Gavin Marshall (Victoria, Australian Labor Party) Share this | Hansard source

Approval has recently been given for the private company Thales to buy out Australian Defence Industries Limited. The Australian owned 50 per cent of ADI Limited will be purchased by Thales from Transfield. So now we have a company, Australian Defence Industries Ltd, which provides a number of our defence needs, being wholly owned by interests outside Australia including a foreign government. I wonder aloud why it should continue to be named Australian Defence Industries, given it is no longer Australian; perhaps it should be renamed ‘Foreign Defence Industries Supplying Australian Defence Consumers’.

With 32 per cent of Thales being owned by the French government, we see the remarkable situation where another nation owns a direct share of our defence interests. I have been contacted by many of my constituents who seem to be asking the same questions and making the same points surrounding this takeover bid. Amongst these are employees of ADI Limited, who have a keen interest in the future of regional industry and our national interest. People have continually asked me why the federal government continues to use private companies to provide basic army supplies with so many cost overruns and failures in projects. It seems that the government makes a habit of ignoring the realities.

People are now asking why, on top of this, we would be allowing foreign companies to control supply and skills for one of our most crucial institutions—the armed forces. Perhaps I should remind the government that an army cannot get very far without any ammunition like ADI currently provides. Australian Defence Industries is unlike other privatised government business enterprises in that it has unique capabilities essential to the defence of our country. Its workforce carries a skills base which, once lost, cannot be replaced in the short term—a skills base built up over decades of producing our Defence Force requirements; capabilities and skills which are desirable and of commercial value in peacetime but are absolutely essential in times of conflict.

This whole episode reminds me of the short-sighted actions that led to our diggers in Gallipoli eating imported poor quality beef after we sold most of our tinned beef to the Turks just before the war. It is the same kind of short-sighted approach we see from the federal government. The Commonwealth should understand that if we do not support our capabilities we will lose our unique capability, skills and capacity in Australia. Should a conflict occur this could leave us in a very dire position, despite the billions of dollars spent by successive governments.

When my constituents ask questions about this deal, they want to know how, when we let foreign companies work with some of our most basic defence needs, this will protect Australian’s national interest, national security and defence relationships from compromise. Will this foreign owned firm, Thales, guarantee Australia’s national and strategic interests over the commercial interests of its parent company or the foreign policy objectives of its parent country? Would Thales use its position to lock Australia into purchasing products from overseas, which may not be the best for Australian defence purposes? Will Thales rely on the concept of purchasing from the cheapest source, irregardless of Australian policy objectives and our national interest? For all private companies their commercial viability in the global marketplace is the most important factor. It determines their survival and it is their survival which counts. It may then be that Australia’s national security and strategic interests come second to this.

Since the privatisation of the Bendigo Ordnance Factory in 1999, there has been little new work brought into Bendigo. The current work was planned prior to the sale. The future prospects beyond July 2007 for ADI look like we may have to endure even more work being done overseas under licensing agreements with other foreign companies. Our future looks to be shaping up to have a limited amount of specialised work done in Australia and an ever increasing reliance on overseas companies to support our Defence Force’s needs.

ADI has been working with an international engineering contracting organisation to supply a substantial amount of the components and parts that are currently manufactured and sourced in Australia from overseas and primarily from Asia. This means that while considerable economic benefit continues to accrue to ADI from vehicle export orders, the actual economic benefit to Bendigo and Australia could very well be minimal or non-existent when again we are sending our defence capacity offshore.

The issue of overseas involvement with ADI Bendigo projects goes even further than that. ADI has sold a licence for the manufacture of the high-speed engineering vehicle to a Chinese company. At the time, ADI gave assurances that the Chinese licensee would only ever manufacture these vehicles and vehicle parts for the Chinese market. Despite this assurance, ADI has recently announced that it is making plans for this licensee to supply vehicle systems and parts for an export order of vehicles. ADI has told its Bendigo employees that final vehicle assembly would be the only work on this export contract that would be undertaken in Bendigo or indeed Australia. This leaves ADI only one short step away from fully manufacturing vehicles offshore.

Thales is a fully foreign owned company and, with the federal government showing that it does not care about where our defence supplies come from, the pressure to move Australian defence jobs offshore will only increase with no Australian ownership. Again we see classic Howard themes—the government actively encouraging companies to take advantage of the lowest wages and conditions around, not caring about the consequences for our skills base and our working people in the defence industry in our country. I fear that, like all manufacturing, the future of defence manufacturing under this government has been in demise over the last decade.

We cannot stand idly by whilst the Howard government makes another sacrifice to the altar of its own ideology. It acts as though defence is one big market which is untroubled by relations between nation states, untroubled by accountability or thought to our national security. It has turned its back upon our defence capability and capacity while throwing good money after bad when it comes to private projects. To add insult to injury, it is destroying the economic future of many of the regional defence employees who rely on an Australian based defence industry. Hopefully, the government responsible for this will lose its job before these workers do.