Andrew Bragg (NSW, Liberal Party, Shadow Assistant Minister for Home Ownership) Share this | Link to this | Hansard source

A letter has been received from Senator Van:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

Australia's sovereign defence manufacturing industry must be sufficiently funded so that Australia has the capability to fight a war as set out in the National Defence Strategy.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.

David Van (Victoria, Independent) Share this | Link to this | Hansard source

I rise to address a matter of critical importance: our sovereign defence manufacturing industry. As global threats escalate, Australia's preparedness is alarmingly inadequate, yet we continue to retreat from the vital support that sovereign defence manufacturing provides, leaving us dangerously exposed. The urgency of our situation cannot be overstated. The decisions made by the Minister for Defence Industry and Capability Delivery are destroying our defence manufacturing sector at a time when our circumstances demand a resurgence. The National Defence Strategy emphasises:

A sovereign defence industrial base is vital for developing higher levels of military preparedness and self-reliance.

However, very many defence manufacturers I speak with express concern that the minister's actions favour overseas defence industries over our own. A stark example of this is his recent decision to purchase the US-made Switchblade 300 strike drone. It was a blow to the many and wonderful drone manufacturers that have this capability nationally.

This is a plea for foresight, preparation and investment in our national security. The war in Ukraine has starkly demonstrated the dangers of relying on foreign supply chains for weapons. While Australia will always need to import high-end platforms, there are many weapons and munitions that we could and should be producing domestically to build resilience. This must be addressed urgently. The Australian Industry and Defence Network reports that orders to Australian defence manufacturing companies have plummeted by 30 per cent. The defence industry employs 64,000 Australians and contributes $10.6 billion in gross value added and is a vital component not just of our security but of our economy.

In the previous financial year alone, $4.4 billion was awarded through foreign military sales. That is the purchase of Australian defence material from foreign governments. We have nearly 3,000 companies in Australia with defence related capabilities, yet most are left to compete for scraps alongside foreign companies working here. This is not how we build a resilient and sovereign defence industry. Adding to this concern, we have committed over $9 billion to fund the expansion of the American and British shipyards that will build our submarines. While this expenditure is necessary, I must ask: where is the support for our industry?

The strategic implications of our under preparation are clear. The Defence strategic review and the National Defence Strategy both underscore the necessity for sovereign defence manufacturing, particularly in the production of weapons and munitions, but the government has allocated only $150 million in the Defence Industry Development Strategy over four years, averaging a paltry $37.5 million annually. This funding represents only 0.7 per cent of Australia's total Defence budget.

The recently announced Future Made in Australia initiative is going to make a significant contribution to strengthening Australia's economy through domestic manufacturing, but defence is not listed as a priority sector, even though the framework sets out that it's for economic resilience and security. Designating sovereign defence manufacturing as a priority sector is essential to ensuring that Australia can independently produce and maintain military equipment, munitions and technologies. The Future Made in Australia commitment by Prime Minister Albanese is commendable. However, it could do much more—like funding our onshore defence manufacturing. We must prioritise defence manufacture to ensure Australia is equipped to navigate the complexities of an increasingly unstable world.

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

I rise to support this motion by Senator Van and, in doing so, will talk about the importance of the production of defence capability by Australian industry as being a critical enabler not only to our military capability in times of war but also as a deterrent factor to dissuade potential adversaries from taking action because they know we have both the capability and the will to respond. In that context, it's important to realise that we're not talking in abstracts here. The Defence strategic update 2020, the Defence strategic review 2023, both highlighted that Australia no longer has the 10-year warning time to major conflict in our region that for decades government have worked to. In fact, alliance partners and others in the region have highlighted that they believe the peak threat in our region is indeed around the 2028-29 time frame, and there are calls from both Europeans and North Americans to be ready in that time frame.

When it comes to supporting defence industry, though, we need to move beyond the rhetoric, and when we see the Albanese government's defence industry development strategy, it is full of rhetoric which is not matched by the contractual commitments that will allow Australian companies to continue to invest in their people, in their facilities and in their productive capacity. Those contracts are important. If we go to the recent NATO meeting in Washington, where Jens Stoltenberg and other heads of governments from Europe and North America came together, they were calling for an increase in the production capacity of industry in Europe and the States. I was struck by the comment of the defence minister from Estonia. What he highlighted was that what industry was saying to him was that, unlike Russia, where President Putin can turn any factory into a defence factory at the will of government, in a democracy, industry needs contracts if it is to take the decisions to invest in people and equipment and IP to actually produce the things that a nation needs.

