Carol Brown (Tasmania, Australian Labor Party, Assistant Minister for Infrastructure and Transport) Share this | Hansard source

On behalf of the government, I rise to speak on the Defence Capability Assurance and Oversight Bill 2023. The government is committed to ensuring that defence capability acquisition and sustainment decisions are underpinned by a robust test and evaluation enterprise. This requires sensible reforms that do not inadvertently create a self-regulating sector and that mean Defence can access competitive markets to deliver a critical defence capability. That is why the government will not be supporting this bill.

The bill would create two new bodies that would add further complexity to a sector that has been asking for processes that are more efficient, not additional red tape and barriers to entry. It would duplicate functions that already exist in defence and push valuable workforce resources out of defence, thinning out test and evaluation expertise in a sector that is already struggling to increase workforce. The explanatory memorandum to the bill identifies that costs associated with establishing the Defence Capability and Assurance Agency would come out of the Defence Integrated Investment Program. Yet the bill does not articulate the significant operating and workforce costs it would involve. This is not just simply moving people across from one place to another. There are a multitude of costs and to name a few: physical infrastructure, IT systems, human resources and commercial costs. All of the above expenditures would take away funding from defence that could have been otherwise used to deliver critical defence capability.

It is frankly surprising that Senator Fawcett and the coalition are out there saying there's no new money for defence but, with this bill, are seeking to add to the cost pressures they left behind in the Integrated Investment Program. It is indicative of their approach to defence that they have maxed out the credit card with $42 billion in underfunded announcements and an IIP overprogrammed by 30 to 40 per cent over the forward estimates, while cutting Defence by stealth to the tune of $18.5 billion.

The requirement for the Defence Capability Assurance Agency to appoint an industry partner to deliver the regulatory function for T&E is also concerning. The reality is this would likely be a large company with a significant market share. So you could inadvertently allow a large company to set the regulatory standards and practices on T&E. This would disadvantage small and medium companies. You can see a world where they may be subject to standards and processes that put barriers on them. We've seen what happens when you allow commercial providers to set the standards and help regulate a sector. The propose amendments from the coalition, as identified in and from the Senate inquiry, are not enough to satisfy the legitimate concerns around creating a sector that self-regulates. Frankly, the model being proposed in this bill would not work in the Australian context.

The proposals in this bill are not an efficient way to remediate the test and evaluation issues in defence. It is interesting that the opposition seems to now care about test and evaluation in defence. They keep claiming they are concerned about it, yet neglect to recognise they had almost a decade to fix this. So why are they now claiming a moral high ground? In fact, you only have to look at some of the public submissions to see their record on test and evaluation in defence. The OneSKY CMATS project has been used as an example of what happens when T&E is not applied properly. This was a project those opposite mismanaged and neglected, and now we are fixing it through the projects of concern process. If the coalition thought creating an entirely new organisation for test and evaluation was a good idea, why did they not create one in almost a decade in government? It is because they did not support it during that time or did not think it was important enough to bring up. Why are they only now supportive?

Defence recognises they need to improve on test and evaluation. That's why they are delivering on the Defence Test and Evaluation Strategy—something that was actually produced while the coalition was in government in 2021. Is the coalition admitting something produced under their watch is wrong? It is important to recognise the defence achievements on test and evaluation. There is an updated test and evaluation policy, improved governance and increased training, resulting in 120 students in 2023 with the aim of doubling that in 2024. There's also been implementation of a capability risk assessment mechanism for projects, helping to identify and address test and evaluation risks early in the project cycle. You can also expect to soon see a new test-and-evaluation enterprise-governance model informed by extensive engagement with industry, like-minded countries and experts. That is why it would be premature to establish new bodies—as proposed in this bill.

It is notable that only 11 submissions were received by the Senate inquiry. This is a very small number, and it would be a stretch to say that they are representative of the entire sector. Very few of them were from small and medium businesses. We need to consult with a broader range of the sector that includes these businesses before considering the proposals in this bill.

The bill also proposes to establish a new parliamentary joint committee on defence. We agree on the need to strengthen parliamentary oversight of Defence. That's why, on 8 August 2023, the Deputy Prime Minister announced the government had agreed to establish a new joint statutory committee on defence as part of its response to the Joint Standing Committee on Foreign Affairs, Defence and Trade's inquiry into international armed conflict decision-making. This new joint statutory committee on defence will likely fulfil most of the functions that the committee being proposed in this bill would have.

This is something that, again, the coalition had nearly a decade in government to implement if they had wanted to. This shows we're open to sensible ideas for ways to improve transparency and oversight of test and evaluation in Defence, but this bill is not the answer. While the government does not support the bill, we are open to briefing Senator Fawcett on the ideas we are working on with Defence that will strengthen test-and-evaluation in Defence and look at ways that we can achieve the intent of the bill without creating two new agencies.