Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) the Government's record $200 billion investment in the Australian Defence Force (ADF) capabilities represents a unique opportunity for Australian businesses;

(b) many Australian businesses who first supplied defence materials to the Australian Government go on to export these products overseas; and

(c) Australia ranks thirteenth in the world for defence expenditure, but is only the twentieth largest exporter;

(2) congratulates the Government on its activities to date to encourage local small businesses to bid for Government defence contracts, including the 2016 Defence White Paper, and Integrated Investment Program, the Defence Industry Policy Statement and the Centre for Defence Industry Capability (CDIC);

(3) welcomes the Government's efforts to develop a Defence Export Strategy to plan, guide and measure defence export outcomes that will support our foreign and trade policies, defence industry, defence capability and national security objectives; and

(4) encourages small and medium enterprises all over Australia to explore the opportunity to supply products and services for the ADF, and to contact the CDIC to learn more.

It gives me great pleasure to move this motion as I'm a strong supporter of the government's $200 billion investment in defence, and the impact it will have on small- to medium-sized businesses across Australia. It's without doubt an exciting time to be involved with the defence industry in Australia. The government is investing record amounts of money into defence procurement in Australia and I'm working hard to position my own electorate of Fisher to take advantage of what is on the table.

The release of the defence white paper, the Integrated Investment Program and the Defence Industry Policy Statement last year marks a significant milestone in Australia's strategic policy approach. It identified that our defence industry is a core element of our defence strategy and capability, and it established a long-term plan to grow and support Australian industry to deliver defence capability. A significant investment is being made into the renewal of ADF capability. The Integrated Investment Program has outlined a $200 billion investment over the next ten years.

Building on this is the Defence Industry Policy Statement, which has been developed to maximise businesses in Australia that can get involved in the delivery of defence capability and sustain it long into the future. One such business in my own electorate of Fisher is Praesidium Global. This Caloundra based company designs and manufactures multipurpose unmanned ground vehicles that can assist soldiers on patrol with hauling heavy loads such as weapons, ammunition, packs and the like. They can also be used as armed assault vehicles and for casualty extraction in hazardous environments. Defence engagement with Praesidium Global came about following their attendance at the Army Innovation Day in Canberra nearly a year ago. The innovation day is held with the purpose of encouraging Australian companies to present novel capability options that could be attractive to Army's future development. Praesidium Global was eventually selected to conduct a trial with Defence at a value of $1.3 million. This exciting opportunity has put Praesidium Global on the defence map and has generated strong interest from many other multinational companies. Praesidium Global are now displaying their unmanned ground vehicle in London at an international military hardware exhibition, as I speak.

I must also commend the government on establishing the Centre for Defence Industry Capability, the CDIC, and Defence Innovation Hub. The CDIC recently presented at my inaugural Fisher defence forum and are working with me on another event next month. The CDIC has received $230 million to financial year 2025-26 so that it can develop and deliver tangible results for defence through greater industry engagement and the facilitation of innovation through the Defence Innovation Hub. It will be key in upskilling industry's global competitiveness and export readiness. It is specifically this focus on export readiness that excites me, as I see great potential for Australia to maximise its reach in this area. Australia ranks 13th in the world in defence expenditure and is the 12th largest exporter. Greater emphasis on this in the future will no doubt expand our capabilities in this space.

In my own electorate of Fisher, I have identified that opportunities in defence are one way we can grow and develop new industries on the coast. This will stimulate employment and prosperity, which will have long-term benefits for our growing community. As I mentioned earlier, I held the first Fisher defence industry forum in May of this year. We had over 170 representatives from small- to medium-sized businesses involved. We were fortunate to have the Minister for Defence Industry, the Hon. Christopher Pyne, attend as our guest speaker, and he certainly got the crowd excited about the future possibilities in defence. Following this very successful forum, I held a breakfast with retired Air Chief Marshal Sir Angus Houston. I am now planning a workshop even next month that will educate interested businesses on how they can navigate their way through the defence industry.

Our government should be commended for identifying that Australians have a role to play in the development and sustainability of the defence industry in our own country. By investing record amounts of money and establishing a range of programs aimed at assisting Australian businesses to work with defence, the government is demonstrating that it has confidence that we can deliver in all areas of defence capability.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Richard Marles (Corio, Australian Labor Party, Shadow Minister for Immigration and Border Protection) Share this | Link to this | Hansard source

We welcome the fact that the government has come to see the importance of a sovereign capability when it comes to the defence industry in this country. It would appear now to be something of a bipartisan view. It's taken time for the coalition to reach this point, but we will take them as they arrive. But it's important that this commitment on the part of the government to a defence industry in this country to support our nation's sovereign capability is something that is pursued in a way that is more than skin deep. Unfortunately, as we see in the way in which this is being handled at the moment, too much of the way in which the government is dealing with this, and has dealt with it since 2013, has actually had a negative impact in relation to jobs in the defence industry in this country.

