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

I'm delighted to stand in the chamber today to support the member for Fisher with this motion, because I don't think there are many areas of policy that demonstrate the difference between this coalition government and the Labor Party like that of defence. There is a $200 billion recapitalisation program that is starting to make up for years of absence in this policy space. We all know there is no greater responsibility for government than the protection of its people—the safety and security of Australians. As this motion notes, we need to ensure that not only are we protecting Australians but we also have an industry that is sustainably doing so over the longer term. And that is why our Defence Export Strategy aligns perfectly with our defence industry strategy—about the need for us to build sovereign capability, capability in defence which is owned by Australians and defence products that are manufactured by Australians, so that as time goes on our Defence Force is truly a strong, sovereign Defence Force, a Defence Force that has an industry behind it with the intellectual property owned in Australia by Australian based companies. Only if we own the IP, the intellectual property, can we ensure that we are always first in the class, best of breed with Australian product.

This motion also goes to the importance of small and medium enterprises in that industry supply chain, and it is absolutely vital. Let me use as an example the recent announcement by the Australian government of the Project Land 400, which was awarded to the company Rheinmetall Defence Australia. This contract, which is for the building of 211 combat reconnaissance vehicles, is really in the sweet spot for where the Australian government wants to see defence industry continue. It's in the sweet spot because, firstly, we are talking about the single best vehicle in the world, the vehicle that will provide the greatest safety to our troops on the ground. There are many people who have loved ones out there on the frontline. Should I ever have a loved one of mine on the frontline, I'd want them in one of these vehicles because they're the best.

Secondly, it aligns with our policy and our strategy because the intellectual property of key components of this vehicle, including the turret, is going to be transferred from Germany to Australia. It will be owned and domiciled here in Australia. When the vehicles are exported to the rest of the world, as other countries, including our allies, want to have the best 8x8 CRV in the world, guess where they will be coming from? Australia. Do you know where the steel is going to be made for that vehicle? The steel is going to be made here in Australia. We're talking level 6 steel, level 6 protection grade. It was built only in Europe, until this contract. Because of the incentives by the Australian government strategy, we will have steel built in this country and exported from this country which is equivalent to the best in the world when it comes to the protection of troops.

What's more, we have small and medium enterprises right across the country—in particular, in regional areas of Queensland—that will be feeding their products and services into this contract—a contract worth $5 billion with a maintenance estimate of $10 billion. That's $15 billion that will go to businesses residing in Australia. When each of those small and medium enterprises joins that supply chain, it's not just jobs that will be created but long-term careers for all the people who join those companies. Those companies themselves have their own intellectual property, and, when they join such supply chains, their intellectual property will grow and refine. That is how we as a country develop a sovereign expertise, and that is why this government is so right with its policy when it comes to defence industry.

Justine Keay (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to be able to speak on this motion, because in my state and electorate there is bipartisan support for the opportunities arising from the defence industry, as evidenced by a motion that I wrote that was presented in the Senate and signed by Tasmania's Liberal and Labor senators. It was carried in the House of Representatives and spoken to last year—obviously only spoken to by Tasmanian Labor MPs, because there aren't any Tasmanian Liberal ones.

The honourable member for Fisher's motion—unfortunately, the member isn't speaking on this motion—highlights that more needs to be done when it comes to investment in Australian defence industry. As the member states in his motion, Australia ranks 13th in the world for defence expenditure but is only 20th when it comes to defence exports. When it comes to this area, the government needs to look no further than my state of Tasmania and my electorate for some of that capability.

The Australian Maritime College, or the AMC, has researched and developed autonomous underwater vehicles, or AUVs. In August last year, the first of these AUVs was launched to support Australia's Antarctic program. The AUV is capable of diving up to 5,000 metres and operating underneath the ice. It is not too big a stretch to see how this research could transpose to the defence sector. The AMC has also secured a $3 million three-year research grant into marine research in partnership with the Multidisciplinary University Research Initiative run by the US Department of Defense.

In southern Tasmania, there are a number of industries with a defence capability in and around Prince of Wales Bay on the River Derwent. Incat has sold catamarans to the United States Navy. Taylor Brothers, who are specialists in marine accommodation, have successfully won contracts with the Australian air warfare destroyer project and previously provided services to the Royal New Zealand Navy.

