John Faulkner (NSW, Australian Labor Party) Share this | Hansard source

This censure debate is a matter I genuinely wish that the Senate did not have before it. I get no pleasure that an Australian Defence minister is the subject of a censure debate. I get no pleasure from the fact that the Defence minister has left himself open to and has suffered from an avalanche of criticism, not only from the opposition but also from his own side of politics. Literally only a handful of Australians know the pressure a Defence minister in this country is under, and I am one of that small handful.

Because of earlier comments in this chamber by the Deputy Leader of the Government in the Senate, Senator Brandis, who described me as a 'no-hoper' as Minister for Defence, I am now in no position to duck this debate. I reluctantly participate, but I have no choice; I will not allow myself to be accused of gutlessness by not speaking. I speak as someone who absolutely accepts the importance of a continuous and credible submarine capability for our nation into the future, and I speak as someone, I think, who does understand the challenges that are involved for ministers and government in our future submarine project. I am well aware, also, of the challenges a defence minister faces in relation to the crewing, availability and maintenance of our Collins class submarines and I also know the huge responsibility that a defence minister has for the safety of our submarine crews. There is no higher priority in this area than that.

I would like to acknowledge this afternoon how important the work of the ASC is. Along with the Department of Defence and the Royal Australian Navy, it has worked very hard to meet all the issues—procurement and otherwise—in relation to submarine design, manufacture and sustainment. I can assure you that the ADF know, the Department of Defence know and defence personnel in this country know that, as defence minister, I worked hard and—I believe that I can say this not immodestly—worked successfully to take most of the partisan politics out of defence issues in this parliament. As defence minister, I did not pass judgement on my predecessors—Labor or Liberal—nor did I engage, at that time, in partisan sniping about the then opposition. As a former defence minister, I have not passed comment about my successors—again, Labor or Liberal—and have been careful about entering debates regarding contemporary defence issues. But what I have done is be very forthright in this chamber about the critical importance of government process and probity issues. In this debate, I intend to limit my contribution to those issues.

We have heard Senator Wong and others remind the chamber today that the procurement of Australia's next generation of submarines will be the biggest government procurement project in Australian history. The Minister for Defence is in charge of a multibillion dollar project and it is critical that the fair and equitable conduct of that procurement project is not jeopardised in any way. I am concerned as to whether Senator Johnston's comments of yesterday in question time raise serious probity issues. There is a critical question of whether an Australian bid for the submarine project will be treated fairly. Let me take the Senate to the Commonwealth Procurement Rules. Procurement rule 5.3:

The Australian Government’s procurement framework is non-discriminatory. All potential suppliers to government must, subject to these CPRs, be treated equitably based on their commercial, legal, technical and financial abilities and not be discriminated against due to their size, degree of foreign affiliation or ownership, location, or the origin of their goods and services.

I now go to the first part of paragraph 6.6, which is headed 'Ethical behaviour':

In particular, officials undertaking procurement must act ethically throughout the procurement. Ethical behaviour includes:

a. recognising and dealing with actual, potential and perceived conflicts of interest;

b. dealing with potential suppliers, tenderers and suppliers equitably …

And it goes on. I am concerned that the comments by the Minister for Defence yesterday are not consistent with these requirements to act ethically but particularly equitably.

Let me take the Senate to the Defence Procurement Policy Manuala manual that I know well. Let me take the chamber to page 1.4-9, and the last part of paragraph 40:

‘Ethical’ generally involves honesty, integrity, probity, diligence, fairness and consistency. Ethical behaviour usually means acting consistently with the core beliefs and values of society; it includes the appropriate management of conflicts of interest and making decisions without being influenced by personal bias.

Then I go to paragraph 14 of the Defence Procurement Policy Manual, which is on page 3.2-3. I will quote a small part of that paragraph:

Some of the factors to be considered when identifying the risks associated with a procurement include—

and there is a range of them; one of the dot points—

breach of ethics and probity in the tender evaluation process, including conflicts of interest, bias, and breaches of confidentiality.

The issue here is: what do these requirements mean when it is the Minister for Defence, the minister who will be responsible for advising the National Security Committee of the cabinet on the procurement of Australia's next generation of submarines? What does it mean when that responsible minister comes into the Senate and says that he would not trust Australia's government owned submarine builder to build a canoe? Not my words, his. The issue for this parliament is whether a reasonable person would feel that the minister had an apprehension of bias.