At the time that Labor left power in 2013, our maritime shipbuilding industry, in respect of Navy, was employing 4,000 people in this country. But we faced the prospect of the valley of death, which is not something that couldn't be foreseen. In essence, the air warfare destroyers and the LHDs were coming to a conclusion before the offshore patrol vessels and the future frigates would start the commencement of their work. Needing to find a way through the valley of death was something that was very much in the minds of those making policy on the Labor side of the equation. I note the presence in this chamber of the member for Eden-Monaro, who was around at that time, who worked tirelessly to conceive of a way in which we could work through the valley of death.

Part of that was to have the building of the supply ship done in Australia, as well as bringing forward the construction of the offshore patrol vessels. What we saw was the supply ships being handed off to Spain, which is where they're now being constructed, and we still await a decision being made by this government on the preferred tenderer in respect of the offshore patrol vessels. That has seen the loss of somewhere between 1,500 and 2,000 jobs in the shipbuilding industry in this country. Measured in terms of those employed in the defence industry, there is absolutely no doubt that we have watched it go backwards since this government came to power. In my electorate of Corio I have companies such as Chemring, Marand and Winchester—all important contributors to the defence industry. A vibrant defence industry in this country is critical for those businesses to continue their work and for people in my electorate to continue to be employed.

Far too often what we've seen on the part of the government is a greater interest in closing free trade agreements, for example, than in the defence industry. We saw the supply ships being bartered around in an attempt to close the Korean free trade agreement. We saw the submarines being put on the table in an attempt to close the free trade agreement with Japan. That had a lot to do with free trade agreement policy but not a lot to do with the defence industry policy for this country. Again we see that the commitment to defence industry is skin deep and highly political. A well thought through policy is not what we've seen from this government. We had perhaps the worst and most egregious example of that at the beginning of 2015, when Senator Sean Edwards from the other place made his support for the then Prime Minister, Tony Abbott, in a Liberal Party leadership dispute contingent upon a particular outcome of the defence industry policy in relation to submarines in Adelaide. That treated our nation's defence industry, our nation's Defence Force and the Australian public with utter contempt. The former defence minister was out there arguing that ASC was unable to build a canoe. Nothing said more about this government's contempt for the prospects and skills of the Australian workforce in relation to defence industry than that.

We've seen it happen in the last few days as well. At a hearing on Friday, a Senate committee saw an Australian government tender document in respect of our future frigates that said the Commonwealth is not mandating that the successful tenderer use the workforce of ASC Shipbuilding in the building of the future frigates. Again this government is abandoning Australian workers when it comes to working in Australia's defence industry. Frankly, it needs to do better. (Time expired)

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

It's my great pleasure to second the motion and to commend the government for the not just significant but incredible investment it's making in defence industry. The member for Corio, as he's leaving the chamber, really should hang his head in shame at the absolute misrepresentation that he's put up for the last five minutes. He's now left the chamber. He wasn't able to hang around for the real facts. But let's put the facts on the table. We hear about the valley of death. The valley of death happened under Labor. In six years, when Labor knew the valley of death was coming, Labor did not one thing to correct it. It did not commission one single naval vessel from an Australian yard, and the valley of death is now being remedied like never before by our government. Let's not forget that under Labor 119 defence projects were delayed, 43 projects were degraded, eight projects were cancelled and—I say again—not one single naval vessel from an Australian yard was commissioned to be built in this country in six years.

Even worse, to give a strong indication as to how significant the failure by the previous Labor government was, Labor cut the Defence budget in 2012-13 to the lowest level of funding since 1938, at only 1.56 per cent of GDP. In contrast, very proudly, the Turnbull government will grow the Defence budget to two per cent of GDP, three years ahead of schedule, by 2020-21. That is because of our record $200 billion investment in the Australian Defence Force, including in some very important projects—building offshore patrol vessels, the submarine program, and our very comprehensive commitment to rebuilding our shipping industry in Australia. We're incredibly proud of what we're doing.

