Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Hansard source

I rise to lend some comment from the coalition on the Customs Amendment (Military End-Use) Bill, noting, of course, that the Defence Trade Controls Bill 2011 and the Customs Amendment (Military End-Use) Bill 2011 are being debated cognately. We are now at the end of a road that we have journeyed down for a number of years. The coalition began the process of creating 'trusted communities', whereby Australian and US companies can trade defence equipment without the need for ostensible export licences. Indeed, the former Prime Minister, the Hon. John Howard AC, and the former President, George W Bush, signed the Treaty Between the Government of Australia and the Government of the United States of America Concerning Defence Trade Cooperation in Sydney on 5 September 2007. The Rudd government signed off on the subsequent implementation arrangements on 14 March 2008. We then waited for the US congress to pass implementation legislation at the end of September 2010. Then the Senate ratified the treaty on the following day, 29 September. The intent of the treaty is to permit the licence-free export of defence goods and services, provided, of course, they meet security and regulatory requirements between the Australian and US governments and between Australian and US companies.

Currently, Australian companies that need access to defence items or technologies in the US need an export licence from the US Department of State. This is to comply with the International Traffic in Arms Regulations, or ITAR, system. The existing export control regime, however, has focused on exports of tangible, physical, tactile goods. The growth of technology, especially computer and software technology, has meant that many defence export services can be provided literally over the net or through a range of brokers. These are not captured easily within existing controls. It is therefore argued that there are currently gaps in Australia's existing defence export controls. Those gaps exist in terms of internal or intangible transfer of technology; provision of services relating to defence and strategic goods and technology; the brokering of the supply of these goods, technologies and related services; and the exportation of goods intended for military end use that may prejudice Australia's security, defence or international relations.

The Defence Trade Controls Bill 2011, therefore, is designed to strengthen the defence export controls and to implement a treaty and provide the framework around the treaty between Australia and the United States of America. More specifically, the bill will establish and manage the 'trusted Australian community'. It will define membership requirements of this community. It will define offences for individuals and companies who fail to comply with their treaty obligations. It will establish monitoring powers and record-keeping requirements.

This process was begun by the coalition as it saw a desperate need to cut red tape, to simplify processes for sharing equipment, information technology and the like between Australian and US defence companies and to deliver new opportunities for Australia's defence industry to work closely with US industry, especially on sensitive defence technology projects. The coalition is fairly proud of the initiative. It sits in well with what the coalition is all about—boosting exports, boosting jobs, cutting red tape, helping companies enter global supply chain contracts, supporting jobs and providing a longer term stability for the Australian defence industry. It was after all the coalition that committed, year on year, to over 30 first- and second-pass approvals through the National Security Committee of Cabinet so that the Defence Cooperation Plan, the DCP, could be taken to a banker. The DCP outlined exactly when Defence would look to procure goods and services, and defence industry were able to plan their R&D, their financing and their people strategies around it. When Labor came to power, the DCP was cut from 10 years to four years. But now it is back again, as Labor have acknowledged the egregiousness of their mistake. Yet, in place of the 33 first- and second-pass approvals granted by the coalition, last year we were down nine—and in the previous year there were not too many more than that. Fourteen billion dollars worth of defence industry and defence projects have been pushed to the never-never. This is the Labor government's current track record on defence industry, so it is little wonder that they are lauding this particular bill and what has happened with defence industry as a result of it. But let this parliament be in no doubt: the process of cooperation began with the coalition, and my best guess is that when all is finally said and done it will be the coalition who will implement it sensibly and seriously to the very end.

The coalition also saw the need to speed up delivery of the next generation of defence technology through improved military-industrial collaboration, the coalition saw the need for further enhancement of interoperability between Australia and the US, and the coalition saw the need to ensure that the ADF continues to enjoy access to cutting-edge capabilities in the future. We believe that the intent and the spirit of this treaty reflect a significant trade and industrial cooperation between Australia and the US. We believe it will complement the ANZUS treaty and complement our close intelligence cooperation and the current free-trade agreement, and it is made possible by the unprecedented closeness of our alliance with the US.

The coalition are therefore wholly supportive of the intent of this legislation and broadly supportive of the direction in which the legislation is going. We do have a range of concerns, and these have been confirmed through a range of industry consultations. One concern is about the fact that Australia and the US signed the treaty without a regulation impact statement having been made. That is not surprising, considering that regulation impact statements are becoming very short and sweet—or, indeed, non-existent—in most legislation this government is putting through. Their approach is a far cry from their 2007 mantra that there would be a regulation impact statement for everything the government did and that they would do nothing without a cost-benefit analysis. The problem is that there is no cost-benefit analysis for this bill. Neither is there a cost-benefit analysis for the $43 billion NBN, but we digress when we begin to talk of one of the largest expenses in Australian history, which this government is undertaking without a cost-benefit analysis and in direct contravention of its 2007 policy. Why make some sort of comment about its integrity in the 2007 election? We will just move on from that little blip.

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