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

My question is to Senator Minchin, the Minister for Finance and Administration. Does the minister recall telling the Senate on 1 March this year, in response to a question about the purchase of the Super Hornet combat aircraft, that ‘the government has made absolutely no decision to make such an acquisition’? How does the minister explain the defence minister’s announcement made just five days later to purchase 24 Super Hornets at a total cost of over $6 billion over 10 years? Given this rush decision to buy the Super Hornets, where does that leave the government’s commitment to Mr Kinnaird’s two-part approval process and the objective of having in place a more rigorous and robust process for submitting defence capability options to government? Doesn’t the haste in the approval process indicate once again that the rush decision to override the Kinnaird process was not the result of immediate strategic need but just plain political expediency?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I do have some regard for Senator Bishop and his diligence on these issues, but in this case he is completely wrong. I am happy to report that my answer to the Senate on 1 March was accurate. The government had not made a decision at that time. The government was, of course, deeply involved in what was then reaching the end point of a long consideration of our air defence capacity and our air superiority capability. Subsequent to the question that I received on 1 March, the government finalised that process of long consideration and decided that it would indeed move to purchase the 24 Super Hornet aircraft at a full cost, including maintenance and through-life support, of some $6 billion to ensure that Australia’s air defence capability is maintained in full. We see that as a primary responsibility for this government.

The government has been diligent in ensuring the adequate defence and national security of this country. We are proud of our record. No final decision has been made, but we are engaged in, as you know, the detailed consideration of the acquisition of the JSF, which, prima facie, we see as the ideal aircraft for Australia in that it has the multiskill capabilities required for our Air Force of air-to-air and strike capacity. To ensure that Australia maintains adequate air capability through the transition from our F111s and existing F18s, it has been decided, as I said, after a long period of consideration of the options, that we will acquire the Super Hornet aircraft. So I can assure Senator Bishop that the decision was made in a very considered fashion, following proper process.

The most important thing, of course, is that as a result of the superior management of the budget by this government—restoring the fortunes of the Australian government’s fiscal position—the government is glad to be in a position where it is able to make an investment of this kind to ensure our air capability. If we were still faced with a situation of massive debt and annual budget deficits, such a purchase would have been a much more difficult exercise to embark upon. But, given the sound finances of this country under our superior management, it is possible for us to make this important investment in this aircraft, which Defence recommended as being the aircraft that is appropriate to ensure that our air capability is maintained through the transition from the F111 and F18 to the JSF.

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

Mr President, I ask a supplementary question, which arises out of that response. Can the minister confirm that department of finance officials still participate in defence capability committees to help cost, evaluate and review major procurement decisions prior to their announcement? Given the rush decision, a lack of comprehensive project evaluation and non-adherence to the two-stage Kinnaird process, if the finance minister is now so far out of the loop on a project that will spend some $6 billion of public moneys, who is now protecting taxpayers’ financial interests?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I reject the assertions made by Senator Bishop in his question. As I said in my first statement—and again we have the problem where people just ask the supplementary without listening to the answer to the question—the decision was not rushed. This has been under consideration by the government for quite some time. My department was properly involved in the detailed costing of the alternatives and the options available to the government. The Department of Finance and Administration and I were certainly not out of the loop. The finance department was actively involved, as was I, in the NSC making this very important final decision. As I said, I am delighted that, as finance minister, I am part of the economic team which has ensured that the finances of this government are superior to almost any country in the Western world, with nine surpluses out of 11 budgets and the repayment of $96 billion of debt. Consistent one per cent of GDP surpluses have ensured that we are in a position to make this critical investment in the defence of Australia. (Time expired)