Thirdly, let me take the Senate to the Australian government Department of Defence, Defence Materiel Organisation, Better practice guide: industry engagement during the early stages of capability development: a guide to the effective management of pre-first pass ‘probity’ risks. This is the exposure draft release version that I am quoting from which was issued July 2013. I want to quote this too for the benefit of the Senate and senators. Paragraph 1 on page 5 of 38:

Defence cannot do this alone and looks to industry as its capability partner. Particularly in the early stages of capability development, it is vitally important that Defence develops close productive working relationships with innovative and sustainable Defence industry companies that understand and can respond to Defence’s capability needs.

Paragraph 2, same page:

To further emphasise the importance of this relationship, it is widely recognised that the quality of Defence’s engagement with industry, particularly in the early stages of capability development, can have significant implications for delivering required ADF capability and the achievement of value for money over the longer term.

Then paragraph 3, same page:

However, it is also the case that Defence’s engagement with industry can, if not planned and managed appropriately, involve or give rise to ‘probity’ concerns that risk damaging Defence’s reputation, the quality of Defence and Government decision making and Defence’s ability to achieve best value for money capability solutions. During the early stages of capability development (ie prior to First Pass Approval) these concerns may involve allegations of bias in favour of particular solutions or suppliers and/or risks to the competitiveness or fairness of future Defence procurement processes.

This statement is unequivocal. It is unequivocal in stating the importance of protecting the reputation, the quality and the probity of Defence, and of government procurement decisions, as it should be.

Then, finally, I want to go to, as I have before in these sorts of debates, the 'Statement of ministerial standards,' which of course is the document which sets out the expected standards of ministerial conduct in this country. I quote first of all the words of the Prime Minister in the foreword to the document. Mr Abbott:

Ministers and Parliamentary Secretaries are entrusted with the conduct of public business and must act in a manner that is consistent with the highest standards of integrity and propriety.

They are required to act in accordance with the law, their oath of office and their obligations to the Parliament.

In addition to those requirements, it is vital that Ministers and Parliamentary Secretaries conduct themselves in a manner that will ensure public confidence in them and in the government.

The statement goes on. In paragraph 1.1 on page 2 under 'Principles':

The ethical standards required of Ministers in Australia's system of government reflect the fact that, as holders of public office, Ministers are entrusted with considerable privilege and wide discretionary power.

That is of course absolutely correct, as we know, as it should be. Paragraph 1.2:

In recognition that public office is a public trust, therefore, the people of Australia are entitled to expect that, as a matter of principle, Ministers will act with due regard for integrity, fairness, accountability, responsibility, and the public interest, as required by these Standards.

These statements outline the foundation on which these standards are written. I would like to draw the attention of the Senate to the following specific paragraphs in this 'Statement of ministerial standards'. Firstly, 1.3(ii):

Ministers must observe fairness in making official decisions—that is, to act honestly and reasonably, with consultation as appropriate to the matter at issue, taking proper account of the merits of the matter, and giving due consideration to the rights and interests of the persons involved, and the interests of Australia.

Then paragraph 1.3(iv):

Ministers must accept the full implications of the principle of ministerial responsibility. They will be required to answer for the consequences of their decisions and actions—that is, they must ensure that:

And the standards go on

All ministers—all of them—and all members of the executive must fulfil their responsibilities in accordance with this Statement of Ministerial Standards. We do not know if the Prime Minister has raised any concerns about these issues with Senator Johnston. That is, of course, a matter for the Prime Minister, and it is a matter for the Minister for Defence. But it is reasonable for any senator, any member of this parliament, the media or the public to ask. But let me say what my view is: I expect that the Statement of Ministerial Standards will be adhered to by all members of the executive. In this case, I do not believe that that expectation has been met.

These issues are serious. Last night, after Senator Johnston's comments in question time, the Prime Minister felt that it was necessary for him to issue a supportive statement about the vital role of the ASC. No-one else has said this today in this chamber, but let me say that I am very pleased the Prime Minister did that. The Prime Minister should have done it, it was the responsible thing to do and I am glad that he did make that supportive statement, which I am sure made a difference to the management and, particularly, the workers at the ASC. Senator Johnston has, as we know, been criticised by state and federal politicians from both sides of politics and also from crossbenchers. I acknowledge that, in this chamber this morning, Senator Johnston made clear that he regretted making his statement, and, like others, I am pleased that he did so. But let me say this as a reluctant starter in this debate, courtesy of Senator Brandis: I believe it is critical that Senator Johnston, as defence minister, now assure the parliament that he has sought advice about all possible implications of his statements yesterday in question time on the submarine procurement processes. I want to know also, and I think we need to know, that that advice will be shared with the Australian parliament and that the parliament can also be assured that these processes have not been compromised in any way. It gives me no pleasure as a former Minister for Defence to say that I think, on this matter, the facts are clear. Senator Johnston made a serious mistake for which censure by this chamber is warranted. (Time expired)