Of course, we're also making a very significant investment in the Land 400 project. That's now, of course, down to a big fight between Queensland and Victoria. We're working very hard to secure that project and that $5 billion contract for Victoria. The Land 400 phase 2 project will acquire 225 combat reconnaissance vehicles. It's a very significant project. Of course, that will then go onto phase 3. I want to commend the work that's been done by my coalition colleagues in Victoria who are fighting for that project which we hope will see many jobs in both Melbourne and Geelong.

Very pleasingly, one of the most significant companies in our region is Marand. Marand has done some incredible work on the Joint Strike Fighter Project, constructing not only the trailer but also the tail for that particular aircraft. It is also partnering with BAE Systems in building the hull for BAE's vehicle, so it is wonderful to see, in contrast, perhaps, to Rheinmetall's bid, how much investment BAE is placing in this bid in terms of Australian defence jobs. That's what our commitment is all about. In contrast to Labor, we recognise that, when we invest in Australia's defence industry, we're also determined to invest in growing Australian defence jobs. It's been my great pleasure to conduct a number of roadshows on behalf of the Minister for Defence Industry, speaking about the opportunities for small- and medium-sized enterprises—which is very exciting—including, of course, on the Land 400 project.

I should just say that it was with great excitement that I joined the Prime Minister, the Minister for Defence and the Minister for Defence Industry for the historic arrival of Australia's first two F-35 Joint Strike Fighter aircrafts at the International Airshow in Avalon, which is an incredible showcase of our firepower, if you like—for want of a better word. It really is wonderful to see that more than 50 Australian businesses have already shared in $800 million of value in the F-35 production program, which has created 2½ thousand jobs around the country. So, unlike Labor's efforts, we are focused on delivering thousands of jobs and billions of dollars in investment, including, of course, in my great state of Victoria.

Mike Kelly (Eden-Monaro, Australian Labor Party) Share this | Link to this | Hansard source

This is an opportunity to really bell the cat on the lies that have been peddled in relation to defence expenditure. All sound commentators and fact checkers have pointed out that the percentage of GDP figure fluctuates dramatically through the course of an economy because of the fluctuation in the GDP statistics. It's really ironic that the coalition like to cite the 1938 figure. It was a coalition government at that time leading Australia down a blind alley in preparation for World War II. It was the Curtin government that took spending from that historic low to a near 30 per cent of GDP figure that put this country on track to actually fight off an existential threat. Of course, after that, it was under Labor governments in the seventies—during the Whitlam government and, of course, particularly during the Hawke-Keating years—when spending as a percentage of GDP never fell below two per cent. For five years, it was at 2.6 per cent—a figure that the Howard government never matched in its time and, in fact, was closest to those GDP figures of the 1930s. In fact, it was the Gillard-Rudd government that came the closest to that two per cent figure through those last six years by reaching 1.96 per cent, which this government has not yet reached. We had a promise from them of hitting two per cent and, this year, hitting 1.9 per cent, but that's not as high as the highest figure that Labor achieved.

Labor, in fact, took defence spending to a record level of $114 billion in our final budget, and, over the defence guidance period, we were going to be spending $333 billion. More importantly, as my colleague the shadow defence minister pointed out, we were going to bridge the valley of death on the back of, of course, Labor creating our naval shipbuilding industry by building the last two Adelaide class frigates, the Anzac frigates and the Collins submarines, which the Howard government then completely wasted. We had to spend a billion dollars rebuilding Australia's capacity in the workforce and industry to get that shipbuilding program rolling again. I had Defence advice, as the Minister for Defence Materiel, in relation to those supply vessels that said that not only could they be built here but they should be. That advice to me said that a full in-country build for SEA 1654—the supply vessels—could provide critical workflow to Australia's naval shipbuilding sector across all three shipyards, avoiding the costly decline of specialist skills between completion of the LHD and AWD projects and the start of Future Submarines. They said that optimisation—that is, local build—could overcome the imminent impact of the valley of death on sustainability of the national shipbuilding industry and retention of critical skills. There were no known reasons why either design they were contemplating could not be built entirely in Australia. That was our commitment prior to the 2013 election. This government sent those vessels to Spain, for Spanish jobs. They should've been built here and there would have been no valley of death.