Specialist antenna suppliers Moonraker Australia has also been awarded a contract for the new Australian destroyers. In November last year, Liferaft Systems Australia, who design and manufacture marine evacuation systems and life rafts, won contracts to support the United Kingdom's type 26 global combat ships. They are also suppliers to the Royal Navy's Queen Elizabeth-class aircraft carriers. So, while we are exporting from Tasmania to other countries' defence capabilities, I'm sure the Australian government could ensure that Tasmanian manufacturers do more in our own country.

In my part of Tasmania, there are a number of local manufacturing businesses that have the capability to deliver defence product. Local manufacturer Elphinstone Group partnered with Elbit Systems to construct new combat reconnaissance vehicles as part of the Land 400. While the bid was not downselected, sadly—with most of it Australian content—for the next stage, it did demonstrate the capability that exists in Tasmania and at Elphinstone. It certainly put Tasmania and my region on the defence manufacturing map.

Another local manufacturer is Direct Edge Manufacturing of Burnie, which produces high-quality sheet metal manufacturing products that are exported throughout the world. Direct Edge Manufacturing has also completed maritime projects for the Tasmanian government's port authority, TasPorts, and recently it was announced that Rheinmetall, who won the contract to construct the Land 400 combat reconnaissance vehicles, will be using Direct Edge as one of their small- to medium-sized businesses in the project.

Another highly-skilled local manufacturer also in my electorate is Penguin Composites. They have separate facilities for recreational vehicle assembly, metal workshops and fibreglassing. They have built igloos for Antarctica and worked with the Australian Maritime Safety Authority on the construction of small lighthouses. In October last year, Penguin Composites won a three-year $8 million contract with Thales Australia to build bonnets and various parts for the new Hawkei protected army vehicles.

It is clear that more work needs to be done to bridge the gap between Australian manufacturers and the defence materiel that we need and, of course, the defence materiel that we can export. I urge this government to continue to look towards Tasmania and my region when it comes to defence capability. I know the Tasmanian Liberal senators and all the Tasmanian Labor senators and members are on the same page. We have the skills, the capability, a stable workforce and an enthusiastic and innovative university and maritime college. We are geographically secure. We need those jobs. They are long-term and sustaining jobs. We just need more opportunity to show it. Thank you.

Michelle Landry (Capricornia, National Party) Share this | Link to this | Hansard source

When the government spends on defence, the whole country benefits from not only increased national security but a stronger and more diverse economy. My electorate of Capricornia is home to one of the nation's premier military training facilities. Shoalwater Bay has played a central role in Australia's training and war-gaming programs since the seventies and is revered across the ADF and our allies as a superb facility for simulating real combat situations.

This facility and the whole region are set to benefit from a close to $1 billion joint investment between the Australian and Singaporean governments. I, for one, am thrilled to see our local businesses working to ensure that they get their fair share of this. The money is being invested to grow the capabilities of the Shoalwater Bay facilities in a range of ways by increasing the area it covers and building new infrastructure on the site to make it more usable. I congratulate Minister Payne on her resolute intention to see the bulk of the work in this facility upgrade carried out by local subcontractors.

Also, so-called primes will contract the whole project. The Department of Defence has worked tirelessly to ensure local content goals are achieved. This is not a simple task and has required work on the prime contractors to ensure that they are really engaging with locals, and on the local subcontractors to ensure that they are setting themselves up to be able to do the work.

Due to the complexity of this suite of relationships, last year, with the help of local stakeholders, I formed the Capricornia Business Advisory Alliance Committee. This committee, which includes representatives of local government, the defence department, economic development agencies and local businesses, helps work through the issues at the heart of this huge project and is designed to provide feedback on how these relationships are forming. I believe this committee has been hugely successful so far in illuminating some of the shortfalls and opportunities posed by this project, particularly with respect to how the big contractors are interacting with local subcontractors.

While the intention of this government is undeniably in favour of having as much work as possible carried out by local subcontractors, it is clear from feedback that this is not always the desire of the prime contractors. A number of local contractors have put forward their concerns that they may be used as padding for tenders by primes essentially using their businesses as a front for the submission, with no real plans to use them when the work is on. This would represent an abject misdirection of the government's investment, and I, for one, call on those companies tendering for the Shoalwater Bay contract to be fair dinkum and use local contractors. I know the locals will be more reliable and more economical than their blow-in counterparts. I am determined to see this major project deliver real jobs to the region, and the only way this can be achieved is if locals get to do the work. I am serious about this and will continue to work closely with the minister to see that the government's local procurement targets are met by Central Queenslanders.

