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

My question is to the Minister representing the Minister for Defence, Minister Wong. In estimates, not last week but the week before, I put to you some questions about our relationship with Japan and Korea. Both you and officials talked about how very deep our strategic alignment is. Last week's announcement on Sea 3000 was that a Japanese and a German ship have been downselected. Can you tell the Senate how this reinforces our relationships in the region, please?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Thank you to Senator Van. I do recall the exchange; I think it was in foreign affairs estimates. I know your interest in defence procurement. If I may, while I'm on my feet I will recognise the members of the ADF who are here today on the parliamentary program. Thank you for your service.

In relation to defence procurement, I think the first point to be made is that the government first has to look to—

Sorry—I thought Senator McKenzie was saying something. The government has to first look through cost and capability. Obviously, there were a number of other countries who had an interest in this particular procurement. They made that interest public. They would engage, obviously, with the foreign minister and I would say to them: 'We deeply appreciate our strategic relationship with you. We will continue working to deepen that, but ultimately these procurement decisions have to be made on capability and on cost.' And that is the basis of the decision that you referenced, which the Minister for Defence and the Minister for Defence Industry and Capability Delivery have announced.

You talked about, I think, the importance of both the Japanese and the Korean relationships. I think I've responded to you before. The relationship with Japan is really second only to the United States in terms of its strategic significance. We have a special strategic partnership with Japan. In terms of Korea, there is such an important strategic alignment with the Republic of Korea. I've visited. We are one of the few countries with whom they have a two-plus-two ministerial meeting. (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Van, first supplementary?

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

Thank you, Minister. Minister, there are widespread rumours of the two bids that Navy took forward to NSC. One was the Japanese bid, and one was the Korean bid. Can you shed any light on why there was a change from the Navy's pick of the suitable capability to a different one?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

Senator, I think there are a couple of things I'd say. First, you shouldn't believe every rumour you hear. More importantly, I certainly am not going to comment on what may or may not have happened in any NSC meeting, but I would say, in relation to this procurement, that we understand the importance of this procurement.

As I said in my primary answer, we were very transparent with the various bidders about the nature of the assessment that was going to be made. Of course, commentators will talk about the importance of particular strategic relationships, but ultimately our job as a government is to make sure we procure the capability that the Defence Force needs. And that is the approach the minister is taking.

Sue Lines (President) Share this | Link to this | Hansard source

Senator Van, second supplementary?

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

Thank you, Minister. I understand. How would you rate the importance of Germany's participation in the Indo-Pacific as a priority for Australia?

Penny Wong (SA, Australian Labor Party, Minister for Foreign Affairs) Share this | Link to this | Hansard source

I'd make a few points. I suppose I'd go to the underlying proposition—which you're making politely but you are making—which is we think looking at cost and capability is a sensible, prudent and responsible way to handle procurement. In terms of our relationship with Germany, Germany is a major power. It is a major economy. It is central to the strategic and economic position of the European Union. It is an important player internationally and it has been much more forward leaning in terms of its role in the Indo-Pacific and its bilateral relationship with China in recent years. We welcome Germany's continued engagement, not only in our region, but also more broadly. It's a time where countries of similar values who believe in the international rule of law work together and we're very pleased to work with Germany. (Time expired)