One of my concerns with the defence industry strategy that we see from the Albanese government is that, when it comes to defence industry development, they again largely default to grant programs, so you can have a look at where they offer grants as opposed to contracts for actual equipment. I contrast that, for example, with a Queensland company called SEATRANSPORT, who have developed a stern-loading vessel which they sell into the civilian market. The US Marine Corps, when they look at it, go, 'That could suit our purpose. We will give you a contract. We will lease one for three years so we can trial and see if will fit our need to equip a fleet with it.' So they find ways of actually giving contracts to companies, in this case even an Australian company, where so often the Australian government prefers to look overseas as opposed to dealing directly with Australian companies for critical capability.

We see that the Defence Strategic Review by the Albanese government has not only brought in a two-year delay to the development of some of our critical capabilities but their concept of 'no configuration change and minimum viable capability' means that even where Australian industry has developed world-leading capabilities—and I think here of the antiship missile defence capability that is delivered by the Australian CEAFAR radar, by the CEA company, and the 9LV combat system by the Adelaide based Saab—that is better than anything, for example, that the Americans can deliver, it will not be on our future fleet of general-purpose frigates.

So despite the Australian taxpayer helping to fund these capabilities, what we see is the Albanese government deciding to purchase offshore and ignoring the long-term investment that has built up these capabilities. Companies will not survive without contract and they won't invest in new capability without contracts. So when we look at things like lessons of Ukraine, the fact we need multiple platforms that are affordable, to some extent expendable and armed, I am appalled by the announcements recently that the MQ-28 Loyal Wingman, which was envisaged to have communications, ISAR and weapons, the defence industry minister said, 'Yes, weapons will come down the track.' If we believe the strategic circumstances are real, arm the Loyal Wingman Ghost Bat now.

David Shoebridge (NSW, Australian Greens) Share this | Link to this | Hansard source

This motion calls for an Australian sovereign defence manufacturing industry but it is ignoring the elephant in the room—that is, when it comes to defence expenditure, the single-largest defence expenditure proposed is under AUKUS Pillar 1 and to some extent under AUKUS Pillar 2, which is seeing hundreds of billions of dollars of Australian taxpayers' money, public money, spent on weapons systems and investment in industries entirely offshore in a historically dangerous gamble. We saw that yesterday when we got the AUKUS 2.0 agreement finally tabled. And what did that show? It showed that, for this $368 billion gamble for US, UK—potentially at some point partly Australian nuclear submarines—both the US and the UK have put into that agreement multiple get-out-of jail-free cards, and the Albanese government has put us on the hook to indemnify both the US and UK governments if something goes wrong, perhaps a catastrophic accident with a second-hand sub. Who pays for that? It's not the United States but Australian taxpayers. The US and the UK will set the price, including for the enriched uranium they're going to sell us, and they take away any independent consultation Australia has with the International Atomic Energy Agency.

I've never seen such an irresponsible, one-sided agreement signed by an Australian government, and every aspect of the agreement is a blow to Australian sovereignty. Don't take my word for it; this is what it says. At the end of article I of the agreement, it says that, if the US or the UK determine that such cooperation with Australia will constitute an unreasonable risk to their defence and security, they don't have to do it. If it constitutes an unreasonable risk to the defence or security of the UK or the US, they don't have to do it.

Article IV(H) is an extraordinary provision. It says that Australia can make payments of appropriated funds to the US or the UK for the purpose of implementing the agreement, but there's not a single provision in AUKUS 2.0 for the US or the UK to pay a single dollar to Australia. It's not even envisaged that they may pay Australia for some of it. The only provision is for us to give money to them. We've already started doing it. We've given some $5 billion to the US for their sovereign capacity and some $5 billion to the UK for Rolls-Royce and their capacity. But it doesn't even contemplate that there might be a dollar flowing the other way.

Article XIII says that, at any point, the US, the UK or Australia can terminate the agreement with one year's notice, and then it says that we have to give everything back. Every single thing gets returned—the subs, the technology, the information. Do you know how much we get in return when we hand over all the stuff that Australia has paid maybe tens and tens of billions of dollars for? Not one cent. They can terminate it on one year's notice and get all their stuff back, and we don't get a cent. Who would sign this stuff?

