Abbott Government to spend $20 billion on Japanese submarines

Some sense at last.  Home built subs have been a disaster



THE next generation of Australian submarines is all but certain to be built in Japan, in a major blow to SA’s defence industry, as Prime Minister Tony Abbott confirms the decision will not be based on “regional policy”.

In one of the biggest and most contentious defence equipment decisions in decades, the Abbott Government will select the Japanese-built Soryu Class submarine to replace locally-built Collins Class boats as the navy’s key strike weapon for operational use beyond 2030.

While both German and French submarines officially remain in the running, senior sources told The Advertiser that the Japanese option would be chosen.

A formal decision to spend more than $20 billion on up to 10 of the Japanese vessels will be announced before the end of the year.

Mr Abbott told a press conference this morning that Australian work on the submarines would be centred in Adelaide.

But he said the government’s decision would be based on defence requirements and value-for-money.

“The most important thing is to get the best and most capable submarines at a reasonable price to the Australian taxpayer — as I’ve stressed all along,’’ Mr Abbott said.

“We should make decisions based on defence requirements, not on the basis of industry policy, on the basis of regional policy.’’

Mr Abbott said the government had yet to make final decisions on the replacement for the ageing Collins class submarines.

“I can confirm what we’ve said all along: the Australian work on the submarines will be centred on the South Australian shipyards in Adelaide,’’ he said.

“Now the precise nature of how we are going to do our next generation of submarines is still subject to a whole range of further decisions.’’

There have been strong indications in recent weeks that the Abbott Government would break its pre-election commitment to build 12 next generation submarines in Adelaide, which would have cost about $36 billion and guaranteed thousands of jobs in the defence sector.

This followed a visit by a Japanese delegation, which was believed to include representatives from the industry giant Kawasaki Shipbuilding as well as the Japanese Government, visiting Osborne and shipbuilder ASC’s base in Western Australia.

“Defence acquisitions have to be made on the basis of defence logic, not industry policy, not regional policy but on the basis of sound defence policy,” Mr Abbott said in a speech at the SA Liberal Party annual general meeting.

“I have to stress we have not yet made a final decision on the design and build on the next generation of Australian submarines but there will be more of them.

“The bulk of the Australian work will be done in Adelaide and that means more jobs for SA.”  He said the next generation of submarines would create a “massive amount of work” in Adelaide.

The move to buy the subs offshore is likely to cost the state thousands of jobs, with the defence industry hoping the submarine build would provide work beyond the construction phase of the Air Warfare Destroyers, which is set to finish in 2017 when the third ship is scheduled to be delivered.

The decision to buy the subs from Japan is being fast-tracked due to growing concerns about the massive cost of maintaining the Collins class submarines beyond their use-by-date of 2026. Some estimates put that cost at more than $2 billion.

“The Government cannot afford a submarine capability gap and every day past 2026-27 when Collins class is due to begin decommissioning, adds days of risk,’’ a senior defence source said.

The Collins class subs, which were built at Osborne, have been plagued with problems.

One insider told The Advertiser: “It is ludicrous to think we can design a submarine — nobody believes that.”

The 4200-tonne Soryu class boat carries a crew of 65 and is powered by an air-independent propulsion system that allows it to remain submerged for much longer periods that other conventionally powered submarines.

Range has been a major factor against the design — the Soryu has a range of about 11,000km at 12km/h compared with 22,000km at 19km/h for the Collins class — but it is understood that one option under consideration is to provide submarine basing facilities in Darwin to cut the transit distances to the boats’ patrol areas by thousands of kilometres.

It is expected that ASC will continue to perform submarine maintenance locally and will play a key role in the future frigate project with work estimated at $1 billion a year flowing to South Australia by 2023.

However, the shipyard’s woeful performance on the Air Warfare Destroyer project has left the Government with little option but to look elsewhere for a new submarine.

“With a record like that, is anyone seriously thinking we should proceed and build a fleet of future submarines in the same shipyard?” a government source said.

