Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by ministers to questions without notice asked today relating to a range of defence matters.

I say at the outset that there are probably not two more important matters in the role of government than the sound administration of defence policy in all aspects and the sound administration and proper use of public funds. Throughout this continuing debate as to the proper administration and management of a range of procurement projects over the last 10 years, it is fair to say, in the most generous way, that government policy, administration and practice have been at best haphazard. If we look at a range of projects that are still some two, three and four years overdate, one is being extraordinarily generous to use the word ‘haphazard’ when the appropriate description is that there has been a litany of disasters in the administration by this government of a range of procurement projects.

When one looks for the common theme that runs through the government mismanagement of defence procurement projects one sees a number of items—significant cost overruns, time blowouts and ongoing changes to contracts and contract specifications which have ongoing consequences for time and delivery. The net result has been, in a range of platform procurement items, whether in the air, on the ground or at sea, continuing delay in delivery of those platforms and those projects to the Australian Defence Force and, as a consequence, the ongoing inability of the government to match reality with desire in terms of capability.

We only have to look at a range of helicopter projects for it to be understood that, if projects are delayed by two, three or more years and are not delivered consistent with the contract terms, we do not have capability and that capability has to be supplemented at cost from other areas, which eats into the available funds for budget. This has been a direct consequence of government decision making by a range of ministers for defence over the last eight to 10 years in a range of capital acquisition projects.

One only has to look at the list of projects which are on the public record. Firstly, the AWACs, the early warning and control aircraft, are two years late and you can bet your bottom dollar that the systems integration issues there are going to be much more serious and will blow out to four or five years. After four years we still do not have one M113 personnel carrier. At the public hearing today we were advised by representatives of Defence Materiel Organisation that they are still facing at best a two-year delay with the Tiger helicopters. We know that another helicopter platform, the Seasprites, has been grounded. They are under review by government, and a general of the Army has been tasked with doing a review as to whether they are suitable going into the future or whether they need to be replaced. That review currently sits on Minister Nelson’s desk and no public decision has been made, although leaks have been strategically made to the media. We know that the Seasprites are never going to fly in this country.

Fiascos such as this litany of ships, helicopters and personnel carriers have contributed in a significant way to the inability of the government to reconcile defence accounts over the last few years and, in particular, the inability of the Secretary and Chief of the Defence Force to sign off on those same accounts at the end of each financial year. It is disgraceful that, in a department with a budget of $20 billion outlaid per annum, the senior officers are unable to sign off on the accounts because of lack of governmental and ministerial attention to their portfolio responsibilities. It is time in this whole area of defence spending— (Time expired)

Alan Ferguson (SA, Liberal Party) Share this | Link to this | Hansard source

I listen with interest to Senator Bishop when he questions the financial management of this government on defence acquisitions and a lot of other matters. No other government has been more transparent and open with opposition members when it comes to questioning the acquisitions and the work of the Australian defence forces, which I might add have been working now at maximum effort for over seven years. At no time in our history have our defence forces had to put such an effort into their operations over such a long period of time.

I was interested to hear Senator Bishop criticise government administration and financial management, and he talked about a ‘litany’ of disasters and cost overruns. I know he was not in this place when we last had the misfortune of having a Labor government. We now happen to have what are probably the best conventional submarines in the world, but can he not remember the cost overruns and delays that we had with the submarines that were put into place by the then defence minister in the Labor government, particularly during Senator Ray’s time? We have finished up with very good conventional submarines. When you talk about cost overruns and budget overruns and time delays, just think back to what Labor did when it was in government with the Collins class submarines, to name one example.

It is a well-known fact that the best laid plans of defence acquisition do not always materialise because they are beyond the control of any government or defence force. If you are making overseas acquisitions and relying on suppliers in another country who are providing the equipment that we in Australia are purchasing for our defence forces, then sometimes it is outside the control of either the defence force or the government to change those cost overruns or the delays in timing which we all wish did not take place. Not one of us wants to see the plans of our defence forces delayed because of cost overruns and time delays.

When Labor start criticising this government’s financial management, I think they ought to take a long hard look at themselves. Over the past 11 years, this government has put this country in a position that could have only been dreamt of when it took office in 1996. I always welcome a debate on financial management from the Labor Party because they try to run away from their past record in government and the fact that when we took over the financial management of this country there was a horrible deficit, which we no longer have. Any independent assessment would suggest that this government’s financial management has been far in excess of any of its predecessors.

We are proud of our financial management. That does not mean that in some individual areas there are not occasions where there are cost overruns. We know that can happen, but, because of the financial management of this government, we can absorb those cost overruns and still run a budget that is in surplus.

Ian Campbell (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

And a strong defence force.