You want to see the last bit. It's the understanding that's attached to it. It's some private understanding—now public, because we forced it upon them—and that says the final word in these agreements is that the UK and the US expressly say that they don't have to do anything if it will adversely affect the ability of the United States or the United Kingdom to meet their respective military requirements. They can stop if at any point it degrades their respective naval nuclear propulsion submarines. They can just stop. How much do we get back? Not one cent.

That's not an agreement; that's a surrender. We sent Marles off to the United States to negotiate for a new bucket, and he came back with a sieve. It is extraordinary. I meant Minister Marles. That's only pillar I.

Andrew Bragg (NSW, Liberal Party, Shadow Assistant Minister for Home Ownership) Share this | Link to this | Hansard source

Senator Ciccone, a point of order?

Raff Ciccone (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

As Senator Shoebridge acknowledged, I was raising a point of order to refer to members in the other place by their correct title.

Andrew Bragg (NSW, Liberal Party, Shadow Assistant Minister for Home Ownership) Share this | Link to this | Hansard source

That's right. Senators should refer to members with their correct titles, please.

David Shoebridge (NSW, Australian Greens) Share this | Link to this | Hansard source

Sorry—Deputy Prime Minister. No-one is allowed to call him minister. It's Deputy Prime Minister. Then you have pillar II. Pillar II is actually probably even more insidious. Pillar II is the reason why Australia can't independently determine where they send weapons. Pillar II is the reason why we continue to send weapons into Israel, because pillar II is designed to remove any sovereign capacity for Australia to determine its own defence industry and to determine its own defence policy. This is an extraordinary surrender of sovereignty, and, if we're concerned about our defence, we should be concerned about ripping up AUKUS.

Raff Ciccone (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I also want to rise to make a contribution to Senator Van's matter of public importance here in the Senate, particularly about the work that the Albanese Labor government is undertaking to deliver Australia's inaugural National Defence Strategy. I also wanted to note Senator Van's strong interest and commend him for his support of our ADF. I know he has a very strong interest and has, on many occasions now with the Foreign Affairs, Defence and Trade Committee, spent some time in estimates and other forums supporting our troops on the ground. I just wanted to commend him on that.

The Albanese Labor government regards the safety of Australians as its highest duty, and this includes defending our country, deterring potential threats and protecting Australia's economic connection to the world. Sadly, what we hear from the Australian Greens is the complete opposite, and not one of them is in the chamber at the moment to make a very useful contribution about how we, as a nation and as a parliament, do our duty in protecting our citizens.

Therefore I'm also very glad that this MPI has been placed on the agenda today, because federal Labor is serious about investing record amounts in defence industry to equip the men and women of the ADF with more advanced platforms, in greater numbers, sooner. According to the Australian Bureau of Statistics, in the first year of the Albanese government, in 2022-23, Australian defence industry rose by 4.1 per cent and contributed $10.6 billion to our economy. Thanks to the government's increased spending, the number of people employed in defence industry also grew strongly by around six per cent. Increasing our military capability is imperative now more than ever, and we're boosting defence in a speedy manner, with projects starting this decade.

Central to a well-equipped ADF was the introduction of the Guided Weapons and Explosive Ordnance Enterprise last year. In that short time, the government signed a $37.4 million contract with Lockheed Martin to manufacture missiles in Australia from next year, invested $220 million in Commonwealth owned munitions production factories, committed $1.6 billion to expand and accelerate the acquisition of long-range rocket systems for Army, committed $1.3 billion to provide Tomahawk cruise missiles for the Navy, and successfully integrated the latest naval strike missile and Standard Missile 6 on Navy warships. The government will also invest a total $16 billion to $21 billion over the decade to establish munitions manufacturing in Australia—and that means local jobs.

It's important to note that this government is taking decisive action to repair the damage of a decade of neglect by those opposite. The government has signed the single largest defence export agreement in Australia's history, exporting over 100 Boxer vehicles valued at $3.1 billion—and securing over 600 direct jobs. I know my colleague Senator Chisholm would be very happy with that result, given that he comes from Queensland. There will be many jobs in Queensland that will benefit from that—as well as those in my home state of Victoria—through the supply chain.

