Madeleine King (Brand, Australian Labor Party, Shadow Minister for Consumer Affairs) Share this | Link to this | Hansard source

I am pleased to rise and speak today on this motion moved by the member for Fisher. As an MP representing the electorate with the largest base of the Royal Australian Navy in the country, I'm very happy to have this opportunity to discuss the important links between defence and small business. I'm glad the member for Fisher has taken time out from his obsessive compulsion to attack the workers of this country and the trade union and labour movement to focus on a more productive and honest debate, such as this one, rather than on his strange predilection for standing up in the chamber to assert wild inaccuracies about the employment history of Labor MPs.

Defence has long been a largely bipartisan issue in Australian political history. Both Labor and the coalition see the value in maintaining, strengthening and modernising the Australian defence forces and our national defence capabilities. As well as being the local representative in this place for many members of the Royal Australian Navy and their families, I'm also the shadow minister assisting in small business, and how small business can participate in defence contracting is very important to me in this role.

Fairness, stability and balance are at the forefront of the ALP's approach to policy-making regarding defence. It is why we have raised concerns regarding some aspects of the government's multibillion dollar investment in Australian defence capabilities. It is why we on this side of the chamber believe that due process and correct tendering processes should be paramount in regard to this investment, as opposed to short-term electoral pork-barrelling, which is the eternal temptation of governments under pressure. I'm sure those opposite, on the government benches, share this view, and I particularly look forward to working with WA members of parliament in the government in securing a greater, more secure and equitable share of the overall Defence spend to ensure that this is a truly national endeavour. As all Western Australians know, the Australian Marine Complex in Henderson has extraordinary capacity in terms of shipbuilding and maintenance capacity as well as extensive links to small and medium businesses in the adjacent industrial estate. The capacity is there, and it should be applied.

Making sure small business, a core of the Australian economy, is able to tap into this Defence investment is a cause I'm very happy to support through the Commonwealth initiatives such as the 2016 Defence White Paper and the Centre for Defence Industry Capability and the Integrated Investment Program. However, while I'm sure well intentioned, ease of access by small and medium enterprises to Defence sites and contracts does remain difficult and sometimes murky. Of course, I understand security concerns and regulations; however, it should not be overly difficult to tap into the system as a small business. I've heard some of these concerns raised in my electorate. I've heard about the difficulty of getting on a panel; having to supply an immense and sometimes mind-boggling list of records and documents just to get there; and the difficulty of work once you are on the panel in having to comply with regulation after regulation and continually dealing with sometimes distant multinationals with a small group of contractors at the top end. Sometimes these things can be overwhelming to small and medium enterprises. These are issues that SMEs and microbusinesses are talking about regularly, and it would do us all well as members of parliament to listen to their concerns.

The investment in our defence capacity and capability is welcome, and with it there must be a focus on Australian capacity and capability. There is clear evidence of this happening, particularly in my electorate of Brand, and I do welcome that. Only two week ago, I was at HMAS Sterling as part of a week-long ADF parliamentary program and have seen how Defence are utilising local contractors in the extensive upgrades and modernisation of the base. I was very pleased to be briefed by the ADF on how it is seeking to and making use of local and proximate small business contractors to carry out the largest works program on Garden Island for some time. It's a hive of activity at the moment, and that's very pleasing to see. Not that you'd expect anything else, but all reports are of the ADF and contractors working excellently together with superior processes in place to manage a very significant and welcome program of upgrades to the largest and most strategically significant naval base in the nation.

I was very pleased to participate in the HMAS Sterling Walk to Work and family fun day a couple of Fridays ago as part of the ADF program, and I was really happy to see that many of the local contractors were invited and attended with their families. They took part in the nearly seven-kilometre walk on quite a windy day over the Garden Island Causeway Bridge, and they mingled with all the ADF personnel and their families who live in the nearby district of Rockingham and are stationed on the base.

The community and family ties between the base and the Rockingham-Kwinana area have been present for as long as I can remember, which is a fair while. I was born nearly five years before the base was commissioned, and earlier this year I was happy to be at its 40th birthday celebrations on the base itself. I'm happy to see the link between small business, the community and the ADF happening on HMAS Sterling.