Alan Ferguson (SA, Liberal Party) Share this | Link to this | Hansard source

We can still run a strong defence force, as my colleague Senator Ian Campbell says, which is, to use the colloquial term, punching above its weight in areas throughout the whole of the world. That is something that it has not had to do for a very long time, certainly not for the period of time that we have been expecting our defence forces to operate at such a high tempo. I am very proud. I know that senators on this side of the chamber have nothing but admiration for the way that our defence forces manage to cope with the difficulties of being in so many different places in the world. They are carrying out their activities on behalf of Australia in a variety of operations overseas at a level that makes us on this side very proud. (Time expired)

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

Whilst Senator Ferguson says he listens to contributions with interest, so do I. It is a very interesting contribution from those opposite when they say, ‘We have a very good conventional submarine fleet.’ Indeed, we do, but we would have to have the only very good conventional submarine fleet in the world that cannot go underwater. It cannot be allowed to submerge because this government has not got around to sorting out what is happening with the rescue vessel.

The rescue vessel sank off the coast of my home state of Western Australia and, until we work out whether we are going to replace it or go and salvage and fix it, the submarines are not going anywhere. I do not blame the Navy for making that decision. Until this government works out what it is going to do with the rescue vessel, we have a whole bunch of very good conventional submarines that cannot be submerged. It is a bit like the helicopters that this government decided to purchase—they could not fly over water or at night. This is ridiculous. They call themselves good financial managers and yet they buy a whole bunch of things we cannot use, such as helicopters that cannot fly over water or at night, they do not provide the capacity to utilise these things properly and they are more than happy to spend up to billions of dollars on these things.

Jeannie Ferris (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Ferris interjecting—

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

The Seasprites! A billion dollars worth and we still do not know whether we are going to see the project through or not. And the best Defence can say is if we decide to scrap the Seasprite project then we might be able to recoup a little of the money selling off spare parts. That counts for good financial management, does it—a billion dollars for a project that you do not know you are going to see through? If that is good financial management, heaven help this country if this government continues. They are squandering money all over the place. It is a bit like the $10 billion water plan that does not have to be checked off by Finance or go to cabinet. It is $10 billion and you just do a quick run-your-eye-over, back-of-the-envelope calculation and that is good enough.

We have submarines that cannot go underwater, helicopters that cannot fly, a whole organisation that cannot keep its eye on its other assets and rocket launchers that get stolen. This is a complete financial shambles and incompetence. You do not know how to manage the system. This is completely stupid. When Senator Hutchins asked the minister for finance what was happening under the Financial Management and Accountability Act—something that you would think the minister for finance would know about, in terms of penalties—he said, ‘That’s a matter for Defence.’ That is not good enough when it comes to billions of dollars worth of taxpayers’ money. Meanwhile, the priority for Defence seems to be to go up to Papua New Guinea and try to salvage something that has been underwater since 1914, but they cannot actually deal with the priority of working out what they are going to do with the rescue vessel so we can actually use our submarine fleet. Talk about bad planning. Talk about poor financial management. It is absolutely ridiculous.

Then we come to the Minister for Defence. Isn’t he good? He has no idea where the money is going, he has no idea about the financial controls within his own department, but he has the audacity to compare what is happening in Iraq with the Australians who fought at Kokoda. You should be ashamed of yourselves. You really should. Instead of good financial management, instead of providing the infrastructure and support that our ADF personnel badly need and absolutely deserve, all we get is jingoism and misrepresentation from that minister. It is a complete outrage. He should pay attention to his duty to the taxpayers and to how the money is being spent and what is happening with the Seasprites. He should be actually making sure that we do have the capacity to use the Defence assets that we have rather than getting out there and sprouting jingoistic nonsense.

In the meantime, where is the minister when it comes to looking after the people who have been superannuated out of the ADF on the grounds of ill health? You can find a billion dollars for the Seasprites when you are not quite sure whether you are going to use them or not—and we all think that you are not going to use them but you cannot quite get around to making that decision—but you cannot consult with the people who have been superannuated out on the grounds of ill health and look after their future long-term needs. They put themselves in harm’s way on this government’s instruction and there is absolutely no intention by this government to take into account their special considerations. Do not come in here and lecture us. (Time expired)

David Johnston (WA, Liberal Party) Share this | Link to this | Hansard source

Today’s taking note of answers again establishes the great fact that is emanating from across the chamber, and that is that there is no-one in the federal opposition who has any real understanding of defence, and they have even less understanding of capability acquisition. Senator Bishop underlines that. He talks about AWACS. The AWACS is a light, command and control, carrier launched aircraft used by the US Navy. The project that he is referring to, which he wants to say is so important, is called AEW&C—airborne early warning and control. The project name is Air 5077. It has a value of $3.7 billion. I would have thought that a person coming in here to talk about projects would understand or have some vague knowledge of the correct identification of projects. There is nobody in the opposition, sadly, that has any real knowledge of defence or capability acquisition. Indeed, I think it was on Tuesday night that Senator Faulkner said in this place:

The government may say that the DMO annual report 2005-2006 identifies some project performance improvements. I acknowledge and believe that these can be attributed to better management inside the DMO and reflect well on the work being done by the DMO management team.

The question must be asked: better than what? Who could fail to remember the litany of cutbacks and slashings—15,000 defence personnel just taken off the books—by the Labor Party when they were last in power?

