Senator JOHNSTON (Western Australia—Minister for Defence) (14:07): I thank Senator Bernardi for his support and interest in the Defence portfolio. When we came into government we faced a potentially critical problem with the air warfare destroyer program. Senator Conroy: Release the Winter report! The PRESIDENT: Senator Conroy! Senator JOHNSTON: As Senator Bernardi has quite rightly said, it was running 21 months late and $360 million over its target cost; and that was about midway through the construction of ship one. Labor failed in its duty to deliver naval capability. Issues were put in the too-hard basket, just as I have indicated over so many weeks with the future submarine project. So yet another challenge was left to this government, and more particularly Defence—to me—to fix. We all want a viable local shipbuilding industry; I think that is a given. People are supportive of our defence industry, but they do expect and demand value for money. The air warfare destroyer program must be recovered, and the Abbott government has a plan to do this. Minister Cormann and I commissioned the Winter review to get to the bottom of what was wrong with the program. The overall intention is to get industry to the type of productivity we were able to demonstrate through the Anzac frigate build program. Our advisers are working hard behind the scenes with ASC and the other industry players to transform this program from the problem that it was. It has been an enormous challenge. Senator Conroy interjecting— The PRESIDENT: Senator Conroy, you will have an opportunity later to ask questions. Senator JOHNSTON: And yes, we have been frustrated. But I am very pleased to say that through our combined efforts we are beginning to see the types of green shoots that our program was designed to produce. Ship one has been consolidated and is being fitted out ready for launch next year. Ship two is well into construction and has improved in terms of productivity, not cost, by 30 per cent. Ship three's blocks are now under construction. If this keeps up we may have a shipbuilding industry in Australia.