Michelle Landry (Capricornia, National Party, Assistant Minister for Children and Families) Share this | Link to this | Hansard source

I'd like to begin by thanking the member for Fisher for raising this motion. The growth our defence industries are experiencing has a direct impact on the local economy of central Queensland. There can be no more important policy areas than the defence of our nation and the wealth of our nation. Our government is committed to both. By delivering over $200 billion to the development of our defence industry, we are not only making Australians safer but helping develop a vibrant, sustainable industry to create jobs and wealth for thousands of Australians. This investment can be seen in no finer example than in the expansion and upgrading of the Shoalwater Bay military training area in my electorate of Capricornia.

Shoalwater Bay has a proud history as one of the nation's most important training grounds for the military forces of Australia and our closest allies. For over 25 years, Singapore has been engaging in military training with Australia at Shoalwater Bay, and great ties have been created between CQ businesses and many of their Singaporean counterparts. The influx of Singaporean personnel directly flying into Rockhampton from Singapore has become part of the annual cycle of Rockhampton, while biannual training operations with US military forces provide a further engagement and interest point for the region, the economic stimulus of which is impressive.

As part of the relationship with Singapore, we, as a coalition government, announced more than $2 billion to upgrade and develop military training grounds. Luckily for Central Queenslanders, one of these was Shoalwater Bay. Roughly $1 billion is being invested into Shoalwater Bay to take it from being a top quality training ground to a world-class facility. This includes expanding the boundaries, increasing capacities and developing entire mock cities for urban warfare training. Shoalwater Bay will become one of the most all-encompassing, flexible, capable training facilities going around, providing our armed forces with the best shot of keeping ahead of the pack and helping keep Australians safe.

The dramatic benefits extend far beyond the increased capacities of our Defence Force, though. It also means a far more capable and resilient local economy. Having just announced Laing O'Rourke as the managing contractor for the ASMTI Shoalwater upgrades, a great deal of momentum is building throughout the local business community, with discussions and negotiations underway for the myriad of subcontractors. Local content was a major priority for the awarding of this tender, and I have to congratulate former Minister for Defence Payne and current Minister for Defence Pyne for pushing this as a major requirement throughout the negotiations with their departments.

This represents a new approach for Defence, but one that helps us as a government fulfil the dual priorities of securing our nation's economic and physical security. This approach has led to the awarding of the management contract to a tender with some 83 per cent local content and a relationship with local trainer CQ University to help train local workers for the roles of this major project. This will provide a lasting legacy for the region, with hundreds of locals provided with skills to take them anywhere they wish in their careers. With more than $4 in every $5 of the project being spent through local contractors, we can expect this section of the project to deliver some $660 million to the local economy in a very lasting manner.

This hasn't happened by accident, and the work of local advocates cannot be underestimated. The Capricornia Business Advisory Alliance, a committee we set up to give the local business community a direct voice to those in Defence making decisions, consists of local government reps, peak body Capricorn Enterprise and local business owners. The committee worked effectively and pragmatically to deliver the important messages to Defence, and, perhaps more importantly, Defence listened. I look forward to seeing this project delivered for my region, and I firmly believe the direction our government has taken will see Australia's physical and economic security continue to strengthen for decades to come.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I also rise in support of this particular motion, and I do so because businesses that employ many in the local community and that contribute so much depend on contracts such as these. But, first of all, I want to pay tribute to the men and women in the Defence Force who protect our country. We all know that, if it wasn't for them, we wouldn't have the great country that we have today.

We have a safe, secure and prosperous country, so it only makes sense that we would also want a safe, secure and prosperous manufacturing sector in Australia. Local businesses create jobs, invest in industries et cetera; they're an investment and a tax base for reinvestment in things like infrastructure, schools, hospitals, ports, rail and roads. But what has been going on in this place is that we've got a government that's trying to take a victory lap while it makes some terrible decisions that send jobs overseas. And it's especially hard to listen to people opposite talk about their support for local jobs and the Defence Force when this government makes procurement decisions that send jobs overseas.

