David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Defence, Senator Bob Carr. I refer the minister to the government's decision to cancel the $225 million contract to buy self-propelled howitzers from South Korea. Does the minister stand by his response to Senator Nash's question last year, that there would be no trade fallout from this cancelled contract, which, in his words 'did not figure' in the minister's many discussions with Korean government representatives?

Bob Carr (NSW, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I repeat what I said in two answers to this question last year, and that is that in meetings between me and the foreign minister of South Korea this matter was not raised.

David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Given the minister's answer, can the minister explain why, then, in my recent visit to Korea, Korean government representatives actually expressed to me great disappointment with the Australian government's decision to cancel the SPH contract. Will the minister now concede that he was wrong to be so dismissive of Senator Nash's legitimate question canvassing Korean industry's concern about the sovereign risk of investing in Australia as a result of this government decision?

Bob Carr (NSW, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I can only repeat that, in my half-dozen or so encounters with the foreign minister of South Korea, this was not raised. And how you, as an opposition spokesperson, could talk about 'sovereign risk' in Australia when no country on the face of the planet would offer a better investment climate, I do not know. To talk up the sovereign risk of your own country I think is a very dubious and shameful strategy. None of Australia's interlocutors would suggest for a moment there is sovereign risk about doing business in this country, yet you as an opposition say, 'Oh, sovereign risk in Australia'! The fact is, jobs in this country are to a large extent sustained by the flow of foreign investment and by the high reputation Australia— (Time expired)

David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I refer the minister to last week's withdrawal by the leading South Korean manufacturer Poongsan Corporation from the $1 billion to $2 billion domestic munitions manufacturing arrangement tender process, citing 'sovereign risks of doing business in Australia', which it said were too large and could not be ignored. Will the minister now admit that he has been wrong and show some leadership, repairing this damaged relationship with Korean industry and have the government reconsider its ill-considered— (Time expired)

Bob Carr (NSW, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I am proud to say that on no occasion when I have spoken to representatives of the government of South Korea has this matter been raised in any form. The reason—

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! When there is silence, we will proceed.

Bob Carr (NSW, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

The reason for this decision on howitzers was announced by the Minister for Defence. In October 2009 the government announced it would acquire four batteries of lightweight towed howitzers, and the government announced the cancellation of the acquisition of self-propelled on the highest advice of the people in the armed forces. Was it supposed to do a different thing? Was it supposed to ignore that advice it received from the highest levels of the ADF on the recommendation of Defence— (Time expired)