Let us just go through the good work that the minister and the Howard government have been doing in defence. We came to power and made a commitment to increase defence funding by an average of three per cent per annum over a decade, and we have done that. We gave a long-term funding commitment to a defence capability plan to give industry the certainty it needs. We did that. We established the Defence Materiel Organisation to provide a single point of accountability for defence acquisitions. May I pause to say that it is working magnificently, with almost $60 billion worth of projects on the go. We established the Kinnaird review into defence procurement.

We developed an acquisition reform plan to further improve the way government buys new defence equipment and capability, including changes to DMO to improve financial transparency and accountability. We did that. The Defence white paper Defence 2000: our future Defence Force, established a benchmark for the ongoing future development of the Australian Defence Force. Around 100 major projects worth some $17 billion have been approved from the white paper recommendations. We established the Defence Industry Advisory Council. They are things that the opposition know nothing about and never talk about because they are not interested in the subject. We carried out the Defence Reform Program, which identified savings in excess of $900 million a year to be redirected to combat capabilities such as additional Army personnel, modifications to amphibious ships and combat equipment, and ammunition.

We developed a strategic defence industry policy identifying six key strategies to shape Defence’s future relationship with industry. We established the Australian Strategic Policy Institute, ASPI, which gives the opposition every opportunity to hone their skills to try and understand something of defence, but, sadly, the messages are not getting through. And since taking office we have fixed Labor’s blunders. Who could forget them? They were fantastic. There were the minehunters—an absolute shocker—$138 million worth of vessels that never even went into the water. We lost the intellectual property with the Collins class submarine—the welding was wrong—because the Labor minister at the time failed to administer the contract properly. Kockums never properly transferred the intellectual property—a classic ministerial mistake that the previous Minister for Defence, Minister Hill, fixed and repaired. These are just the tip of a very black iceberg. If Labor were ever to come to power, the defence of Australia would be in jeopardy. (Time expired)

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Having lived for some 11 or 12 years in the northern suburbs of Adelaide, a stone’s throw from Edinburgh Air Base, I have had contact with many serving defence personnel and their families. I know how loyal, dedicated and proud those service men and women, and also their wider families, are of their service to their country. Their whole families share in that commitment to the defence forces. Over the last few years we have seen more and more demanded of those Defence Force personnel. What happens with this government? Is this backed up by the same dedication and commitment by this administration? I think we had the answer when Senator Chris Ellison was asked about the critical rescue ship for submarines. He dismissed it, saying ‘it is a work in progress’. He could not give us an update or any detailed description of what is going to happen with getting the Remora off the ocean floor.

Can you imagine the feelings of Australian defence personnel and their families if a submarine actually went down while we were still waiting for that rescue ship to get off the ocean floor? Can you imagine how it would be for those families if they were told by the government: ‘We’ve made this arrangement with these overseas forces and, once they’ve got here, it’ll be all right’? It could be days before they arrive to rescue the service personnel out of that submarine stuck on the bottom of the ocean floor because they did not get around to it—it is just ‘a work in progress’; they did not get around to fixing the rescue ship that is languishing on the floor of the ocean. That is the kind of dedication and commitment we have from this administration to our defence personnel and their families. This is the kind of inaction and lack of activity that we have seen from the government in the past decade. There has been a series of failures in accountability and procurement. This is a very sad reflection on the government. It is a sad reflection of the value that they place on our defence service personnel and their families.

Ian Campbell (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

Why are you reflecting on the naval officers who are trying to get the Remora off the sea floor?

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

The work in progress? The Minister representing the Minister for Defence in this chamber was not even aware of it. It was not high enough on his list of priorities.

Ian Campbell (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

It’s a work in progress by the Navy, so why are you reflecting on the Navy?

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

Senator Ian Campbell, stop interjecting. Senator Hurley, address your comments through the chair.

Annette Hurley (SA, Australian Labor Party) Share this | Link to this | Hansard source

That is the kind of government response we get to the dedication that is shown by our defence forces. The other kind of response we get was illustrated today by harking back to previous Labor governments—over 10 years ago, to the Collins class submarine. The government were able to dredge up one project to illustrate that perhaps a Labor government might not have been as good either.

Let me read what the Australian Strategic Policy Institute said about the Collins class submarine in their review of it. The review stated: ‘The Commonwealth’s $5 billion investment has not only provided Australia with a key strategic asset but also greatly boosted the skill base of our naval construction industry.’ That is precisely the point. There might have been cost overruns, although $5 billion looks pretty small now, I must say, compared with the blunders and overruns of the current government. The Labor government put this in place, built up our skills in Australia, created Australian jobs, Australian assets and Australian skills that have provided ongoing work for Australian workers. Senators stand up and try to defend cost overruns, saying: ‘We can’t control what they do in other countries. We can’t guarantee that other countries will deliver on time.’ What a pathetic response to a defence industry that is even more critical in today’s troubled times. I call on the government to put more effort into backing up the critical work that our defence personnel do in Australia.

Question agreed to.