The Advertiser can also reveal that when the Commonwealth signed up to the AWD contract, it was informed by Treasury that the project would cost $1 billion more than expected.

According to government auditors, the extra cost to build the submarines locally would be about 30 per cent or $15 billion.

That is the entire cost of the Joint Strike Fighter project.

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More corruption in the NSW ALP

"There's one thing I want at the end of this. I want him gone," Jodi McKay said, referring to her demand that former NSW treasurer Eric Roozendaal be expelled from the Labor Party.

"I don't want to belong to a party that has Roozendaal in it," she said.

The ALP has been rocked by revelations at the Independent Commission Against Corruption that two senior Labor powerbrokers, Mr Roozendaal and Joe Tripodi, did the bidding of then mining tycoon Nathan Tinkler to blacken Ms McKay's reputation and undermine her as she fought to hold on to the seat of Newcastle in the March 2011 state election.

For 10 months after her election defeat, Ms McKay, 45, was unemployed. During that time the former TV anchor applied for 200 jobs but "no one would employ me because I had been part of a government that people thought badly of".

At present she lives in the inner west suburb of Ashfield and works as communications director for Family Planning NSW.

Mr Tripodi, who has previously found to be corrupt by ICAC, has already been expelled from the Labor Party.

Ms McKay wept in the witness box when it was revealed to her that Mr Tripodi was behind a "dirty tricks" campaign which was being bankrolled by Mr Tinkler, whose bribery attempts Ms McKay had rebuffed.

In other evidence, it was revealed that Mr Roozendaal repeatedly ignored the advice of his staff and Treasury officials as he pushed ahead to support Mr Tinkler's development plans for a coal loader.

Both he and Mr Tripodi stand accused of leaking a highly confidential Treasury document to the Newcastle Herald, which was aimed at undermining Ms McKay and breathing life into Mr Tinkler's push for the coal loader.

"I felt like I had been run out of town," said Ms McKay, recalling that wretched period in her life. "I left Newcastle because I couldn't live there any more, my reputation was so badly frayed ... I just felt so humiliated and ashamed."

Ms McKay  was surprised when ICAC investigators contacted her earlier this year, saying: "You know those files you gave us three years ago – do you still have them?"

She had alerted them to a series of strange events, including an allegation that the mining tycoon had offered her a bribe, leading up to the election. But the commission didn't pursue the matter and returned the documents to Ms McKay, who destroyed them, telling herself she needed to move on.

At the time the now financially-embarrassed Mr Tinkler was Newcastle's favourite son. He had bought the Newcastle Jets and was finalising his "rescue" of the Newcastle Knights.

But blocking his path to further riches was Ms McKay, who repeatedly rebuffed his attempts to get a coal loader in an area in Mayfield zoned light industrial. Mr Tinkler offered to support her re-election campaign, but she reminded him he was a developer and therefore a banned donor since the laws had been changed in 2009. "His immediate reply was 'I have hundreds of employees and I can get around the rules,' " she told the commission in May.

Text messages between Mr Tinkler and his business associate Darren Williams used the code word "carpet" for the plan they hatched to get rid of  her.

"You OK mate if we get some more carpet?" Mr  Williams texted to Mr Tinker. "You want her gone don't you? 50 [thousand]."

"Generosity starting to get tested but yeah whatever it takes," Mr Tinkler fired back.

 Ms McKay said she had suspected Mr Tripodi's involvement but she was still gutted by "the treachery, the absolute betrayal".

As it turned out, the Liberal Party had no ethical concerns about accepting Mr Tinkler's money. The shadowy Canberra-based Free Enterprise Foundation was used to launder the coal mogul's illegal donation of $35,000 and reroute it back for the campaign of Tim Owen in Newcastle.

His campaign awash with illegal donations, Mr Owen narrowly won the seat. He has since resigned from Parliament after revelations aired at ICAC that he had no qualms in accepting banned donations, including $10,000 in cash from a property developer

After her day of high drama in the witness box, Ms McKay said that "I always believed that I would one day find out what happened. And I can now move on! [laughs] And never go back to politics".