The Minister for Defence Industry likes to claim that we didn't commission a single vessel. That was because no planning had been done during the Howard government for the replacement of the submarines, for the supply vessels, for the offshore patrol vessels or for the patrol boats. We had to pick the ball up from ground zero. To give an idea of what is entailed in that, the replacement process for the Oberon class submarines began in 1978, and the first of those vessels didn't start hitting the water till the late nineties. The last boat hit the water in 2003. That demonstrates how long the planning process takes in commissioning vessels. How many locally built vessels, major fleet units, has this government commissioned in its four years? Zero. Let's get the facts right, let's get the record straight. Another member referred to the Land 400 project, which this government has also made a mess of, along with its record prior to us coming into government in 2007. We had to place 21 projects of concern into a special process, and there was the $1.4 billion lost entirely through its catastrophic Seasprite program, which we had to remediate by creating the Seahawk program. There was the landing craft that it spent $40 million on that didn't fit any vessel we then owned or were building—a completely wasted sum of money.

This government needs to focus on letting Austal and ASC be in the process for the bidding of the frigates. A complete lie is being told about Australian industry commitment to our projects. This government needs to get serious on that. We're very happy to work with it on ensuring that our industry is fully factored into the defence processes; let's actually put some substance on that instead of the constant politicisation we see from the Minister for Defence Industry.

Jason Falinski (Mackellar, Liberal Party) Share this | Link to this | Hansard source

Small businesses have long been the foundation upon which Australia's prosperity has been built. In my electorate of Mackellar alone, there are 24,000 small businesses. Historically, government defence contracts have always been off limits to these small businesses, unreachable to all but the biggest defence contractors. Huge contracts were put to tender internationally, with the world's biggest players vying for a piece of the pie. I'm proud to say that this government has taken action to open the defence industry to our Australian small businesses. Recent changes spearheaded by the Minister for Defence Industry have made it significantly easier for Australian businesses of any size to access defence contracts. Our defence industry is much more than tanks and ships. We require a vast array of services, from software systems and professional services to maintenance support and from nuts and bolts to the paint used on our warships or the communication cables on our submarines. All of these can now be made in Australia by Australians.

Along with the government's overhaul of the tendering process, we are delivering on our commitment to revitalise the Defence Force with a $200 billion investment—the largest since the Second World War. With $49 billion dedicated to developing Australia's enabling capabilities, this investment brings with it a plethora of opportunities for Australian businesses. This government has realised that we need to play the long game. Yes we want to make sure that our defence forces have the best, most cutting edge equipment to supply our forces, but we also realise that servicing that equipment and making it better and better requires us to develop the know-how here. Once a frigate is built, its individual components require maintenance and the engineers who worked on the original project will keep repairing, maintaining and improving the fleet for years to come. Investing in a local defence manufacturing industry means investing in jobs for generations to come. It's an investment in skills and innovation. Like a colony of mushrooms, once a business secures a defence contract, no matter how big or small, supporting businesses and industries grow around it.

I would like to take this opportunity to encourage all businesses in Mackellar to get involved, to see what opportunities are open to them in defence and to tender for contracts, so they too can manufacture goods or provide services integral to Australia's defence and security. The Centre for Defence Industry Capability and the Defence Innovation Hub exist to facilitate small- and medium-sized Australian businesses entering the defence contracting supply chain by providing guidance and know-how. They liaise with businesses directly to help them maximise their competitiveness for defence contracts. Once in the defence supply chain, these businesses can use their skills to make the most of defence-related export opportunities, capitalising on Australia's close relationships with its defence allies and trade partners.

Countless Australian businesses have already started making the most of these opportunities. Over the next decade, the development of the F-35 Joint Strike Fighter project, in which Australia has played a leading role, will result in over $1 billion in contracts for Marand Precision Engineering in Victoria. Closer to home, on the Northern Beaches, hydraulic engineering firm HI Fraser recently manufactured the millionth coupling needed for the Collins class submarine program. Recently this government, led by the Minister for Defence Industry, won an international tender to become one of only four worldwide F-35 Joint Strike Fighter service hubs. That means that Australian companies will be carrying out all high-level repairs in the Asia-Pacific region, firmly establishing us as a world player when it comes to defence servicing. This contract for the maintenance of military aircraft alone is forecast to create up to $100 million worth of business, and that's just initially. Programs such as this one also create hundreds of highly skilled, advanced manufacturing jobs, using Australian know-how from teams such as the one led by Richard Kirkby and Chris Williams at HI Fraser.

