David Fawcett (SA, Liberal Party) Share this | Hansard source

by leave—I move amendments (1) to (7) on sheet 2289 together:

(1) Title, page 1, (lines 2 to 4), omit ", the Inspector-General of Defence Capability Assurance and the Parliamentary Joint Committee on Defence", substitute "and the Inspector-General of Defence Capability Assurance".

(2) Clause 4, page 3, (lines 27 to 31), omit the paragraph beginning "This Act also".

(3) Clause 5, page 4 (line 10), omit "the Parliamentary Joint Committee on Defence", substitute "a Parliamentary Joint Statutory Committee with oversight over defence".

(4) Clause 5, page 4 (lines 11 and 12), omit the definition of Committee member.

(5) Clause 9, page 8 (lines 15 and 16), omit paragraph (d) of the paragraph beginning "The Agency's", substitute:

(d) reporting to the Defence Minister and a Parliamentary Joint Statutory Committee with oversight over defence.

(6) Clause 19, page 15 (after line 27), at the end of the clause, add:

(4) The Defence Capability Assurance Agency must, on behalf of the Commonwealth, ensure that the person or entity who has entered into an agreement with the Agency under subsection (1), in maintaining, developing and regulating workforce and infrastructure standards as mentioned in subsection 11(2), does not inhibit effective competition for the defence industry sector to deliver services required by the Agency in the performance of its functions.

(7) Part 4, clauses 73 to 103, page 46 (line 1) to page 65 (line 5), to be opposed.

I'd like to thank my colleagues in the committee. I recognise the chair, Senator Ciccone, and his participation and leadership of the committee, as well as Senator Chandler as the deputy chair.

As colleagues have spoken both today and previously, there are many people in Defence who work extremely hard to bring about good capability. But what we have seen over too many years is that there are pressures that either lead to risk not being assessed at all or not being assessed by people who are qualified to do so. Therefore decisions that are made are not made on a basis of an accurate understanding of technical and scheduled risk not only to safety but also to operational effectiveness. Thirdly—and I think possibly the worst case—where the ADF does have qualified test agencies who do an assessment and make an adverse finding, those reports are sometimes set aside, proactively dismissed or challenged with alternative unqualified reporting to give a project manager or a capability group the opportunity to still progress the project in accordance with the schedule that they wish. That has a significant impact, sometimes on safety and often on capability.

Through the inquiry into this bill, we received a number of submissions—some public; some in camera—which went into some detail about the fact that this is not only historic with things like the Seasprite—probably one of the worst procurement failures in Australia's history—where this kind of deliberate ignoring of technical advice was at the root of that failure, but there are some projects that are quite current that had the same characteristics. That's despite a number of ANAO reviews and parliamentary reviews into Defence's test and evaluation process which has resulted in a flurry of new process. There is so much process that you could exceed the weight margins of a future frigate with the extra paperwork that's been generated! What we see is that it's not applied consistently and it's not resourced. Even where it is applied, it's often not listened to.

That's the purpose of this bill: to provide for the fact that assessment of risk could be done by people who are qualified to do so, that they will be suitably resourced and that their reports will be transparently available not only to the capability managers in the project but to the senior decision-making committees in Defence; and, importantly, also to the Minister for Defence and, therefore, to the National Security Committee of Cabinet; and to an oversight committee appropriately tailored in terms of the disclosure of information, so that there can be a transparent understanding across all levels of decision-making as to what the risks are and whether they are acceptable, whether they need to be managed or, in some cases, whether projects should be cancelled. Those are important things to get right. This bill seeks to do that.

I would welcome the government considering—and the government and Defence have acknowledged that there are problems in this system and that there are things that need to be rectified. The internal reform efforts that have been attempted in Defence under both sides of politics for a couple of decades have not proven to be effective or sustainable. I think we need the approach that's been taken by our allies in the US of creating an independent statutory body that doesn't duplicate but that actually utilises to better effect available existing resources and grows new resources that are competent and capable for the job at a time when global circumstances indicate that the risk of conflict is greater now than at any time since World War II. If ever there were a time when we needed to make sure that every dollar spent was spent effectively and every month procuring, training and operating was spent effectively, now is that time. That's why there has been time management applied to this bill today—so that it will be brought to a vote and can move from here to the House. I would encourage the government to look seriously in the House as to how we move forward and rectify a longstanding problem that has both degraded the operational effectiveness and the safety of defence equipment and, in far too many cases, has cost the taxpayer unnecessary billions of dollars in waste, where risks and technical issues were identified early but disregarded because people didn't want their projects to be derailed. So this is an important bill.

During the committee process, we heard from a range of stakeholders. There were also some changed circumstances. The two amendments that I am putting forward deal with some of that feedback from stakeholders and one of those changed circumstances. Part of the design of the bill is to have parliamentary oversight and so it originally established a parliamentary joint committee on defence in a similar way to the intelligence and security committee is created through the Intelligence Services Act and has oversight of agencies with classified information and detailed briefings and insight. The government, in response to a report of the Joint Standing Committee on Foreign Affairs, Defence and Trade, undertook to establish a committee that, whilst different in name, for all intents and purposes was comparable in terms of function. So, rather than duplicating the effort there, one of my amendments here removes that section of this bill, recognising that the government's committee which they have undertaken to create this year will actually perform that function. Of the amendments (1) to (7), a number of those are consequential amendments that need to occur to the bill because that committee has been removed. The main effect is the removal of the parliamentary joint committee on defence.

The second concern that was raised by stakeholders on one of the aspects of the bill is that if we want people to be competent in the conduct of technical risk assessment and operational risk assessment then we need to (a) have standards and (b) audit the people who get appointed to the roles and their ongoing professional qualifications, training, development and conduct to make sure they are consistent with those standards. We do this elsewhere in the Defence Force—very successfully, I might add—with the Director of Aviation Safety setting standards and then making sure that, whether somebody is Army, Navy, Air Force or a contractor, they meet the standards before they are appointed to a role and they are audited for their ongoing compliance against those standards.

The bill recognises that one of the shortfalls in defence has been a lack of consistency in the ability to retain the depth of knowledge to have a body to set such standards and it looks to engage an industry partner to do that. There were some concerns raised that perhaps that could lead to monopolistic behaviour, and so the second amendment here is placing additional obligations on the board of the Defence Capability Assurance Agency to ensure, both by the legislation and in the change to the explanatory memorandum, that they consult with service providers broadly across industry to ensure that the due diligence and the checks and balances they put in place are effective but also trusted by the industry sector to know that this will set a high standard, but it will be in no way monopolistic in practice. That will go a long way towards helping this agency to be effective and to not duplicate resources but also to be a catalyst for the development of further uniformed and therefore operationally experienced people with the training and qualifications in test and evaluation who can play their part in expediting capability and procurement decisions within defence because people know they can trust the assessment of risk. With that, I table a supplementary explanatory memorandum.