David Pocock (ACT, Independent) Share this | Hansard source

I applaud Senator Fawcett for introducing this bill and pushing to improve defence procurement processes, and I thank him for his service in Defence before being elected by the people of South Australia to represent them in this place. Defence is the largest procuring Commonwealth agency—tens of billions of dollars a year. As we know, Defence spending as a proportion of GDP is often used as a marker of how seriously the government is taking national security, but throwing money at a problem doesn't always fix it and we've heard too many stories in this place about faulty procurement processes leading to huge sums of taxpayer dollars being spent on faulty equipment.

It's clear that it's not just money at stake here. I've had concerns about the procurement of the MRH-90 Taipan raised with me by people in Defence as an example of procurement gone wrong. Political decisions ahead of expert decisions are having grave consequences, lethal consequences. Defence personnel who are putting their bodies on the line for us should have confidence that the equipment that they are using is the best available and has been selected using transparent processes.

As other senators have highlighted, there's a long list of issues when it comes to defence procurement: the $2 billion worth of armoured vehicles with braking problems; the $45 billion Hunter frigate program, where ANAO was scathing of the procurement; and the $300 billion committed to nuclear submarines through a completely opaque process, with taxpayers footing the bill for a $835 million settlement paid to French company Naval Group along the way. And we do this while we're told we simply can't afford to increase the rate of welfare payments like JobSeeker to a level sufficient to lift thousands of Australian kids above the poverty line. My point is not that we need to spend less on defence; it's that we need to waste less on failed defence procurements and to spend more on genuinely building the capabilities we need. It's hard to see how more independent oversight, more rigorous risk assessments and more transparency around how decisions are made can possibly lead to worse outcomes here.

Many world-leading defence capabilities are being developed in Australia. But I've been told too many stories of Aussie companies struggling to get a foot in the door with Australian government procurement, being told point blank to go and win a contract overseas to prove themselves before the Australian government will consider using their products. Cutting-edge local defence companies are selling to foreign governments but not our own because our government deems making a better Aussie industry too risky. But perhaps assuming that big multinational primes can deliver better capabilities simply because we know their names is also too risky.

Based on value, roughly 20 per cent of defence contracts won by Australian companies are awarded to companies based here in the Canberra region. People set up in Canberra because they want to work collaboratively with government to deliver the best possible outcomes—and government should be working collaboratively with them. One way we can do this without giving rise to corrupting conflicts of interest is through independent oversight. I'm hearing from local firms that our defence industry is in serious danger; that there is insufficient clarity about the future pipeline of work; and that where new projects are on the table Australian companies are being used for the bits and pieces, with big multinationals brought in to do all the heavy lifting and to skim the cream off the top. I've heard from Canberra based companies who have won R&D contracts to help support the next generation of defence tech they are developing. When they bid for a contract to manufacture the products they've spent years researching and developing, they are overlooked in favour of a foreign company not because Australian companies are offering inferior or more expensive products but because of an inertia in the Australian procurement system that favours big, familiar suppliers. Great oversight and assurance of transparency in defence procurement can help break that inertia not by providing handouts but by spending more strategically, sensibly and transparently.

We need procurement reform to give our sovereign defence industry greater certainty and to help local firms build with confidence into the future. I thank Senator Fawcett for his work on this and for bringing this bill to the Senate.