Having had time to reflect, she no longer rules out a possible return to politics. "I would love to be back in there because that is the way you make things happen," she said.

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Public service graduate jobs slashed, but young march in continues

The march of younger, and cheaper, bureaucrats into the public service will continue in 2015 as middle managers file out.

New data shows many government agencies' graduate programs have weathered the razor gang's storm.

But some departments have halved or stopped altogether their public service graduate intakes as Public Service Minister Eric Abetz enforces a strict cap on the 2015 intake.

Main departments, such as Finance, Industry, Human Services and the Treasury, have been allowed to usher in as many or even more grads than they did this year.

Treasury secretary Martin Parkinson may have thrown his whole department through a vicious "spill-and-fill" in July, but a spokesperson confirmed the Treausury would take on 30 graduates next year - up from 29 this year.

In a scheme excluding the 35 recently shown the door, the spokesperson said taking on grads was "an important element of Treasury's strategic workforce plan to ensure the department does not develop significant capability and capacity gaps into the future".

The Finance Department will also make 30 offers for 2015, up from the 25 who started this year.

Industry will employ the same number it did last year - a healthy 39 graduates - and Human Services will offer jobs to 100 grads after taking on 101 this year.

The Employment Department's intake is also up and will make 29 offers after employing 23 this year.

Senator Abetz said the move was about the sustainability of the service and "ensuring renewal".

He said "the government's interim APS recruitment guidelines did include exceptions so that APS agencies could recruit graduates".

However, other highly sought-after graduate programs, which receive thousands of applications, have not escaped the chopping block.

The Department of the Prime Minister and Cabinet will take just 15 employees compared with last year's 32.

The Department of Foreign Affairs and Trade will take on 42, down from 43 last year.

In bad news for ballot boffins, the Australian Electoral Commission has cut its grad program entirely for 2015 after taking on five grads in 2014.

As senior staff at the Australian Taxation Office warn that the younger profile of workers is making it harder for the agency to crack down on transnational tax avoidance, the ATO is cutting its grad program by 14 per cent in 2015.

Two-hundred will be offered jobs at the agency, down from last year's 230 graduates.

In line with the wider cuts, the Australian Bureau of Statistics is cutting back its program, taking on just 40 graduates this year compared with last year's 53.

The Australian Competition and Consumer Commission's numbers are down by three to just 10 offers for 2015 after employing 13 this year, and ASIC is down to 16 offers after giving 20 grad jobs in 2014.

The number of grad jobs at the Attorney-General's Department remains a mystery after a spokesperson refused to reveal its numbers for 2015, saying the department was offering jobs in line with the new cap agreed to by the government.

The Agriculture Department was similar, simply saying it would be offering jobs in line with the cap.

Some, like the Fair Work Ombudsman, have revealed they have not yet even decided on how many grads they would be taking on.

The Education Department also says it is yet to finalise graduate staffing levels, despite releasing some offers.

Since the agency will be soon be folded into the Immigration Department, a spokesperson from the Customs and Border Protection Service said it was still "finalising" its recruitment process.

Hits on grads are nothing new. In February, 38 university graduates were dumped before they even started in the public service when the AusAID graduate program was scrapped.

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Furious foreign pace but PM nails it

TONY Abbott could not be more different — in temperament, style and political philosophy — from Kevin Rudd. But there is one striking similarity, a tremendous drive for work, as the Prime Minister’s just concluded trip to India and Malaysia amply demonstrates.

Abbott and his staff were away for four nights. One of them was spent in a hotel, three in the ageing, breakdown-prone VIP jet.

Abbott and his staff left Canberra last Wednesday night, flew all night and worked all day Thursday in Mumbai. One night’s luxury of a sleep in a hotel bed was followed by a day of work in Delhi. After dinner with the Indian Prime Minister, Narendra Modi, the PM’s party flew overnight to Malaysia.