I've got a great example of this. In 2014, a great company in my electorate of Hindmarsh, Rossi Boots, lost its bid to provide boots to the ADF. We're talking about a local, family-owned company that provided boots to our World War I soldiers. They've been around for generations, and for a long time they have done the right thing by this nation. They could move offshore to places like Fiji, China or Thailand, but they don't because they've got a commitment to South Australia. They know they could cut their costs if they went overseas, but they don't because they are absolutely committed to creating more jobs and creating great products for our nation. It's very sad when the government doesn't give back that same respect that they get from small companies and businesses. This is a company that produces wonderful boots. They lost the contract to someone in Indonesia who won that government Defence contract and was provided the tender, which is very sad when you've got a great, iconic company like Rossi Boots that employs people here in Australia in South Australia that missed out.

What governments need to look at are the benefits of keeping businesses in Australia. We need governments to calculate the taxes and revenue benefits of employing local people, with those wages that those people earn being reinvested back in the community as part of the procurement process. We don't look at those things, sadly and unfortunately. If we did, of course, we wouldn't have walked away from GM-H. We know that many nations across the world that have assembly lines in car manufacturing subsidise that industry. They do so because it value adds to the economy. They do so because they know, for every job, there's another 40 in manufacturing that are produced. As I said, walking away from GM-H was an absolute disgrace. South Australians remember it. We should have done more as the government in this place to ensure it continued. We're still feeling the impact of that decision.

You can imagine what a benefit having a bootmaker in my electorate win the Defence contract would have been to South Australia. Rossi Boots weren't looking for a handout; they were after a level playing field. That's all they wanted—a level playing field. You've got a great family company founded by Arthur Rossiter, who started the company in his backyard tin shed, and taken over by the late Dean Rossiter. They supplied boots to the Australian Army during World War I and supplied 110,000 pairs of boots to soldiers in World War II, but they didn't even get a level playing field to compete with a product produced overseas. Our top tax dollars are at work stimulating overseas economies.

When I look at the motion before the chamber today, after seeing firsthand what happened to a local business in my electorate, the government shouldn't really be congratulating itself; it should be taking a look in the mirror. We need to do all that we can to create jobs, and one of the ways of doing that is by ensuring that we give our local companies a level playing field in procurement so they can, basically, win contracts and employ local people who pay taxes here and spend their money here in this economy. The hard work that has been put into the creation of this small company, Rossi Boots, and their commitment to South Australia is something that is exemplary, and the least we can do is give them an even playing field to compete on and win a Defence contract.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

As the representative for Goldstein, it's a great privilege to be able to speak on this important issue and support the resolution by the member for Fisher. Our modern defence capability is the sum of multiple individual efforts across industry and government. Small and medium enterprises are the foundation of Australian innovation, Mr Deputy Speaker Laundy, and I know you know that better than anybody. I have so many different Defence contractors and companies and those who supply goods and services to Defence companies all across the south-east of Melbourne, many the legacy, originally, of the car-manufacturing sector. There are thousands of businesses that employ even more Australians in pursuit of, as part of this strategy, the defence of the Commonwealth. We know that these business operators are brave individuals who are patient and motivated to keep pushing the envelope so much to be able to deliver the defence industry Australia needs.

One example in the Goldstein electorate is Task Management Solutions in Brighton East, an engineering consultancy firm which undertook $350,000 worth of work for Defence last financial year—a simple defence company being able to provide the engineering services to secure the nation. The defence industry will form a part of our economy's shift towards more service and manufacturing exports, particularly those with higher-valued outputs. The Australian industry cannot sustain itself on the needs of the Australian Defence Force alone. New markets and opportunities to diversify are required to help unlock the full potential of our defence industry to grow, to export, to innovate and to meet, in the process, Australia's future defence needs.

Exports will provide our defence industry with greater certainty of future investment and support for high-end manufacturing jobs for Australians for generations to come. We know what the strategic objectives of this strategy is. The strategic goals over the next decade, to 2028, are to strengthen the partnership between the Australian government and industry to pursue defence export opportunities; to sustain Australia's defence industrial capabilities across peaks and troughs in domestic demand; to enable greater innovation and productivity in Australia's defence industry; to deliver world-leading defence capabilities; to maintain the capability edge of the Australian Defence Force; to leverage defence capability development for export opportunities; and to grow Australia's defence industry to become a top 10 global defence exporter.