I hope all Australian businesses will seize this opportunity to get involved and to become part of the Australian defence industry. I would also like to thank the Minister for Defence Industry, the member for Sturt, for his consistent efforts to increase opportunities for Australian businesses in the defence industry. Ultimately, this is how we will secure prosperity for our great nation. (Time expired)

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

I must say, Deputy Speaker Price, it's wonderful to watch you sit there with such patience and not burst out laughing at the previous member's contribution. The member for Fisher wants us to pat the government on the back for their efforts to develop a defence export strategy, but we are wondering what he is actually proud of. Is he proud of the fact that this government's inaction is costing Australians jobs? Is he proud that, over the last four years in government, those opposite have been very quick to talk about defence expenditure but are very slow in actually delivering? The government has wreaked havoc on Victorian defence supply enterprises, leaving thousands of people without jobs, over the last two years alone. Australia is at risk of falling behind in defence industry exports, while the government is happy to sit comfortably at No. 5 in defence imports.

I will break that down for you. What it means is that those opposite are happy to spend billions of dollars in defence materiel projects overseas, but when in government they won't invest even a dollar to strengthen Victoria's shipyard capabilities. It's yet another example of this government's continuous neglect of Victorian infrastructure and Victorian jobs. The Victorian Minister for Industry and Employment, Wade Noonan, has warned the government repeatedly that if they don't relocate some defence building works to Victoria then the Williamstown shipyard will close. The Williamstown naval shipyard facility in Melbourne's west has over 1,000 highly skilled workers already employed on its projects. It has been one of the most effective and competitive naval shipyards in Australia and is known to have world-class facilities. The Victorian government has said that the future of the Williamstown shipyard and hundreds of Australian jobs are in the hands of the Turnbull government. Instead of directing money to a flourishing shipyard, the government admits that the projects it's funding in South Australia might not even have enough workers to support them. Why does the government insist on ignoring Victorian infrastructure? We were snubbed on the submarine announcement in 2016 and now we've been snubbed on defence building. It's absurd.

Meanwhile, the member for Fisher wants us to congratulate the government for encouraging Australian local small businesses to supply defence materials. From what I can see, this government is actually giving countries like Spain $13 billion in defence materiel contracts across shipbuilding and aviation. That is $13 billion going straight overseas, while Victorians can't keep their jobs. How exactly does the government think this is encouraging small and medium enterprises all over Australia to explore the opportunity to supply products and services for the ADF?

Key companies in the defence supply industry are sharing in Labor's fight for action to invest in our local industry. They want to know why the government doesn't have a greater focus on export in the industry, and why it is not focusing on this as a national mission. Labor understand that we must stand up and fight for the international strength of our defence industry because, if we don't, we will lose industry locally. That's an important point: we will lose industry locally. We want to see a thriving defence industry that gives all Australians a fair go and an opportunity to turn their production into overseas exports. We recognise that there is overseas demand, whether it be from OPVs or elsewhere, and we need to act now to secure a prosperous future for shipping yards like Williamstown. Even the good old Minister for Defence Industry has said that we need to reverse our figures and bring our exports up from 20th in the world. What is he actually doing about it? I will let the minister in on a little secret: just unveiling a defence export strategy doesn't make a difference. You actually have to do something about it. And, yet again, that's the part of his brainwave that this government is missing.

It's all well and good that the member for Fisher has moved this motion. He has been in here, praising the government's record investments in the ADF. But let's believe it when we see it. I certainly won't be holding my breath. It's time the government took real action and gave Australian businesses the opportunity to thrive. There is so much untapped potential in our small and medium enterprises, but if the government continues on this path these enterprises will be crippled. So I say to the government: get it together. Implement your so-called strategy. Until then, it's just a bunch of words on paper which certainly won't save our industry after suffering four years of failure and inaction by a government that is hopelessly divided and couldn't find its way out of a wet paper bag.

Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

I would like to congratulate the member for McEwen on his speech. While it was clueless and totally missed the point, I give him full points for bravery. Who in their right mind from the Labor Party would stand up to speak to this motion and suggest for a moment that the Labor Party has a strong track record on defence? This is a Labor Party that had the lowest spending on defence since 1938—1.56 per cent of GDP. The coalition's plan is to raise it up to two per cent. And so full credit to the member for McEwen for his bravery. If only his facts matched his bravery then he actually might have good cause to stand in this chamber and try to suggest that the Labor Party actually has a good, demonstrable track record when it comes to defence.

