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Tuesday, 10 March 1998
Page: 910

Mr ALLAN MORRIS (10:50 PM) —I rise tonight in the adjournment debate to announce that New Zealand will be purchasing an extra Anzac frigate. As a former minister for defence you, Mr Speaker, will find it somewhat strange that an opposition backbencher can make such an announcement, but there is no doubt it is true. It was effectively announced last week by the New Zealand minister.

I draw the attention of the House to his press release and his speech of 4 March at Whangarei in which he talked about the fact that New Zealand currently earns about $70 million a year from defence work, mainly on Anzac frigates. He said that New Zealand won the contract to provide the two modules for ships seven, eight, nine and 10. He said they were in competition with Newcastle, New South Wales, which surprised us because we were not able to bid for it. This means they will have total earnings of about $130 million or $25 million to $30 million in additional earnings in that economy. He then goes on to say that if the government should decide to order another Anzac frigate, ship No. 11, then that will mean even more work.

He then presents an argument as to why they should order an extra vessel. Throughout the speech there are clear indications that the New Zealand government is about to sign up for an extra ship. I am happy about that. The contract in August 1989 was for eight vessels for Australia and two for New Zealand, with the option of up to two more at the same price. From recollection those option dates have been extended somewhat, but it is clear that New Zealand is about to bite the bullet and order the extra vessels. From our point of view as a country that is healthy. Why are they doing it? They are doing it because they have been given a big bonus. They have been given an extra $30 million worth of work as a sweetener.

The shifting of this module work from the Hunter to New Zealand—and the minister said that they won it in competition with Newcastle when Newcastle was not even allowed to tender for it—is clearly not an economic matter. The fact that the yard will need to spend $3 million, 10 per cent of the earnings, in making itself ready to do the work indicates that it is not competitive. What it does show is that this government is deceitful.

I draw the attention of the House, and your's in particular, Mr Speaker, to the Senate estimates committee Hansard of 10 October 1989. Dr Malcolm McIntosh, the then head of defence purchasing—you will recall Malcolm, Mr Speaker, he went to England to head defence procurement for the British government—was questioned in some detail by then Senator Baume about the potential for ship building despite what had been put forward by the tenderers. At page 333 of that Hansard Dr McIntosh stated:

We have not had a proposition to shift any of those bits. If a very large bit, modules for example, were proposed to be taken out of Newcastle, then the view of the Government would have to sought at that time.

Senator Baume said, `Wouldn't that mean you can move it to the cheapest location?' Dr McIntosh said, `That, in the end, is what it comes down to, because under any contract you can do that; it's up to the customer.' He continued:

If the supplier proposes some change it is up to the customer whether he or she accepts it or not, and it is up to the Government.

In other words, the contract that was signed required the government's approval to move work from location to location. That approval has obviously been given, and given months ago, otherwise tenders would have been called for last year. We hear this not from our minister, not from our government, but from the New Zealand minister, as a sweetener, to soften up his public, in order to change attitudes so that there will be support for the extra expenditure, offset by the increased earnings.

What this government has done—and I do not doubt it was discussed with the New Zealand Prime Minister—is to say to New Zealand, `Look, buy the extra ship and we'll give you $30 million worth of extra work, plus the extra on that ship as well.' Where will it come from? From the electorate of Paterson, from Tomago, and not a word about it. The Minister for Defence (Mr McLachlan) has been silent for the last week, the member for Paterson (Mr Bob Baldwin) denies any knowledge of it, and this kind of sleazy deal has gone on. It is a disgrace to this parliament. (Time expired).