There they worked all day Saturday in Kuala Lumpur and flew overnight back to a day of busy engagements in Sydney yesterday. It is a schedule that drives human work performance to the very edge of the reasonable.

Abbott, unlike Rudd, is supremely physically fit, but it’s too much, as was evident from his cold and in his froggy voice yesterday. An important difference with Rudd is that, when tired, he doesn’t get angry or abusive with his staff. But all human beings are much more likely to make a mistake when stretched too tight. A single mistake on a trip like this can turn ­triumph to disaster in the twinkling of an eye. There were no mistakes on this trip, which was extremely productive, and it capped off a prodigious year in Australian foreign policy.

The Abbott government has had a tumultuous first year, with some solid achievements and some serious setbacks. But it has been remarkably productive and successful in foreign policy, where Labor, and many Australian commentators, scoffed at ­Abbott’s alleged lack of expertise.

In fact Abbott came to the prime ministership better prepared in foreign policy than any postwar prime minister except Rudd and Bob Hawke. He first got interested in politics at the height of the Cold War, he had 10 years as a minister under Howard, and four years as opposition leader working on foreign contacts and foreign policy priorities.

The first year in foreign policy has seen a mix of pre-election commitments fulfilled, and responses to crises and opportunities which have allowed Abbott to push forward his own agenda.

Before the election, he said he would conclude free-trade agreements with Japan, South Korea and China. The first two are done and the third is likely to be signed in November.

He also said he would stop the boats. This was a foreign policy as well as a domestic issue. Although stopping the boats caused temporary disagreement with Jakarta, structurally it removed what would otherwise have been a permanent, crippling feature of the relationship with Indonesia.

He also said he would pursue a much closer relationship with India. This he has done. He is the first foreign head of government to be hosted to an official visit by India’s powerful new Prime Minister. Indeed, Abbott is the prime minister with the most serious, pre-office interest in India since Alfred Deakin more than 100 years ago. Abbott spent three months in India as a young man.

In delivering his foreign policy outcomes, Abbott has seized ­opportunities. The return of the stolen Shiva statues to India earns immense goodwill and immediately removes what would otherwise have been an ­irritant in the relationship.

But it is in his response to crises that Abbott has performed most strongly. The first was the revelation by former US intelligence contractor Edward Snowden that in 2009 Australian intelligence agencies had eavesdropped on the Indonesian President and his inner retinue. Every jackass and blatherskite in the country immediately demanded that Abbott apologise, reprimand the intelligence services and provide foolish guarantees about future activities. Abbott did none of this, but stayed resolutely calm, ­entirely sympathetic to the Indonesians, protective of Australian core interests and active in maintaining a solid dialogue with Jakarta. As a result, we now have a historic intelligence co-operation agreement with Indonesia.

The disappearance of flight MH370 and the subsequent Australian role in leading the search efforts showed Abbott to the world as being in charge of a competent, focused, trustworthy government. It also led to a productive friendship between Abbott and Malaysian Prime Minister Najib Razak. The downing of flight MH17 over Ukraine, with the loss of three dozen Australian lives, showed Abbott forceful, resolute, but disciplined in an effective response marrying justified plain-speaking and consequential diplomacy.

The rise of Islamic State, involving Australian citizens joining the terror group, has seen perhaps Abbott’s most decisive response. He has spoken plainly about the issue and, within sensible and bipartisan limits, been extremely forward leaning about offering Australian military help to the US. Barack Obama has been grateful for this response and US officials have briefed the American press that Australia’s special forces, along with those of Britain, offer a highly valued, specialist capability.

Part of Abbott’s purpose here is to encourage the continuation of US global leadership, which is of central importance to Australia’s security in the region.

All these efforts are well integrated into Abbott’s conception of Australia’s interests and Australia’s values. Foreign affairs can’t always work at this pace. Much of it, as ever, has been dictated by external events. But in an area where the government makes and implements its own decisions, this has been a highly effective year.

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