Matt Keogh (Burt, Australian Labor Party, Shadow Minister for Defence Industry) Share this | Hansard source

This tired, old do-nothing Liberal government has run out of ideas. We will not take lectures on fiscal responsibility and defence spending from the most wasteful government since Federation—a government that will deliver $1 trillion of debt and have not merely enough to show for it. The only wedge they have left is their national security smears. Let me be abundantly clear: Labor supports the AUKUS agreement; Labor supports the current government's approach to China; and, contrary to the falsehoods of the Minister for Defence, Labor is strong on China, Labor is strong on defence and Labor is strong on national security. I know it is not fun for the nation's media to report on, and it's certainly not fun for the Prime Minister and his ministers to talk about—and I want to let you in on a little secret—that there is national unity between the major parties on defence. For the Liberals to propagate anything otherwise is a complete fallacy. Our criticism of the government on defence is when they don't live up to their own policy objectives, like in support of our Australian defence industry. In a time of geostrategic instability it is absolutely not in the interests of Australia or, indeed, our defence partners to be propagating fake news in relation to defence spending and Labor's record on defence.

Under the Rudd Labor government the average yearly increase in Australian defence spending, according to the World Bank, was up by 10.9 per cent, compared to the last budget of the Howard era, which itself had annual increases of only 7.5 per cent, even when the wars in Afghanistan and Iraq, as well as major operations in Timor and the Solomon Islands, started during that period. The Abbott government not only completely dropped the ball handed to it by Labor on a replacement submarine for Collins but also cut defence spending by an annual average of 1.4 per cent. Even the Turnbull government only managed to increase spending in defence by just over half the amount of the increases of the Howard era following the Abbott reductions. Now under Scott Morrison, our Prime Minister, despite all the rhetoric, they have increased defence spending by only 1.4 per cent annually to 2020.

This Liberal government has no authority to discuss Labor's record on defence. Its record is certainly nothing to gloat about. Historically Australian governments have consistently spent on defence more than two per cent of GDP in times of uncertainty and strategic risk. Contrary to what the defence minister would like to have you think, the defence budget was above two per cent of GDP in both war and peace and under both coalition and Labor governments from World War II until the early 1990s, when every power reduced defence spending, including the US and UK, at the end of the Cold War. During the first half of the 1980s, when Australia was at peace, defence spending actually averaged 2.5 per cent of GDP. For much of the Vietnam War the defence budget was over three per cent. While we're not in a shooting war now it's reasonable to ask whether the geostrategic risks we're confronted with today are of a similar scale to those we faced in the late 1960s. It can't be denied that we are in a period of heightened tension.

As an island nation it's important that we have our own sovereign sustainment and maintenance capability with a skilled trade workforce and the technical know-how. Developing and expanding this requires Australian involvement in acquisition and build as well. The lack of oversight resulting from six ministers in eight years of this Liberal government—indeed, four defence ministers in just the last four years—has resulted in significant time frame and cost blow-outs, with local industry involvement taking a back seat. But for every cost blow-out we're seeing underspends as well, with projects not hitting the spend milestones budgeted because, even more concerningly, they are not meeting the capability, delivery and availability milestones required. Right now our defence acquisition program is predicted to come in $815 million under the original budget targets. The Liberal government's continued lack of support for the Australian defence industry has meant that work that can and should be done in Australia by Australian businesses in all levels of the supply chain is continually sent offshore. This federal Liberal government has continually mismanaged and politicised the naval shipbuilding program, as well as the acquisition of a variety of other major defence projects, to the detriment of Australia's strategic interests.

Let's take a look at what's actually going on and let's start with the latest blow-up in the press. Just yesterday we heard that the Morrison-Joyce government is continuing to scale back flying hours for the RAAF's Joint Strike Fighter, admitting that this critical platform will underperform government promises for at least the next four years. The F-35A project is currently underspending by $175 million, with only 54 aircraft delivered instead of 56 by the end of 2021-22. Two fewer aircraft may not seem like much, but with the classic Hornet fleet now fully retired as well, the Air Force needs every plane that it can get. The Joint Strike Fighter aircraft are critical for Australia's defence, and the fact that they are flying thousands fewer hours than planned is a very real concern.

The Triton high-altitude unmanned aerial vehicle, the UAV program, is $98 million short between equipment and infrastructure spends. Spending on the Hawkei protected mobility vehicle is $207 million short due to a delay caused by a problem with its brakes and supply chain woes. That means the project will spend less than last year, even though it's now meant to be entering full-rate production. We have the Boxer combat reconnaissance vehicle, which is nearly $300 million short of its target and spending less this year than last. Somewhat depressingly, by the end of this financial year the project will have spent more than $1.8 billion with only the first block of 25 overseas built vehicles delivered and local construction for the remainder not even due to start until 2023—that is, at least a seven-month delay. There has been a delay of up to a year in finalising design work on the second block of 186 Boxer combat reconnaissance vehicles for the Army that are due to be built in Australia.

The embattled Hunter frigate program is $123 million under and will barely spend more this year than it did last year. It's not the trajectory you'd want to see as design activity ramps up and purchases of long-lead-time items such as combat systems and propulsion train elements should be starting. While the government has made a lot of announcements about long-range missiles, they haven't transformed into spending. The Navy's guided weapon subprogram is falling well short of its planned outlay, from $210 million down to just $74 million, a massive drop in program spending compared to last year. We have the classic MRH-90 helicopter failure with the project missing its target by $106 million due to a delay in its delivery schedule. Ironically, one of the few big projects that's still forecast to hit its spending target for the year is the Future Submarine program, which was cancelled less than a quarter of the way into the financial year. Seemingly, this now cancelled program is costing Australians at least $3 billion for the delivery of precisely zero submarines.

The top 30 acquisition projects in Defence are a combined $1.9 billion under their planned budget for the year. While this government propagates drums of war with increased indications of evaporating warning times and a pressing need for new capabilities to be delivered faster, instead the government is actually delivering this new capability even slower than planned. This Morrison-Joyce Liberal-National government is clearly incapable of managing its defence contracts. It's failing on all counts: overspends, underspends, cost blowouts, time blowout, project failures, all adding up to delays in providing much needed capability. Ultimately, it's the Australian Defence Force, our men and women in uniform, who suffer from a lack of availability of critical platforms due to the chronic mismanagement of defence projects under this government. This Liberal government has failed to implement or, indeed, articulate strong, measurable and enforceable Australian industry capability requirements in our defence project contracts.

Only Labor is committed to ensuring major defence project contracts contain measurable, enforceable, audited and transparent Australian industry capability requirements. Only Labor is committed to actually supporting and growing our sovereign defence industry capabilities. The government remains just announcement and spin. Be in no doubt: Labor is committed to supporting our Australian defence industry and improving our defence capability to support our men and women in uniform and ensure our national security.

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