That has always been one of the enduring strengths of a free open market economy. It's not just the opportunity to be able to grow your exports, though that is good, and it's not just the opportunity to be able to build a domestic industry to meet that demand, which is also good; it's also the power to transfer technology across boundaries so that we can always be at the cutting edge—not just at the cutting edge of being able to produce goods but also of being able to import them into our domestic processes—so that Australians, from whatever sector and whatever industry, even those that are allied to the Defence Force sector, are in a position to have world-class technology integrated into their own processes. What we know from the world over—there's been lots of analysis in the United States and in Israel—is that, when you have a strong defence force capability industry, there are allied benefits down the road for other allied industries through the skills and technology that are developed, maintained, and transferred and which can be harnessed for other domestic civil activities.

The strategy that this government is implementing provides one of the foundational pillars for the future of Australian industrial growth into the 21st century. It's to provide the opportunity to foster the minds and the skills to be able to build the manufacturing sector of the future and the service based skills, the technology skills and the engineering skills to be used not only in domestic defence but also to aid other industries critical to this nation's future success. That's the success of this government. This government has its policy priorities right.

Lisa Chesters (Bendigo, Australian Labor Party, Shadow Assistant Minister for Workplace Relations) Share this | Link to this | Hansard source

Bendigo has a proud defence manufacturing history. Hopefully, we'll also have a proud manufacturing future if we can get the policy settings right at the federal government level. Bendigo is home to Thales, which, prior to becoming Thales, was an Australian defence industry facility. We manufacture the Bushmaster and the Hawkei at the Bendigo Thales facility. It took this government many years to finally sign the new Hawkei contract, but it eventually did. The $1.3 billion contract with Thales will produce 1,100 Hawkei vehicles in Bendigo as well as a thousand companion trailers.

What is important about this particular defence contract is that, while it secures 170 direct jobs in the Bendigo region at the facility, it is also expected to create an extra 60-plus jobs in the supply chain. One of the true credits to Thales is the way in which they've worked with the Victorian and Australian supply chain industry to supply into the Hawkei. On an inspection of the Hawkei, the workers will proudly tell you where the components have come from—where the seats, the seatbelts and the dashboards have come from, even where the mufflers have come from: specially designed up the road in Long Gully. That contract with a small supplier in Long Gully, for 1,100 vehicles, is a base contract for that business and secures their workforce now and into the future.

Whilst Bendigo is very proud of what we've achieved with the Hawkei and the Bushmaster, we are equally proud of ADA, who supply Defence uniforms to the government. These are the combat uniforms. You can imagine the disappointment of the predominantly female workforce in Bendigo that their contract for the dress uniforms wasn't held as an equal priority with the Hawkei contract under this government. This government, for cost reasons, went value for money and offshored these jobs. Rather than producing the uniforms in Bendigo, creating more jobs in the supply chain, creating more jobs at the Bendigo ADA manufacturing facility, the government offshored these jobs. So people in Bendigo, like people in many regional towns in Victoria, are incredibly sceptical when it comes to this government and motions like the one we have before us. There is a lot of rhetoric but very little in the way of delivery on the ground when it comes to all of Defence manufacturing. The government have their pet projects and ignore others.

That brings me to highlight how the government have failed to ensure, when they talk about value for money for these projects, the value of having the supply chain jobs. Rightly, many in Thales and the Department of Defence were very concerned about the recent release of the Auditor-General's report into the Hawkei vehicle. The reason I highlight this is that it goes to pretty much the heart of the problem with the government. They say that they support small business and Defence government contracts yet fail to put that in their procurement procedures. So, when the Auditor-General did their job and reviewed the Hawkei and the procurement process and whether it achieved value for money, the Auditor-General did not assess to see whether having local manufacturing jobs, local supply chain jobs, was in fact good value for money. As a result, a scathing report was handed down criticising the Hawkei project. It's just disappointing that the government can't get the policy settings right. It's disappointing that this project, which secured jobs in Bendigo, in the region, in the manufacturing supply chain, got such a black mark against it because the government didn't audit for that. The government doesn't really appreciate that it is good value in our regional communities to have people employed in our Defence manufacturing supply chain. If the government were really serious about small business and Defence procurement contracts, then they would say that having local jobs, local industry, is value for money.

Kevin Hogan (Page, National Party) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.