Looking ahead, federal Labor has also fast tracked the delivery of the first new infantry fighting vehicle, the Redback IFV, to 2027. Under the coalition, that first vehicle was not scheduled until late 2029. Under Labor, all 129 locally built Redback IFVs will be delivered by the time the first vehicle would have been delivered under those opposite. The Albanese government is also accelerating the delivery of new surface combatants to the Navy. The first of these frigates will also be in service by 2029, followed by the first Hunter class frigate in 2034. In stark contrast, those opposite proposed that the Navy had to wait until 2034 for its first new major combatant vessel.

In the undersea domain, federal Labor will deliver a Virginia class nuclear-powered submarine in the early 2030s. Those opposite had no plans to deliver any new submarines until the late 2030s. Last month, the government brought forward by two years the delivery of 18 medium landing craft for the Army. They arrive from 2026. This will create 1,100 direct jobs and more than 2,000 indirect jobs under a program that will also deliver eight heavy landing craft, seven years earlier, from the mid-2030s. We've also announced investment into Australian industry to further develop the Ghost Bat, the first military aircraft designed and manufactured in Australia for more than 50 years.

There is so much that this government has done. I'm so proud of the work that the Albanese government is doing to support our ADF men and women.

Jacqui Lambie (Tasmania, Jacqui Lambie Network) Share this | Link to this | Hansard source

I rise to support Senator Van's matter of public importance motion. This country used to make things: tanks, aeroplanes, submarines. We used to have what they call 'sovereign defence capability'. That means that we could make the things we needed to defend our country, here, in Australia. Now, we have very little sovereign defence industry left—and, by the way, I am not counting those companies who say they are Australian just because they have officials here.

The coalition mainly sat on their hands for nine years, and, from what I hear, the current government is not doing much more. Actually, strike that. In some ways, they are worse—for example, the AUKUS nuclear submarines that we were supposed to get by 2035, if we were lucky, and that was just one submarine. Under the AUKUS deal, the first thing the Australian taxpayer has been asked to do is hand over 10 billion bucks—yes, 10 billion!—to the US and UK submarine industrial base. How about that! Since 2009 the Australian government has wasted billions of dollars trying to decide on a replacement for the Collins class submarines, which, by the way, were built here in Australia. It doesn't matter whether you think nuclear subs are a good idea or not; the AUKUS deal is both risky and eye-wateringly expensive.

Both parties claim they take defence seriously because they spend lots of money, but spending buckets of money with little or nothing to show for it is not being serious about defence, let alone our national security. I'll give some examples of past stuff-ups, because I don't have an hour. The C-27J Spartan battlefield transport aeroplanes, the result of a desktop selection, were found to be not well suited for battlefield operations and are now used as light transport. Then there were the Arafura class offshore combat vessels—12 vessels that Navy has since determined are unsuitable for intended maritime operations. Then there were the future frigates. Let's not go into that; I don't have enough time. These planned ships have got bigger and more expensive. The costs blew out, and the project was slashed from nine ships to six but at the same inflated price.

These stuff-ups are not just in the past. At the last estimates hearings, senators were trying to find out how much of the taxpayers' $10 billion we'd get back if AUKUS didn't go ahead. Vice Admiral Mead refused to answer Senator Shoebridge's question because it was, apparently, 'an irrelevant hypothetical'. Now we know that the US and UK have an expense-free get out clause, and all they have to do is give us 12 months notice. You people in here cannot be serious. People are laughing at you. You could not run a corner shop between the two of you, and our national security is in the situation it's in because of you two, I can assure you. If you think those nuclear subs are going to help us tomorrow, I tell you what: wake up to yourselves.

Ross Cadell (NSW, National Party) Share this | Link to this | Hansard source

What a great motion before us this is, because, of course, it's about sovereignty—sovereignty over Australia and its defence industry. Sovereignty, when you get down to it, is the ability to make decisions without pressure from others. That's what this country needs to be able to do strongly and definitively. When we talk about the defence industry, we talk about the very basics of that—being able to protect your own country from the threat of force from others. Having a homegrown ability to do that is essential. That's what this talk's about: spending some real money doing that. There will always be systems that Australia can't build—top-end and complicated systems where we need our partners. I get that; I accept that.

When we hear a press release that comes out and says 'a groundbreaking deal' for what Senator Van pointed out—the Switchblade 300 that you mentioned in your speech—is essentially a long-distance hand grenade and nothing more than that. It's $90,000 apiece from the United States, when we have a number of Australian businesses that not only do the same but are able to do better. That is something that should have been bought here. It is not a game-changing technology that we couldn't take a risk on. That is something we should have done here. This is what we see more and more—things painted as they aren't. Opportunities are going begging. We talk about all of the things that we import. There's not enough money in things Australia can export.

