Labor wants probe into submarine costs

Tim Dornin
·2-min read

The federal opposition has asked the auditor-general to investigate cost blowouts with the program to build Australia's new fleet of submarines.

The program was originally costed at $50 billion and the federal government is expected to argue it remains the same, in 2016 dollars.

But defence officials told a Senate estimates hearing last month that the latest update put the cost at about $80 billion over the life of the project.

In a speech to the Submarines Institute of Australia on Tuesday, Labor defence spokesman Richard Marles will say hiding massive costs is unacceptable and the government should be upfront and honest about spending public money.

"This is precisely the kind of behaviour that destroys public trust and eats away at the public's confidence in those elected to represent them," Mr Marles will say.

"I have now written to the auditor-general to request an investigation into the failure by the government to disclose these vast cost increases.

"I have also asked the auditor-general to examine whether there are other instances of cost increases that have not been publicly disclosed."

Labor's concern came as the Naval Group revealed that more than 120 companies in Australia had applied to be high-level partners in the development and construction of the 12 submarines in Adelaide.

The company last month called for expressions of interest from local companies with the release of a local manufacturing package worth almost $900 million.

It is looking for local manufacturers to produce about 20 separate items of equipment including steering gear, weapons handling systems and the main shaft line.

Naval Group Australia chief executive John Davis said there had been an impressive response.

"Our local manufacturing package sent a clear message to Australian industry that we mean business," Mr Davis said.

"Australian manufacturers have shown in this response that they stand ready to step up and play their part in building submarines that will be critical for Australia's defence.

"The potential benefits for the nation from this program are immense and will last a generation."

A further 2000 Australian businesses have also registered to become part of the wider supply chain that will sustain the 50-year submarine construction program.

Naval Group Australia already employs almost 300 people in South Australia and expects that to grow to about 1700 direct jobs by 2028.