I want to congratulate the Rockhampton and Livingstone councils on their continued effort to see these communities profit from the expansion of Shoalwater Bay. Congratulations must also go to Capricorn Enterprise on the effort they have put in for their members in negotiating with the primes to see that their members, all local businesses and CQ get a serious crack at the work on offer. Without the work of these organisations, both public and private, the impact on the CQ economy would be minimal. As it is, we all look forward to the tender being awarded to a contractor with a serious commitment to using local contractors. Whoever is able to secure this major contract can rest assured, knowing I'll be on their case to ensure Capricornia's local businesses get what they deserve. With the recent announcement that Queensland will be the epicentre of the Land 400 project, I look forward to the state's reputation continuing to develop as a defence industry powerhouse, in the same way it has developed within the resources and agriculture industries. Regardless of where the work is done, the focus must be on delivering through small business and local jobs.

Nick Champion (Wakefield, Australian Labor Party, Shadow Assistant Minister for Manufacturing and Science) Share this | Link to this | Hansard source

It's a great pleasure to speak on defence matters in the parliament. I'm very fortunate in Wakefield to have the Edinburgh Defence Precinct, with a number of Army units and RAAF units, industry and a significant representation of white-collar public servants, and of course the DSTG, along with the Port Wakefield proof range; north of it, Cultana and Woomera; and, south of it, the Keswick Barracks.

South Australia has always been a defence state, but, increasingly, it has a larger and larger defence footprint. This is due to, in part, good planning by the national government and, in part, good planning by the South Australian government and Defence SA. It is a decision that was deliberately made by Premier Rann, was continued by Premier Weatherill and I hope will be continued by Premier Marshall. Defence and its planning, the defence estate and its planning, and defence procurement and its planning should have a strong bipartisan focus and a strong recognition that when we use the Defence Force, in the unlikely and unwanted scenario where we might have to use our Defence Force for war-making or for defence purposes, we will do that as Australians and not wearing our Labor, Liberal or other party caps.

In many ways this motion is a self-congratulatory motion from the government. A little bit of that is understandable, but we really need to remember that defence procurement in particular needs to be undertaken with small-p politicisation, rather than big-P Politicisation. What we should be aiming for is strong bipartisanship and high levels of trust between government, the Public Service, industry, unions, and all stakeholders like state governments and their instrumentalities, because when we're dealing with procurement decisions we're talking not just about multigovernment decisions but about multigenerational decisions. When I say 'multigenerational', I mean that today's politicians might make a decision that the next generation of politicians—Labor, Liberal or perhaps something else—will have to deal with.

We have to be very careful, I think, of engaging in the sort of partisan commentary that the member who spoke previously gave. I can remember seeing partisan commentary about Kim Beazley and about dud subs, something that has plagued our submarines. That commentary was immensely damaging to our sovereign capability in terms of submarines. Frankly, we saw it when Brendan Nelson was opposition leader, too, over the Seasprite scandal. So we don't want to use defence procurement in this place in an irresponsible way, because all procurement decisions have problems. All defence procurement has challenges. We only have to look at the F-111 for an example of that. It is something that underwrote our security for a very long time indeed but was mired in controversy in the beginning.

I hear the members opposite from Queensland talking about Land 400, and it's interesting to hear them make commentary about that. I would have thought a third government speaker could have been the member for Corangamite. She might have come in here and given a decision, because on Land 400 the government didn't just match itself against the opposition, the states or minor parties; it pitted itself against itself. It pitted one lot of backbenchers against another, and I think that that was a particularly poor way—

Government Members:

Government members interjecting—

Nick Champion (Wakefield, Australian Labor Party, Shadow Assistant Minister for Manufacturing and Science) Share this | Link to this | Hansard source

Well, I'm just telling you the facts. It was a particularly poor way of conducting itself. In fact, it took that procurement decision to a new and ridiculous level where you had members of the same government opposing tanks and other things. We have a special responsibility in this place to make sure that these things aren't politicised.

Government members interjecting—

Well, we do have to make sure. I'm just telling the facts. These things happened. The member opposite might want to interject because I'm raining on his day, but these were the facts. This is a government which has maybe come to the right conclusion, but the pathway has been very rocky indeed, and I think we should conduct ourselves in a more mature and reasonable manner.

Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.

Sitting suspended from 12:58 to 15:59