Michael Hatton (Blaxland, Australian Labor Party) Share this | Hansard source

I am happy to support the comments of the Chair of the Defence Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade and to endorse his remarks on the committee’s report entitled Review of the Defence annual report, 2004-05. The committee looked at a number of different topics, as the chair emphasised. One topic of vital importance to Defence was the whole question of the Chinook upgrades and how they were proceeding. We also looked into the Joint Offshore Protection Command and its operation.

As we did the previous year, we also looked at the question of Defence’s financial statements and how they could attempt to bring what used to be a cash accrual system into line with the new mode of operation that Treasury has imposed. That new mode of operation is, of course, accrual accounting. What was demonstrable a year ago was demonstrable this year also: accrual accounting just does not fit a department like the Department of Defence. This is due to the large amount of material they have still got stocked from the 1970s and 1980s and they simply cannot determine a price in relation to it. A year ago we suggested that this process needed to be foreshortened and we took an approach where we drew a line and said, ‘You don’t need to expend resources to continue to try to do this. Finance and Defence should come to an agreement to go forward on an accrual accounting basis instead of work being done that is immensely costly and does not assist in the defence of the Commonwealth.’

I want to look in particular at what we did with the Defence Materiel Organisation. I think it is extremely important. If you look at the upgrade of the Chinooks and also at the series of other programs that are in play at the moment—the upgrade of the F18, the future of the F111, the maintenance of Defence materiel and the very large purchase programs that we have in play at the moment—central to that process is the question of how our project management and reporting works. Here I want to congratulate not only the chair but also the other members of the committee for the manner in which they pursued questions and gained insights that had not been available anywhere else within the system. It is a demonstration that the parliamentary system, at a joint level with House of Representatives and Senate members, can work outside the Senate area as a probing committee to get to the core of what these questions are about.

One of the committee members, Senator Johnston, who has some experience in this area, indicated, ‘We learned more in half an hour in our committee than we did through 400 questions in Senate estimates.’ It goes to the question of being vitally interested in the area of concern, knowing the right questions to ask, the way in which to pursue them, and having the end product across both sides of the parliament, in a bipartisan way, to get to the truth of the matter and to assist this most important Commonwealth agency to do its job, to do it better, and to make it more accountable. It goes also to the ability to effectively burn down through the layers of information to get to the truth of the matter. I want to compliment the other members of the committee on the way in which they pursued that.

This review of the 2004-05 Defence annual report laid the basis for the rest of the year’s work for the committee. We pursued elements of what we dealt with here throughout the rest of our inquiries—particularly in relation to what should be our next major aircraft, the replacement for the F111 and the F18s, and the pursuit of the maintenance regime in relation to the F18 and the upgrade there; similar to the question in relation to the Chinook. What was learnt on that day was materially beneficial not only to the committee and the parliament but also to the Defence organisation itself and to the Australian people as a whole. It indicates that, when you can pursue matters in depth in a cooperative way, seeking the truth, you get the best for the parliament, the committee, the government and the agencies themselves, because it helps them to refine their knowledge of their own operations.

I commend this report to the parliament and indicate that we are in a much better position now, given the level of coverage we have across the world, to assess just how well Defence is doing. (Time expired)

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