$159k bill just to lock in pledge to spend at least 60 per cent on Future Submarines in Australia

Renegotiating Australia’s Future Submarines contract – to lock in a pledge to spend at least 60 per cent in Australia – cost taxpayers nearly $159,000.

Taxpayers forked out almost $159,000 for legal talks to renegotiate the $89bn Future Submarine contract in the past year.

New documents provided to parliament reveal it cost $158,924 in external fees for the Department of Defence to renegotiate the contract to officially lock in French defence company Naval Group’s pledge to spend at least 60 per cent of the contract in Australia.

Labor frontbencher Penny Wong has slammed the expense, saying there should have been a legal requirement for Australian industry content in the contract “right from the start”.

Other documents reveal it took 26 meetings between Defence’s officials, legal and financial consultants and Naval Group from August 2020 to March this year to agree on the terms for Australian industry content in the 12 Attack Class submarines over the life of the contract.

One high-level meeting in February involved Defence Department Secretary Greg Moriarty and Naval Group’s global chairman Pierre Eric Pommellet and Naval Group Australia chief executive John Davis.

Two advisers from law firm Clayton Utz and financial advice consultants from Freebody Cogent and the International Centre for Complex Project Management were hired to assist the government in the talks.

Naval Group made the pledge in February 2020 after concerns about the level of Australian industry involvement, although the original agreement required the company to maximise local content.

Senator Wong blasted the government’s track record on the Future Submarines, saying it had “never been committed to ensuring it delivered long-term jobs for Australians”.

“First, the Abbott Government tried to send the jobs overseas.

“Liberal Defence Minister David Johnston famously told South Australian workers they couldn’t be trusted to build a canoe.

“Christopher Pyne promised 90 per cent of the build would be in Australia but that quickly dropped to 60 per cent.

“Then the Morrison Government dropped that back to just 60 per cent of the contract value with Naval Group will be spent in Australia, which absurdly includes hotel stays, travel agencies, and locally-provided French lessons.

“Now taxpayers are lumped with the bill for lawyers to fix up this mistake, years after the deal was first struck.”

When the contract was officially updated in March, Mr Davis said: “There will be increasing levels of local content in each of the 12 Attack Class submarines, as we continue working with local businesses to boost Australia’s sovereign capability.”

“Ensuring that at least 60 per cent of the Attack Class contract value is spent locally will create hundreds of Australian jobs, for the long term, in new supply chains around the country.”