deter potential adversaries and at the same time it will create 20,000 jobs and modernise Australian manufacturing.

 

So, it’s an incredibly important national effort. It’s the greatest industrial undertaking this country has ever attempted, surpassing the Snowy Mountains scheme, for example. And so, we’ve been very transparent with people about the costs involved with that. But those costs will be accounted for in the normal budgeting procedures over the next 30 years. So that’s very important for people to know.

 

BARTHOLOMEW: Let’s be transparent. Nothing’s probably more certain – and you know this better than most in your portfolio – than a blowout in costs for a major defence project. It’s happened time and time again. Why would this be any different?

 

CONROY: The two reasons I’m expressing confidence is, one, that the 0.15 per cent of GDP includes a very significant amount of contingency. You obviously only use contingency when you hit challenges, so it’s very important to note that the 0.15 per cent of GDP includes a significant amount of contingency that I can’t disclose for commercial in confidence reasons.

 

And the second reason is that we’ve learned the lessons from previous defence procurements, particularly the Collins class submarines, for example. There’ll be a dedicated agency whose one task is to deliver the submarines. Secondly, we will not be having an orphan fleet, and the challenges for the Collins class was that we were the only country running them and developing them. It was a very developmental project – we were designing and building an orphan class. And, thirdly, we won’t even be producing the first-of-type of SSN AUKUS; the United Kingdom will be building their submarines ahead of us.

 

And, in fact, the current planning is their first one will hit the water around half a decade before our first one. So, they’re really taking on the prototyping risks. And, as you know, Glen, the first-of-type of these projects is often most fraught with danger – or danger is the wrong word – most fraught with challenges and complexity. So, the fact that we don’t have that risk is very important.

 

BARTHOLOMEW: Others aren’t so optimistic, suggesting that perhaps we’d be looking more like a figure of two and a half upwards to closer to 3 per cent of GDP for our defence budget going forward. We’ll find out, I guess, soon enough as the years and decades roll around.

 

In the meantime, the Acting Prime Minister and Defence Minister, Richard Marles, is flagging changes within Defence to help cover the cost of a new fleet of nuclear submarines. He says there are other changes that can be made.

 

[Excerpt]

 

DEPUTY PRIME MINISTER, RICHARD MARLES: We are looking about ways in which we can make sure that our Defence Force is tailored to giving effect to the strategic posture that we need to take. And that does in some respects require more capability – the submarines being an example. But there are other areas where we don’t need quite the same capability as has been planned in the past.

 

[End excerpt]

 

BARTHOLOMEW: So where might the other defence cuts be? Has a decision be made on where they might occur, Pat Conroy?

 

CONROY: Well, we’ve flagged that over the forward estimates, over the next four years, this announcement will be cost neutral. It cost $9 billion over the next four years, $6 billion of which will be paid for by the remaining money from the Attack class French submarine, over the four years. And the other $3 billion will be found by reprioritising projects within the Defence Integrated Investment Program, which outlines all our investments over that period.

 

As the Deputy Prime Minister said, those projects will be announced during the budget process in a month’s time. They will be made public then. But it’s very important that people know that within the Defence portfolio projects are reprioritised all the time. Some are brought forward as their strategic importance becomes clearer – for example, I announced the acquisition of HIMARS mobile rocket systems earlier than planned in January. And other projects as they become less strategically important are either pushed backwards or cancelled. That’s normal. And that will be accounted for over the next few weeks.

 

BARTHOLOMEW: And that shift in priorities and what we do and don’t need will be reflected more broadly, I guess, in the Defence Force Review when it’s handed down in the coming weeks as well. It is all about a change in posture, a change in approach to keep anyone at a distance from Australia. So, some things that we’ve pursued in the past mightn’t be required in the future.

 

The Opposition has said that they would happily support some savings in the budget but don’t seem to want Defence to be part of that, the suggestion that we shouldn’t be cannibalising the Defence Force in the name of AUKUS. What’s your response to their position now?