As we all know, the world today is in a situation of increased volatility. The uncertainty that is gripping us both politically and economically is throwing up a set of challenges that have led to the Turnbull coalition government investing in a capital program that is the largest recapitalisation that our Australian Defence Force has ever seen. This government is looking at a spend of $200 billion—that's with a B—out to the years of 2026-27. Ultimately, we'll see us reaching that benchmark of two per cent of GDP spend in years far earlier than previously planned, going streets ahead of where Labor had left us at 1.56 per cent of GDP. The hallmark of the government's approach is pulling together three pillars that historically have never worked as effectively as they are today under the leadership of the defence minister and the Minister for Defence Industry. Those three pillars are government itself, the Australian Defence Force and industry. The extraordinary thing about this is that the programs that the government is implementing are allowing our industry here domestically not only to supply content but also to develop deep expertise. We have a situation now where Australian industry is building new industries altogether. We have the creation of high-technology manufacturing companies that are not only starting up but also growing. We have an opportunity now, with the government's spending and pulling together of industry, the Australian defence forces and its own spend, to create a set of capabilities that position us beautifully for export.

If you look across the various aspects of the Australian defence forces, one area that grabs my attention is that of the Army and, in particular, the big Land projects: Land 200 and Land 400. As many people in this House might know, the Land 400 job is currently up for tender, and there are two companies in the bidding for that: Rheinmetall and BAE. Here we again have a situation where the Turnbull government is investing. In this case Land 400 phase 2 is $4 billion to $5 billion for 225 combat reconnaissance vehicles. These are going to be best in class around the world, built here locally. It gives an opportunity for us not only to use Australian steel and Australian technology, based in Australia with Australian workers, but also to build a capability that can then be used to export products, for us to be a net exporter of defence capability, because we'll have a sovereign industry that we previously have not had. That is why Land 400 phase 2 is so important, with phase 3 being an extra $15 billion. Together, that project alone, $20 billion, is the largest in the history of the Australian Army. In the context of potential jobs for Australia, it's larger than Adani. This is an enormous coup. What we have with this government is one that's determined to ensure government money is spent jointly with the Australian Defence Force and Australian industry, and thus I support the motion.

Josh Wilson (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

It's critical for government to get defence expenditure and procurement right for several reasons—firstly, to ensure that our Defence Force is properly resourced to provide for Australia's security needs and to contribute to regional and global security, including through peacekeeping missions. As part of that, it's vital that our service women and men are supported to do their difficult and dangerous work as well and as safely as possible. We also have to get it right because defence expenditure, like all government spending, involves the allocation of scarce resources, making decisions that inevitably come with opportunity costs. The key issue here this evening is the question of how defence spending develops Australian capacity and expertise, creates jobs and builds on what is currently a below-par defence export industry.

Before I say more on that, I want to make a point in passing that there's a strange disconnect or blind spot in this government's approach to national security. There's a lot of chest-beating about defence expenditure reaching the highest level since 1994, but we hear virtually nothing, in pride or in sorrow, about the fact that Australia's international development budget will fall to 0.2 per cent of GNI, the lowest in our history. For a government that puts great stock in its national security credentials, it's bizarre that no-one in the government talks about the relationship between international assistance and regional peace and security. You simply cannot be serious about national or regional security and run down the delivery of well-targeted foreign aid in the way this government has done. You can't be serious about national and regional security while ignoring the looming and steepening impact of climate change. As former head of the Defence Force retired admiral Chris Barrie has said, our response so far to the 'existential threat' of climate change is not good enough.

I'm glad the government has embarked on a naval shipbuilding program, but I'm conscious there is an enormous challenge before all of us if we are to see that occur in a way that meets our strategic needs, provides value for money and leverages defence spending to create a domestic design, shipbuilding and sustainment capability. The fact is Australia performs poorly when it comes to the value of our defence related exports as a ratio of defence spending. Other nations with comparable levels of spending parlay that into export-earning opportunities for their businesses and jobs for their citizens. We do not, and we're kidding ourselves if we think that repairing that imbalance will be easy. On the contrary, what may well be easy, relatively speaking, is for other countries to have a very healthy piece of that $200 billion defence budget, and the evidence of the government's approach to date doesn't give a lot of confidence on that front.

I feel for the member for Fisher. His motion was listed midweek, and on Friday there was evidence given to a Senate inquiry that the defence department chief had personally called the three international bidders who were part of the $35 billion future frigates program to tell them that they don't need to work with local companies. There was similarly concerning evidence given to the treaties committee about the $50 billion Future Submarines. I was very surprised as a member of that committee when we looked at the agreement to find that the relevant provision said the French government, through DCNS, would facilitate the involvement of Australian businesses on an equal basis with French companies. I thought to myself, 'Well, surely it's our money, it's our project; Australian companies ought to participate on a preferred basis, all things being equal,' and I sought to recommend a change to that aspect of the agreement, but government members preferred to merely call on the Australian government to revisit that principle in the detailed contractual arrangements. It does worry me that the high-level agreement between Australia and France on this very costly project was settled in language that set an unnecessarily weak obligation in terms of our industry's participation.

