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Tuesday, 22 November 2011
Page: 9256

Senator HUMPHRIES (Australian Capital Territory) (23:27): We live in a world of growing geopolitical complexity and we see changes around us everywhere, but we particularly see changes of great complexity taking place in our region: the rise of China and India as commercial and military powers; conflicts in Afghanistan, Iraq and Sri Lanka; fragile democracies emerging in East Timor and the Solomon Islands. All of this suggests that Australia needs to have a vigorous, robust and dynamic Australian Defence Force. At the heart of such a beast is the need for a well-planned, well-implemented defence procure­ment program, a program aligned with the strategic objectives of the nation, where those objectives have been identified through a robust and vigorous process.

In 2009 Labor claimed to have made an important step along the path towards this objective when it released its long-awaited defence white paper, to which Senator Gallacher has just referred. This was Labor's vision for the defence of Australia in the newly described 'Asia-Pacific century'—a grand plan for the future of Australia's defence capability. A feature of the 2009 white paper was the government's plan to create what it called Force 2030, the Australian Defence Force of the future: versatile, responsive and hard-hitting, truly a force for the future. The price tag that came with that new Force 2030 at the initial stage of this plan was somewhat unclear. Originally, in the white paper there were just two pages out of 130 indicating what the costs might be. The estimates initially appearing in reports in the media of $130 billion were, after some pressure from the opposition, supplanted by a much larger figure of something in the order of $275 billion. With such a monumental plan of strategic importance and with a time line of over 20 years, one would expect the government to be able to follow through very quickly and diligently on the parameters of this sort of plan. Indeed, even today I hear Senator Gallacher wax lyrical about what this plan means for Australian defence.

But in looking at the experience of this government with respect to implementation of other major grand plans—things like the pink batts program, laptops in schools, the school halls and so forth—one has to wonder just how well it is able to roll out the most grand of its grand plans, and there are few grander than Force 2030, the 2009 white paper. Labor is certainly going through the motions of visiting SAS troops, going to ships setting sail from docks in Australia to the Middle East, accepting new fighter jets that were ordered by the Howard govern­ment and disposing of old equipment prominently to the RSL and community organisations, but, when you look more closely at what this government is doing with respect to defence acquisition, cracks appear and the situation is somewhat less reassuring.

The problems of recent months with our amphibious fleet have been well documented. It is a gap that has now been partly plugged with the acquisition of HMAS Choules. The government has been forced to lease ships on a short-term basis to fill the capability gap that has opened up. Many of our submarines, in fact our submarines generally, are barely fit to go to sea, and the minister seems capable only of commissioning more reviews, which itself leads to further debates.

Senator Farrell: That is not true.

Senator HUMPHRIES: It is, Senator.

Senator Farrell: They are good ships; they are well made.

Senator HUMPHRIES: They might be well made but they are not going anywhere most of the time. They are sitting in the dry dock in Adelaide.

Our combat troops in Afghanistan have been coming apart at the seams, or at least their uniforms have, quite literally. Outcomes like this are not, with respect, 'getting it right' for defence procurement, which means ultimately a loss of defence capability.

Just two years into the 2009 white paper, the white paper itself is now hopelessly behind schedule, and some would argue it is unachievable and effectively redundant. Two key themes stand out to demonstrate Labor's incompetence in managing the defence portfolio: its failure to make the decisions necessary to keep Australia's procurement moving forward and its failure to properly support defence industry, a vital strategic partner for the defence acquisition program.

Since the 2009 white paper was released the Labor government has deferred up to $14 billion in procurements planned in the Defence Capability Plan. The rate of first and second pass project approvals has slowed dramatically, with only about $8 billion worth of projects being approved in the first three years of the Labor government, which is well behind what the white paper requires. This contrasts with $25 billion worth of approvals in the last three years of the Howard government, including the Super Hornet fighters, which Labor only recently accepted the last of. In the two years leading up to June 2011, Labor made just 10 out of 29 major procurement approval decisions—29 planned and only 10 achieved. Paralysis such as this has consequences, and the government continues to fall further and further behind.

As if this is not bad enough in terms of meeting the expectations that have been created for a more effective Defence Force, we also have serious implications for defence industry. The defence acquisition budget for 2011-12 was $5.3 billion, but in 2012-13 this is reduced, in spite of this grand ambitious plan, to $4.5 billion—a 15 per cent reduction. Why? Because Labor is obsessively chasing savings in order to deliver its somewhat illusionary budget surplus of 2012-2013. We are yet to find out what the MYEFO of next week holds for the defence budget. It has already been signalled by the Minister for Defence that the department will experience further cuts at that time. As I said, there are implications for other parts of the economy. The defence industry in particular is a casualty of this sort of stop-start approach. Labor's failure to follow through on the plans outlined in the Defence Capability Plan is undermining trust, which affects investment, industry planning and jobs. In the last 12 months alone, as many as 1,500 jobs have been lost from the defence sector, and more people and resources are being redirected as we speak. Companies are being forced to carry significant cost while the government inexplicably delays making decisions.

This is not a problem with procurement systems or policies. It is simply a failure of government to make the hard decisions necessary to keep this system moving forward and to give people certainty. Small to medium enterprises suffer particularly in this regime. They do not have the capacity of the larger companies, some of which were mentioned by Senator Gallacher, to sustain long periods of paralysis on the part of government when it comes to defence decision making. We have already seen a number of small defence companies go bust in the last few years. That is extremely concerning when the government is trying to grow the sector. Other companies are simply leaving the industry or shutting down their Australian operations. I have spoken with representatives of a number of companies extremely concerned about the inability of the government to make key decisions. Without in-country capability and innova­tion, Australia will lose leverage and with it our industry and defence self-reliance. We need our domestic defence industry to maintain our capability edge—vital to a relatively small force such as Australia's.

We in the coalition are committed to reversing some of these dangerous trends of recent years. For example, we saw in 2009 then Prime Minister Rudd—perhaps in the future Prime Minister Rudd—inexplicably cancelling Australia's participation in the Broad Area Maritime Surveillance, BAMS, program, costing Australia $100 million. But now the government has bought back into this program, having realised that this is indeed an important tool to ensure a more effective Defence Force. The litany of failure to make decisions is particularly of great concern. We can do better and, in particular, we need to do better if we expect the Australian defence industry to step up to the mark and produce good-quality products which are competitive and produce value for money for the Australian taxpayer.