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Monday, 2 March 2015
Page: 1565


Mr CONROY (Charlton) (10:13): I appreciate the opportunity to briefly comment on Audit Report No. 52, Multi-Role helicopter program, and the findings of the Australian National Audit Office and our committee on this project. As the chair said, this is a $4 billion project that is now delayed over four years. That delay stems from acquisition decisions made in 2004. When the acquisition strategy was developed, the desire of the government of the day, quite understandably, was for a military off-the-shelf option and they thought they were acquiring that with the NH90 multi-role helicopter. Unfortunately, that helicopter was developmental—as was the other option; the US option—and Defence and the DMO failed to properly take account of that and change the acquisition strategy when the government of the day effectively selected a developmental option.

The chair is quite right; all the problems that we are seeing now arise from that original decision. We need to get the balance right. The Bushmaster program was held up as a poster child of problem projects for many years because it was developmental, but in the end we have got a fine platform that survived over 50 explosions on deployment and saved the lives of countless ADF personnel. We have to get the balance right.

The key lesson in this audit was that if you are going for a developmental project then understand you are going for a developmental project and take the appropriate risk mitigation measures. I am happy to say that DMO and Defence have improved, through the Kinnaird process begun under the Howard government and continued by the Mortimer review under the last Labor government, the projects of concern process instituted by Minister Greg Combet and the major projects report process started by the JCPAA. All of those things are contributing to improved Defence performance.

The specific recommendation in this report goes around measuring local content. We have shifted from specifying a nominal figure of local content to be delivered in Defence contracts to an emphasis on winning work in global supply chains. That is absolutely the right thing to do because that means we are not trying to manufacture kit for 47 Australian helicopters. It is about getting into the global supply chain for thousands of helicopters around the world.

The point of our recommendation is that we should be measuring that contribution effectively and we should be reporting on that to parliament and the Australian people so they understand the jobs benefit of winning work on Defence contracts. I commend the entire report to the House. I thank the ANAO, the agencies and the committee secretariat for their excellent work on this project. I also thank the committee chair for his collegial approach to this report and every other report I have been involved in.

Report made a parliamentary paper in accordance with standing order 39(e).

The SPEAKER: Does the member for Boothby wish to move a motion in connection with the report to enable it to be debated on a future occasion?