It's pretty clear that there needs to be less self-congratulation from the government and a lot more application to the very difficult challenges ahead. Let me as a Western Australian say that, so far, with regard to support and opportunities for local companies and workers, whether they are companies like Austal or small and medium enterprises like the Henderson Alliance, from their point of view it's been a case of all show and no dough.

Defence spending is serious stuff. It should be discussed in an open, warts and all fashion. It shouldn't be sacred territory. It must always be shaped by a rigorous consideration of our strategic needs. It must be fit for purpose. It must be determined and supervised by a civilian government free of any inhibition that regards defence as an area of decision-making in which only people with defence experience can fully participate. Finally, if we're serious about national security, we have to reconcile the current disconnect between our policies and expenditure on defence and our policies and expenditure on foreign aid and climate change.

Nicolle Flint (Boothby, Liberal Party) Share this | Link to this | Hansard source

I'm pleased to support this motion moved by the member for Fisher, and in doing so I would like to highlight the unprecedented transformation that these defence projects will bring to the South Australian economy.

After the Rudd-Gillard-Rudd years, during which defence spending was cut to the lowest levels that we'd seen since before World War II and not one Australian built ship was commissioned, the defence industry needed an urgent rethink and a government that was actually serious about our national security and keeping our defence personnel safe. This is what Australians now have with the coalition government. We've taken on board the recommendations put forward in the defence industry white paper and we are implementing the nation's most comprehensive and forward thinking defence industry plan, which will not only keep Australians safe but also resurrect our industries in manufacturing and kickstart innovation across the country.

The coalition has a lot of credibility in this space, and I'd like to mention the extraordinary work of my South Australian colleague Senator David Fawcett, who was integral in developing the case for Australia to have fundamental inputs into defence industry capability. This is the idea that, for the sake of our national security, there are a range of industrial inputs which are important to build and sustain right here in Australia. I'm grateful to Senator Fawcett for introducing me to excellent South Australian based businesses like Saab, SAGE Automation and Cornell Design so I could see firsthand the benefits that defence contracts deliver to private sector companies and also to private sector jobs.

It is not just direct defence work that supports jobs. It's the technology, the learning and the innovation that these companies can then apply to other problems in the private sector and the civilian world that deliver additional value to our economy and jobs as well. To support the defence work beginning in South Australia, we have opened the Centre for Defence Industry Capability and launched the Defence Innovation Hub. These will facilitate close collaboration between the private sector, Defence and AusIndustry to ensure local businesses of all sizes are seizing the opportunities to participate in our record $200 billion investment in defence.

A key part of the strategy is the Naval Shipbuilding Plan, and we have commissioned 54 vessels to be built in Australia over the next decade. We have launched the Naval Shipbuilding College, because we have to provide 5,000 workers by the mid-2020s in naval shipbuilding. We are doing the sustainment here and we are doing the maintenance here, which will create thousands of local jobs. We need to find those skilled people apprenticeships in welding and fitting and turning, because we're building the defence industry in this country like it has never been built before.

The shipbuilding plan will give Australian businesses opportunities to take part in delivering defence contracts and transfer the knowledge, technology and skills they develop into other areas in our economy. This will assist in the expansion of businesses into new markets, allowing them to competitively pursue lucrative export opportunities. Through our initial investment, we will be enabling local businesses to build their industrial capabilities and practices so they can compete globally and build our defence export capacity.

This will be a game changer for South Australia's economy. Between the nine future frigates, the 12 submarines and the offshore patrol vessels, the defence industry is booming in South Australia. In fact, in the last quarter defence spending jumped a massive 23 per cent. In July, construction for the upgrades to infrastructure began at the shipyards at Osborne in Adelaide, signalling the beginning off our bright shipbuilding future. There will be 2,000 jobs created by this project alone. Not long after the frigate build begins, work will start on the 12 submarines. This $50 billion investment in our nation's defence and defence industry will create a total of 2,800 jobs in my home state.