I recently went to Lithgow and went through the Thales factory there, one of the few significant barrel manufacturers there are around. We looked at their EF88, which has been the standard infantry weapon in Australia since 2016. They pointed out that the British individual weapon, the bullpup, design is going—they're looking at an M4 copy. It's up soon, and Britain does not have a barrel manufacturer capable of replacing that. Investment and contracts in Australian defence capability—keeping these guys going, giving them a baseline and giving them the confidence to go out there—would actually give Australia and Lithgow, the great economy out there, a chance to go out and take on the world, do stuff and provide things to our allies. That is what investment does.

We hear about all the things that are being spent. We hear about all the steps being taken. But what about the people that are in the industry? What are they saying the state of the Australian defence industry is? A recent survey was commissioned by Defence Connect, and these are the stats. Forty-seven per cent of defence businesses believe it is difficult or extremely difficult to operate in the Australian defence sector. That's a percentage of people who are in it, not the people who looked at it and said: 'No; it's too hard. I won't even bother.' This is a percentage of the people who actually took the step to get involved. Forty-nine per cent of defence businesses believe it is difficult or extremely difficult to attract and retain staff in the current environment because of that lack of certainty. This is all painting a picture not of what the previous government said or what this government says it is doing but how the industry really finds it—no rubbish. It goes to the things that Senator Lambie was talking about—the reality on the ground and the chip shop and the corner shop mentality. One in four defence businesses are extremely or very confident that their existing or upcoming contracts will continue as planned over the next 12 months—not 12 years, not 10 years, not five years. Twenty-five per cent think they will go there. It is a disgrace.

We need an integrated plan that enables Australians to build reasonable technology and good technology, when it can. For example, with things like Ghost Bat, don't take the weapons off it. What we are seeing in Ukraine is you need a capability immediately to stop the initial threat. But it is no longer the doctrine that you finish a war with what you started with; you have the opportunity to build and you see innovations. They are not using the Switchblade 300 greatly over there anymore. The Russian Lancet comes in at about $20,000—about a third of the cost over there. They are using homemade drones with improvised explosive devices. They are finding a way, because of the necessity to build a homegrown defence industry. Why aren't we learning those lessons? Maybe our industry is, but our defence department is not taking the chance to put that money out there. The defence industry is not being rewarded for having a crack.

That is why Senator Van's motion is so important. For Australia to have sovereignty, to be able to make its own decisions about being under pressure from others, we have to have the ability to defend ourselves in a very capable way. There are little things that we could be doing now. There is a worldwide demand for 155 military shells. We hear about Ukraine having a two-to-one or three to one artillery deficiency. We can put contracts in place to help the world, build our industry and make Australia safe all in one if we take this seriously.

Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I agree with Senator Van: Australia's defence preparedness is poor, at best. It is true that the best way to keep Australia strong is to keep our transport and industrial base strong. Instead, successive Liberal and Labor governments have presided over the destruction of our manufacturing base and allowed our ports and the transport into those ports to atrophy.

One Nation proposes a comprehensive solution to this: starting with a railway from the Bowen Basin in the east of our country across to the Pilbara in the north-west, connecting to the existing network at the Port of Gladstone in Queensland and Pindar in Western Australia. This will create a national rail network to allow Australian Defence Forces to access and defend parts of our country we have never been able to access to stage a significant military operation. The railway, called Iron Boomerang, will enable an Australian steel industry to develop at Abbot Point near Townsville, returning to domestic production the most important elements of a defence industry—steel, aluminium, concrete and ceramics. It will allow an upgrade of the capacity of Townsville's military docks to offer bespoke repairs for domestic and military vessels, including our AUKUS allies. Having a strong steel industry will open the possibility of Australian armour, transport and military rolling stock as well as a domestic strategic fleet, offering economic benefit to Townsville, Newcastle, Williamtown and Port Adelaide.

What would also help is to not forget that our greatest strength is our love of this beautiful country. That will make us strong. One Nation will not apologise for loving Australia, loving our flag, loving our language, loving our history and loving our culture. We are proud of our nation of Australia. We will proudly grow our manufacturing base to create wealth and security for all Australians.

Andrew Bragg (NSW, Liberal Party, Shadow Assistant Minister for Home Ownership) Share this | Link to this | Hansard source

The time for the debate has expired.