27 February 2009

Let's keep ASC where it belongs

The Government announced yesterday that the sale of ASC Pty Ltd, formerly the Australian Submarine Corporation, will not proceed at this time.

This is a good decision. An even better decision would be a definitive announcement that ASC Pty Ltd will not be sold.

Our submarine capability is a vital component of Australia’s defence preparedness. The Government’s willingness to sign up for the $30+ billion price tag on a successor to the Collins Class shows that the Government itself believes so. This being the case, the ability which currently resides in ASC to build, maintain, sustain, modify and upgrade our present and future submarines is an integral part of that preparedness.

Through-life support of Collins, the construction of the Air Warfare Destroyers and the preparations for the post-Collins build constitute a big enough challenge for the Board, management and workforce of ASC without the distraction and demotivation of working for an organisation which perpetually has a “For Sale” sign in the window.

In announcing yesterday’s decision the Ministers for Finance and Defence emphasised that the current global uncertainty in global financial markets presents significant risks to a successful sale of the company. No doubt that is so, but the fact is that it will never be a good time to sell the company (it has been for sale since 2000). It will always be in the middle of a challenging build program, and the Americans will always have legitimate concerns about the security of their military technology if we try to dispose of the company to one of the submarine builders who are most likely to want to buy it. We should have an equal level of concern about what happens to our intellectual property in the event of a sale.

Governments of both political persuasions need to think a lot harder and smarter about the role of onshore, indigenous defence industry as an integral part of our capacity to defend Australia. Recognising the realities in relation to the future of ASC would be a good place to begin.

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