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

I rise to address this matter of urgency moved by Senator Shoebridge. I'd like to address the points raised—briefly, to start with, and then I will go into some detail. One of the points is that this is abandoning our sovereignty. Having worked in Defence for many years—in fact, I ran our flight test centre—I'm aware of the fact that for many of our systems we have a deep reliance on the original equipment manufacturer, from issues to do with software to spiral upgrade programs. For example, the Joint Strike Fighter would be almost impossible for us to operate in the absence of the combined logistics support system. This no more decreases or throws away our sovereignty than many of the systems that we are purchasing, because the cost to develop and completely own a system here in Australia would absorb more of the budget than Australians would be prepared to fund.

The second point relates to stability in the region. One of the key reasons you have a strong defence force is in fact for deterrence, so that we keep the peace. History tells us that, if you want to deter an authoritarian regime from taking action, you need to: (a) have a strong capability; and (b) demonstrate clear intent that you are prepared to stand up and defend what is in your nation's and your people's interests. The brief that was put together by the Congressional Research Service that actually informed the members of the US Congress to support and vote for the NDAA, which authorises the AUKUS deal, highlights that selling the Virginia class boats to Australia would substantially enhance deterrence of potential Chinese aggression, particularly around North Asia and the Taiwan Strait in our region. So, far from destabilising the region, this would actually enhance stability in our region.

Why is that important? This is the third point I'll come to. Senator Shoebridge's motion talks about $360 billion. That sounds like a lot of money, but you've got to remember that, when Defence cost these projects, they look at the out dollars over a period, and 30 years is the period involved here. That's about 0.15 per cent of GDP looking over those 30 years. To put that in context—$360 billion over those 30 years—we spend around $220 billion each year just on the welfare budget. Looking at the Australian Institute of Health and Welfare figures, on average that's around 10 per cent of GDP. So it's 10 per cent of GDP versus 0.15 per cent of GDP.

Why is stability important? If we look at analysis by David Uren, one of Australia's premier economists, into the impact of tensions and conflict in the Taiwan Strait, he highlights that the detriment to the Australian economy would be a long-term decrease of six percent of GDP and a reduction of 14 per cent of per capita income even if Australia wasn't involved in a conflict but just if the conflict occurred. This is an investment of 0.15 per cent of GDP so that we maintain deterrence and the status quo to avoid conflict. That is something that will keep Australia's economy healthy to the tune of nearly six per cent of GDP. When you look at that cost figure, you've got to understand that it is actually a sensible long-term decision to have a strong military capability that acts as a deterrent.

To the final point of Senator McKim's motion, and as Senator Shoebridge described, there are bottlenecks in the American system at the moment. In fact, the US has decided that, as part of managing their capability, they need to invest. They're looking to invest some $11 billion to increase the capacity at the two shipyards, General Dynamics and Huntington Ingalls Industries, that make the Virginia. But they've realised that, if they just keep placing orders and there's already a backlog, then they're committing funds to something that cannot be delivered. The detailed analysis of that decision is that they've accepted the reality that, yes, there is a backlog. So they've said that they won't put the funding in against another vessel, because the reality is that it won't suddenly pop out, but they will invest $11 billion over a period to actually lift the capacity of those shipyards to reach the 2.33 that Senator Shoebridge referred to.

Far from being a waste of money, this is an investment in the stability of our region and in our sovereign capability in partnership with like-minded nations to preserve the interests of Australia and our people.