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Wednesday, 29 February 2012
Page: 1226

Defence Procurement


Senator PRATT (Western Australia) (14:56): My question is to the Minister for Manufacturing and Minister for Defence Materiel, Senator Carr. Can the minister inform the Senate of what the government is doing to help the local industry build the capabilities we need to support the Australian Defence Force?


Senator CARR (VictoriaMinister for Manufacturing and Minister for Defence Materiel) (14:57): Senator Pratt, thank you very much for the question. Today I announce the preferred tenderer for a new $300 million defence contract. That contract is for the repair and maintenance of the Anzac class frigates. The preferred tenderer is Naval Ship Management Australia, a joint venture between Babcock and United Group Infrastructure. The work will be based out of Perth. This contract is the first of what I trust will be many contracts reflecting a new approach. For too long local suppliers have complained about hand-to-mouth contracts. What we want to do is to provide incentives for long-term investment in Australian-based companies and Australian workers. This is a five-year contract which allows us to judge the performance and allows industry to invest in its own future with confidence. That is a good approach for industry, it is a good approach in terms of jobs, it is a good approach for the Navy and it is good for the taxpayer. This is consistent with the approach that the government is taking in all forms of procurement.

We have long argued that, when it comes to buying Australian, we can simply not get enough. But that does not mean that we should buy Australian at any price or on any terms. What the government emphasises is that we are not in the business of accepting second best. What we argue is that we should reject the assumption that local industry cannot compete in terms of global competitiveness. We reject the notion, and the small-mindedness and fearmongering of those opposite. This is a country that can do great things, and, I think, we can build high-tech, high-wage, high-skilled jobs in Australian manufacturing. We want to ensure that all our people share in the prosperity that they all have a right to expect. (Time expired)


Senator PRATT (Western Australia) (14:59): Mr President, I ask a supplementary question. Can the minister please tell the Senate what role defence procurement plays in supporting Australian manufacturing?


Senator CARR (VictoriaMinister for Manufacturing and Minister for Defence Materiel) (14:59): I would indicate, Senator Pratt, that every working day the DMO is spending some $45 million. This year it will spend more than $10 billion, and 54 per cent of that, $5½ billion, will actually be spent in Australia. So defence procurement is in fact vital for our manufacturing base in this country. It supports some 27,000 jobs. It builds skills in industrial capabilities and it generates spin-off innovations that benefit many other manufacturing industries.

These are some of the most creative and ambitious firms that operate in this country. We want them to grow and we want them to be able to integrate more effectively into international supply chains. So we want them to diversify and to find opportunities in other sectors outside of defence. Just as our athletes do not face global competition without training and support, nor should our firms. We are working with our manufacturing firms to build on their strengths, and I am absolutely confident— (Time expired)


Senator PRATT (Western Australia) (15:00): Mr President, I ask a further supplementary question. Could the minister please further advise the Senate what specific assistance the government is able to provide to local defence suppliers?


Senator CARR (VictoriaMinister for Manufacturing and Minister for Defence Materiel) (15:00): This is a country that should dream large. And, unlike the knuckle-draggers on the other side of the chamber, we are committed to ensure that this country achieves greatness. We aspire to improve the opportunities for all our people both in terms of—

Opposition senators interjecting

The PRESIDENT: Senator Carr, I think you might just resume your seat for a moment until we get a little bit of order. I know there is a little bit of excitement in the chamber, but if you could just calm down for another 41 seconds so Senator Carr can complete his answer.

Senator CARR: We would not expect the philistines opposite to understand this fundamental premise, but we do have a serious situation in this country. This is a government that is committed to ensure that we invest in manufacturing, we invest in Australian jobs and we invest in prosperity. We are investing some $445 million in programs specifically aimed to assist Australian defence industries through the period 2018-19. We are looking at ensuring that we have the skills available to meet the requirements of our defence forces, to meet the skill requirements of our defence companies, and to ensure that we provide the necessary capabilities so that Australian industry can—(Time expired)

Senator Chris Evans: Mr President, while I would like to hear Senator Carr expand on those views, I suggest that we put further questions on the Notice Paper.