 

CONROY: Well, Peter Dutton’s got no credibility on this he’s just trying to play pity politics. This is a Defence Minister who presided over 10 years of waste and inaction in the submarines. First, they were going to offshore the work to Japan then they were going to do it with the French, and then they cancelled the contract with the French, and now we’re dealing with the 10 years of delay which meant that we had a very significant capability gap with the Collins class retiring, which meant that we had to find the interim solution of acquiring the Virginia class submarines. So, the Opposition has zero credibility when it comes to the submarine announcement.

 

And as for his broader point, he’s just being incredibly hypocritical. To fund the project REDSPICE, which is a very important investment in the Australian Signals Directorate, he cancelled Defence projects including a $1.2 billion project for armed drones.

 

BARTHOLOMEW: All right.

 

CONROY: The SkyGuardian project. So, this is a guy who’s got no credibility in this area.

BARTHOLOMEW: All roads seem to lead to South Australia today and in the coming years for the construction of some of these boats. South Australian Senator Birmingham has questioned why the construction start date for the boats is 2040. And that’s been echoed by some South Australians as well. Why can’t this begin any earlier?

 

CONROY: Well, we’re starting construction as soon as possible. And, again, without being political about it, Senator Birmingham’s position is incredibly hypocritical. We are starting construction on the submarine yard this year. You have to build the yard before you can build the boats. We are recruiting workers right now to build the boats and we are intending to cut steel to start production by the end of the decade, which is the earliest we can start.

 

So, for Senator Birmingham to complain about this is like the arsonist complaining about how long it takes the fire brigade to get to the house he’s burnt down. This is 10 years of delay and inaction that his government when they were in power caused, and now he’s complaining about how long it’s taking for us to clean up the mess. The truth is we will create 20,000 jobs in this process. We will start the construction of submarines as soon as possible. And that will lead to eight and a half thousand direct jobs building and sustaining the submarines.

 

BARTHOLOMEW: And who’s going to do those jobs, Pat Conroy? Like many countries, Australia is famously experiencing workforce issues. We’ve got a big skill shortage in some of these crucial areas. How are you going to find enough people or entice young people of our own to study engineering and nuclear science and the like to the extent that you’ll need them?

 

CONROY: Well, we’re doing a novel thing, and that’s training Australians to do this rather than poaching people. And one of the announcements Deputy Prime Minister Marles and I will be making with the South Australian Premier today is further details about establishing a skills academy in South Australia that will actually recruit and train young Australians to work on this national endeavour. This is a huge opportunity. Apprentices starting their career today could work their entire life building these submarines, which is tremendously exciting.

 

So we know there’s a task ahead of us of training Australians. But we’re committed to that. And we’ve got a length of runway that will allow us to do that. We will start taking in apprentices and graduates over the coming months and will build that up over time.

 

BARTHOLOMEW: All right. Some people might end up working in transferring and disposal of nuclear waste. Part of the AUKUS deal is Australia has to dispose of its own nuclear waste and do it here in Australia. How are you going to manage that? Where will this waste be disposed of?

 

CONROY: Well, we made it clear that we will establish a process to identify the location over the next 12 months. We’ve been very clear that it will be on Defence land. That is a very important statement that people need to take some comfort from. We will take responsibility for disposing and storing of the reactor and associated nuclear waste.

 

BARTHOLOMEW: That could be Defence land that you own now or will acquire soon?

 

CONROY: One of those two options.

 

BARTHOLOMEW: All right.

 

CONROY: And, as I said, the process is over the next 12 months.

 

BARTHOLOMEW: Pat Conroy, lots to do; we’ll stay in touch. Thanks for joining us.

 

CONROY: Thanks, Glenn. Have a great morning. Bye-bye.

 

BARTHOLOMEW: Minister for Defence Industry, Pat Conroy, on some of the mechanics and the cost of that big AUKUS submarine project.


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Posted by Brian Hartigan

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