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Monday, 27 February 2012
Page: 901

Senator MARK BISHOP (Western Australia) (22:23): In November last year I spoke on the subject of procurement, with an emphasis on skill shortages and training. I spoke of the competing demands for skilled workers coming from the mining industry. I also expressed concern at the apparent lack of effort on high-tech engineering, especially in systems engineering and integration. These are areas of extreme importance in the new era of defence capability, development and maintenance—areas to which so much funding is being allocated by the Commonwealth government. In this I was stimulated by some worthwhile submissions to the Senate Foreign Affairs Committee inquiry by several submitters—namely, the Association of Professional Engineers, Scientists and Managers of Australia and the Defence Systems Innovation Centre, located at the University of South Australia and clearly in that state. I set out the current skills development initiatives in defence and in industry, expressing quite significant misgivings about their adequacy.

I was therefore pleased to see the release of the initial Defence Industry Workforce discussion paper issued by Skills Australia. This paper was released by the minister only a couple of weeks ago, on 1 February this year. The task force behind the report is comprised of a complete raft of government agencies. Defence industry representatives were also on board. In this I hoped to see a thorough professional assessment of the scope of the task. However, I must say at the outset that I am a little disappointed at that publication.

If its purpose was and is to quote 'stimulate discussion and debate', it is far too general, simply because the picture it paints is very incomplete. In fact, given the strength of membership from industry generally, as well as a senior officer from Defence, I wonder whether any of them had any serious input at all. Indeed, given the strategic importance of this task, I wonder why Defence, with DMO itself, has not done this work already. It is, after all, a fundamental plank of any industry policy. In short, the paper adds little to our knowledge.

Let me summarise what I think is needed from this task force if it is to be treated seriously and have serious input. First, on the demand side we need an accurate assessment of the implications of the current capability plan for both design and production. The same is needed for materiel in service—that is, the context in which this problem of skill shortages is to be considered. You need to look at the scope and nature of the industry task in a total defence framework. That should include an assessment of the technology with respect to its sophistication for each of the three services. I expect this has already been done. It should include the maintenance task, none of which should be a surprise to industry—they, of course, having many multibillion-dollar contracts going over decades and decades. After all, the capability plan, while huge, should be sufficiently well known and understood by industry.

Industry would be only too aware of their own internal skills needs, one presumes. In assessing this demand, the task force also needs to more finely delineate between the skills needed—for example, trades skills, project management skills, and the higher level graduate and post graduate qualifications needed. Specifically, we need to see greater specificity with respect to those skills, reflecting the high degree of specialisation necessary from basic trades through to the most difficult systems integration tasks. To that end, I suggest the generality of the descriptors used in the discussion paper are not very indicative at all of the range of skills needed.

The discussion paper correctly identifies the competition on the demand side. However, I suggest the assessments significantly underestimate its strength, especially from the mining and support industries sectors. I refer again to the work of Port Jackson and Partners issued by the ANZ Bank last August. I would suggest in line with that report, recognition needs to be given on the supply side for significant new and re-training programs. They will be needed to cope with rapidly changing nature of the workforce driven by economic restructuring already seriously underway.

We know that the manufacturing industry in this country is already under pressure, especially in the case where it is competing with cheaper imports against a very strong dollar—and I would suggest a dollar this is going to both remain high and go higher over the next 10 to 15 years.

On the supply side, I accept the reservation that industry has expressed that continuity of work poses for stability of investment. It is particularly the case within their manufacturing workforce. Over the next 30 years the defence procurement budget is set at almost $300 billion. There is high-level technical input and therefore considerable reliance on reach back to overseas company headquarters where R&D is usually concentrated. I seek leave to continue my remarks.

The PRESIDENT: Time has expired for the debate. You can continue that contribution in another adjournment debate.

Senate adjourned at 22:30