Submarine debate: Labor accuses Commonwealth of gagging ASC on local building costs
The South Australian Government has accused the Commonwealth of "gagging" the Australian Submarine Corporation (ASC) over the cost of building submarines locally.
ASC general manager Stuart Wiley yesterday told a Senate estimates hearing it would cost between $18 billion and $24 billion to build 12 submarines in Adelaide.
This is far short of the $80 billion figure the Federal Government has suggested it would cost in its argument to build the next fleet offshore.
Mr Wiley worked as an engineer in construction and maintenance for Australia's Collins Class submarines for about 25 years.
When he was asked how he reached his figures, Federal Finance Minister Mathias Cormann intervened, took the question on notice, and did not allow him to answer.
In a statement today, Mr Cormann defended his actions because the questions were "hypothetical in nature" and information provided to the committee had to be "relevant" and "accurate".
"And, where appropriate, properly assessed to ensure it does not interfere with commercial-in-confidence, national security and other public interest related considerations," he said.
South Australian Defence Industries Minister Martin Hamilton-Smith said the Federal Government was "gagging" the ASC.
"I think yesterday's evidence could only leave South Australians and Australians, and particularly the defence industry, shipbuilders and workers themselves, wondering what on earth is going on within the Government," he said.
"When our own shipbuilder says we can build the submarines for $18 to $24 billion, we should be listening."
Government figures under question
Federal senator and committee member Penny Wong told ABC 891 Adelaide that she further asked Mr Wiley how the Government came up with its own figures of $80 billion.
"He said he had no idea," she said.
"These sorts of figures are bandied about by the Government because they're trying to walk away from the very clear commitment they gave: 'We would build submarines in Adelaide'."
Senator Wong said the Government had not made public the submarine specifications it had for the next fleet.
"It's concentrated instead on denigrating the Australian workforce, the ASC, and on justifying why it had to walk away from its promises rather than telling people what its needs really were," she said.
Federal Defence Minister David Johnston mocked the figures put forward by Mr Wiley and questioned Mr Wiley's knowledge.
"The guy's a fascinating submarine sustainer but I'm not sure he's built too many himself," he said.
Mr Johnston said ASC's Osborn facilities at Port Adelaide had been sustaining the Collins submarines, which he described as an "orphan" in their design and unlike any other in the world.
"Any changes that are required, or maintenance, have to be done by us, and it's very expensive," he said.
"The fact is, there's no off the shelf solution (for the next submarine fleet), so we need to engage a partner who has design, skill and experience."
Mr Johnston said if the submarines were built in Australia and one was produced every two years, inflation had to be factored into the dollar per value at the end of the program.
"That meant an upfront acquisition cost of about $40 billion is going to play out to something like $80 billion over the term of the program," he said.
