Australian Submarine Corporation

Media Statement - 1 November 2002

The Howard Government's mismanagement of the Australian Submarine Corporation (ASC) has left the company in dire financial straits, with a reported profit of just $127,000 in the year to 30 June 2002.

The reported result raises serious concerns about the long-term viability of the ASC, which has seen its operating profit drop significantly over the past three years.

John Howard has failed to honour a commitment to sign a $60 million-a-year contract with the ASC for the full cycle docking of the Collins class submarines.

The Prime Minister made this promise during a visit to the ASC during the 2001 election, stating that the contract would provide much-needed certainty and security to the company and its 800 employees.

Given a reported profit of $127,000 last year, it is not clear why Robert Hill recently agreed for the ASC to pay US-based consultants $13 million a year over the next three years.

On the basis of the reported results alone, that decision will drive the ASC into the red, and raises serious questions about the viability of the company.

The ASC is vital to Australia's strategic interests, given its unique capability to service and support our submarine fleet.

It is becoming clear that a large part of the Government's decision to form a Defence shipbuilding monopoly is being driven by the opportunity to cover up its bungled management of the ASC.