But we must understand that this investment would be at risk if the opposition were to take government. Our achievements in defence capability policy stand in stark contrast to the actions of those opposite when they were last in government. They failed to commission a single naval vessel from an Australian shipyard during their entire time in office, which led to the valley of death. During their time in government, Labor cut $18.8 billion from the Defence budget. They delayed 119 defence capability projects, they reduced 43 projects in scope and they outright cancelled another eight, risking critical security and capability gaps. Their defence spending fell to 1.56 per cent of GDP. Unlike those opposite, we will always stick by our Defence Force personnel and have our national security as our top priority.

Milton Dick (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

As we know, the defence of our great nation has long been one of bipartisanship in this place, although listening to the member for Boothby I'm not sure if she's as committed to that as every other member in this place is.

Earlier this year, as part of a parliamentary delegation that included the member for Fisher, I had the opportunity to spend time with members of our defence forces, and I thank the member for Fisher for placing this motion on the parliament's agenda tonight. While not agreeing with the intent of every word in this motion, I think it is always important for us to talk about support for our defence forces. I was fortunate enough to spend nine days in the Middle East with our troops. This included spending time at bases in Afghanistan with the men and women of the ADF to see firsthand the amazing work they do and learn about the equipment they use. The experience left me with a greater respect for Defence Force personnel and the incredible sacrifices they make to serve our great country.

Currently, there are 1,700 ADF personal deployed in the Middle East. Our Defence Force personnel remain actively involved in advising, assisting and training Iraqi security forces in Iraq; training and advising the Afghan National Defense and Security Forces in Afghanistan; and maritime security operations throughout the region. Our troops not only do an incredible job representing our country but also are working side by side with the local forces to train and equip the Afghan army. This includes working with Afghan mentors and interpreters to better train the local army.

Above all else it was clear to see the professionalism and commitment of our serving personnel on display 24/7. Our troops are the best in the world and they are incredibly dedicated to serving our country. In our local community there are many ADF families, and I know it must be tough to be separated from loved ones whilst they serve. The reputation for the ADF extends beyond our borders to accompanying nations who also have personnel serving in the region. Members of our ADF put themselves at risk every single day, which is why it is important that we provide our troops with the best equipment available.

I note the member for Fisher also spoke about encouraging small- and medium-sized enterprises all over Australia to explore the opportunity to supply products and services for the ADF. Both of these elements will be realised if and when the government awards the Land 400 contract to Rheinmetall to build their Boxer CRV vehicle in Queensland, my home state, or more specifically in Ipswich. As newly elected Mayor Antoniolli said, Ipswich has a proud military history, with 7,500 defence workers in the city. I was very pleased to see last week the front page of our local paper, The Queensland Times, with the headline 'Ipswich declares war on unemployment'. It said that a $5 billion military contract would bring 350 jobs right across our region. Not only is the Boxer CRV an outstanding vehicle for the Defence Force to serve and protect our troops, but the project would also, as I said, bring some 300 to 400 jobs to the Ipswich region if the bid was successful whilst at the same time pumping more than $5 billion into the state's economy over the next 10 years. I was delighted to attend the announcement of this significant project alongside my state Labor colleagues, the Minister for State Development, Anthony Lynham, and the Premier of Queensland, at Archerfield Airport in July where we were treated to seeing the Boxer CRV on the airstrip.

Rheinmetall have committed to establishing an $80 million manufacturing centre in my home city of Ipswich, with products flowing not only to the Australian Army but right across the world. With news last month that, sadly, two major businesses in the region would be closing their doors, a decision to give Rheinmetall the Land 400 contract would be an announcement truly welcomed by the Ipswich community. If the LNP is serious about investing in Queensland, if this government is serious about listening, and with a record majority of members from Queensland, its federal members shouldn't be giving any more lectures—I want the government to get on with the job and choose Queensland. Companies have been selected to deliver a range of products and services right across the state to enable delivery of the Boxer CRV. I acknowledge the state government for the enormous amount of work it has done under the leadership of Premier Anastasia Palaszczuk and Minister Lyneham, who have been working so hard to attract Rheinmetall to Queensland, to make sure that this becomes a reality. The confidence that Rheinmetall is showing in Queensland is a vote of confidence in Queensland's small- and medium-sized businesses. This supports the Palaszczuk government's focus on attracting more jobs and more industry to Queensland. It is projects like these that bring invaluable jobs and opportunities to local businesses. I commend Rheinmetall and the Palaszczuk government on their ambition to bring this project to Ipswich and I look forward to seeing a positive announcement later this year.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

The time allocated for this debate has now expired.