Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I present the interim report of the Foreign Affairs, Defence and Trade References Committee on the impact of Defence training activities and facilities on rural and regional communities.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

I rise as Chair of the Senate Foreign Affairs, Defence and Trade References Committee to speak on the first interim report of the committee's inquiry into the impact of Defence training activities and facilities on rural and regional communities. The committee has decided to table interim reports after regional hearings so that local communities do not have to wait until the final report from the committee for issues in their area to be highlighted. To date the committee has been pleased with the level of engagement by the Department of Defence and the willingness of officers to acknowledge that there is room for improvement in their engagement with local communities.

To set the scene for the inquiry: the 2016 white paper indicated the government's intention to strengthen and increase investment in defence capabilities, which was supported by an increase in defence funding. The government has stated that it will implement a range of infrastructure initiatives to support future ADF operations, including upgrading training and facilities over the next 10 years. The white paper also signalled a new approach to defence industry policy, with a focus on small-to-medium enterprises. The focus was reiterated in the 2016 Defence industry policy statement. The Prime Minister and the government ministers have emphasised that the new investment in defence will create jobs across the region and bring benefits to local businesses and communities. These policies and statements from the government have generated expectations that regional Australia will be able to benefit directly and indirectly through participation of local businesses—in particular, small-to-medium enterprises—in building defence capability.

The focus of the committee has been to investigate whether regions, local businesses and local communities have access to information about the plans to expand or upgrade facilities so that they are in a position to offer goods and services. The committee also explored communication by Defence with stakeholders in local communities who will be affected by upgrades or expansion, as well as communication about existing training activities. In addition to looking at channels of communication, the committee spoke with businesses currently working with Defence in an effort to provide guidance for other businesses looking to engage.

The committee held a hearing in Port Augusta on 8 June 2017. The significant test and training areas in South Australia are the Cultana Training Area and the Woomera Range Complex, which will undergo expansion and upgrades. There are also regular exercises, such as Exercise Hamel in 2016 which was centred on the Cultana Training Area.

The committee was pleased to hear the overall message that Defence's presence is welcomed and supported in local communities. The committee would like to see Defence capitalise on this goodwill, as well as on the local knowledge, skills and experience. The committee recognises, as the local communities recognise, that Defence cannot source everything it needs locally. However, the clear message from the hearing was that local businesses wish to have the opportunity to be fairly considered when Defence is sourcing goods and services. The committee heard that there can be a perception that regional areas do not have the necessary skills to provide goods and services. There was a very clear message to the committee that the skills exist and the businesses are willing to engage. The information on local businesses' skills and capacity appears to be readily available.

There are challenges for local business, as most are small and medium enterprises, so scale can present some issues. Procurement processes can also be daunting, especially in documentation, which the committee heard can be onerous and complex. Local businesses also need to focus on maintaining their work in the local community as Defence work can be transitory.

I turn now to the mechanisms being used to engage and enhance local engagement with the potential opportunities from Defence. Communication, coordination and streamlining the dissemination of information are critical to maintaining and improving relationships. For relationships between Defence and the local communities, the committee heard that Defence has made a good effort in disseminating information on business opportunities as a result of the Cultana Training Area Expansion Project, as has tier 1 contractor St Hilliers.

Each regional area has its own communication mechanisms. The committee considered that there are a number of mechanisms in existence which form solid platforms for ongoing communication and coordination across the region. The committee also heard about a new initiative to bring together significant stakeholders from the region to develop a coordination framework. It would appear that this group would go a long way to addressing the coordination and dissemination of information, and the committee was pleased to hear that Defence is engaged in this forum. This forum could also be used to channel the information on local skills, businesses and capacity to appropriate areas, to ensure that businesses are in the best position to take advantage of the commercial opportunities, some of which will require support. There would appear to be channels in place to facilitate this support, including forums with Defence and others to provide training and capacity building as required.

Whilst appreciative of the expected surge in business during exercises, local businesses expressed disappointment that there had been little forewarning to them to allow them to maximise the business opportunities. The committee recognises that Defence must work within the Commonwealth procurement framework but will look more closely at the South Australian model and its applicability to Commonwealth procurement. The committee appreciates the willingness of Defence to engage with this model and the willingness of the industry advocate to engage with Defence.

The committee believes there should be a greater level of visibility and transparency of Defence engagement with local communities. Data at the national level means little in local areas. Defence was able to provide the committee with some information, breaking down contracts by region, and took on notice to provide further information.

The committee has made these initial recommendations: to ensure the most efficient communication mechanisms are in place for the most effective flow of information, which may generate potential business opportunities; to ensure as much information about upcoming training exercises is being disseminated with as much notice as possible; to explore further engagement with the industry advocate to investigate opportunities for events or workshops; and to make more information available to local communities about Defence expenditure in the area.

I thank the committee members for the bipartisan approach to this inquiry. In July, the committee held hearings in Rockhampton and Townsville, and there will be a separate interim report to cover these hearings. Later in the month, the committee is expected to convene hearings in Darwin and Katherine. This was initiated by an approach from the mayors of the Upper Spencer Gulf, who came to Canberra on their regular lobbying exercise and simply said: 'Defence is very welcome in our areas. We love having Defence there. They bring an incidental economic boost. The Cultana training area has been expanded. There is considerable investment of Defence funds in infrastructure but, basically, we can't see the opportunities. We need to be able to see where our local small to medium enterprises can actually get in and do some very valuable work in these small regional economies.'

We had a very successful bipartisan view about this. Former Senator Back was extremely supportive of this effort, as was Senator Fawcett and—I can't think of the other coalition senator that appeared. Basically, the whole effort was that regional Australians need investment and they need the visibility to exercise their skills and opportunities. If we can somehow encourage Defence to be a little bit more transparent and to invest locally it will be for the good of regional South Australia and, indeed, regional Queensland, the Northern Territory and wherever else we look.

I have to put on the record once again the extremely good work of the secretariat in this area. Secretary Sullivan and Suzanne O'Neill convened efficiently, as always. We have produced what I think is a credible piece of work which is worthy of the defence minister's consideration and, in my view, adoption. I seek leave to continue my remarks.

Leave granted; debate adjourned.