Andrew Bolt: Submarines deal is not a silver bullet for SA’s problems

THERE’S a stench of desperate politics around the $50 billion submarines announcement, writes columnist Andrew Bolt. Is SA fooling itself about the much-vaunted deal?

• Ultimate backpaddle: Sacked ‘canoe’ minister now says ASC is great
• Much mocked evaluation process ‘gave best subs deal’
• Premier off to France to chase more subs jobs
• Oui did it — how SA secured the subs contract

THERE’S a desperation about the $50 billion submarine deal that warns our economic leadership is weak and our money about to be wasted.

Worse, our national security seems to have been sacrificed for political advantage.

Standing on a wharf in Adelaide on Tuesday, just 10 weeks before the election, Prime Minister Malcolm Turnbull boasted he’d secured the defence of jobs.

This was “a great day for our navy, a great day for Australia’s 21st Century economy, a great day for the jobs of the future,” he said.

“Australian-built, Australian jobs, Australian steel, here, right where we stand.”

That boast — especially the absurd reference to steel — said it all.

Buying submarines should be entirely about making Australians safe, not giving Australians work.

It’s certainly not about saving the steel industry.

I don’t question choosing the French design above rival German and Japanese bids. I take the experts’ word that it is the best.

Prime Minister Malcolm Turnbull and Chief of Navy Vice Admiral Tim Barrett. Picture: AFP

We should also thank the Turnbull Government for finally making a decision that Labor, in its six years in government, dodged.

But the selling of this deal was so plainly political that it is hard to believe politics didn’t drive some of the other decision making.

For a start, the winning French shipbuilder, DCNS, last year said building the first of the 12 submarines in France would ­”allow the first submarines to be delivered to the Royal Australian Navy more quickly’’.

Any delay matters, since our ageing Collins Class submarines were supposed to be decommissioned by 2026, and the first of these new submarines won’t be delivered until the early 2030s.

But the government — which denies there will be a delay — wanted all 12 submarines in Adelaide, knowing anything less would kill it politically.

Here is the brutal political calculus. The polls show the government neck and neck with Labor, and four Liberal seats in Adelaide are in danger of falling to either Labor or Senator Nick Xenophon’s party, both demanding the subs be entirely built in Adelaide.

But building ships and subs here rather than overseas costs more — at least 30 per cent, according to a Rand Corporation report and leaked Defence Department assessments.

If true, for the same money we’re spending for 12 submarines built in Adelaide we could get 16 built in France. That’s four extra submarines, which would make Australia safer.

Insiders say the difference is actually as little as 10 per cent.

Turnbull himself says only that we’re paying a “premium” of “an order of magnitude” without revealing what it is.

That “premium” alone suggests politics at play. So did Turnbull’s big sell yesterday, repeating how “Australia’s submarine fleet will be built in South Australia by Australian workers with Australian steel”.

This was a clear reference to the looming collapse of steelmaker Arrium, a big employer in the dying city of Whyalla, with Turnbull preposterously hinting his subs deal could save it. But Arrium does not make the kind of steel needed for submarines.

Moreover, even if it invested the millions to make such steel, it would have to wait years for the order for the first submarine — an order hardly big enough to save it.

Still, let’s drop the scepticism. Let’s assume this was the right decision in every respect.

That still leaves one great worry for our economy. You see, this deal is presented as the saviour of poleaxed South Australia, now so flat that the unemployment rate is the country’s highest.

The state’s Labor government celebrated. “Oui did it!” shouted the front page of Adelaide’s Advertiser.

But wait. About 70,000 South Australians are without a job. This project, at the massive cost of $50 billion, will create — or save — just 2800 jobs, and only from next decade.

Australian Prime Minister Malcolm Turnbull meets with shipbuilders at ASC ship building facility. Picture: AAP

It is no magic bullet in a state which in its green madness hit heavy industry with the country’s most expensive electricity, thanks to its massive wind farms.

Nor is it a magic bullet for the rest of our economy. Huge government investment like this is financed by taxes taken from other businesses, or adds to the massive debt the federal government is running up — an estimated $500 billion by next year.

No submarines will save us from this trouble, for all Tuesday’s hullabaloo. That demands instead the hard, unglamorous graft of reform of our workplace laws and tax policies, plus more incentives to take risks.

The submarines are the shiny gift that blinds us to our real challenges.

And that gift may also have blinded us to what should matter more: the defence of the nation, not the government.