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Monday, 21 November 2011
Page: 13101


Mrs GRIGGS (Solomon) (16:53): I rise to speak on the Defence Trade Controls Bill 2011 and the related Customs Amendment (Military End-Use) Bill 2011. The purpose of the Defence Trade Controls Bill is to give effect to the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation. It will align Australia's export controls with international standards and deliver an administrative system to enhance existing defence export controls. The introduction of this bill into the Australian parliament has, as my colleagues have said, come at a significant time in Australia-US relations, with the US President, Barack Obama, visiting Australia last week, including visiting my electorate of Solomon. His visit also coincided with the 60th anniversary of the ANZUS alliance and the announcement that the US will boost its military presence in Darwin in my electorate.

By way of background, in September 2007 Prime Minister Howard signed the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation. Six months on, on 14 March 2008, the Rudd government signed off on the subsequent implementation arrangements. The implementing legislation was then passed by the US congress two years later, on 28 September 2010. Approval for the treaty was given the go-ahead a day later, on 29 September 2010, by the US Senate, and it was then signed off without the regulation impact statement because it was not required for the treaty bill provisions in the act. Instead there are regulation impact statements that deal with proposals to improve the existing defence export controls.

The main purpose of the Australia-US defence trade control treaty is the removal of certain agreed defence export restrictions between Australia and the US so that a more cost-effective and productive system can be facilitated between both countries. Under the current US export control system, international trade in arms regulation licenses are sought for every single trade transfer. The treaty will ease the restrictions associated with the current system by the creation of a comprehensive framework that will facilitate defence trade without prior government approval. The coalition will always support any mechanism that reduces red tape for business. We understand that business works better with less red tape when they are dealing with governments. The new process is expected to improve interoperability between both countries, which is of particular importance given the involvement of Australia, and indeed the Northern Territory, and the US in current combat operations such as those in Afghanistan.

It is proposed that the treaty will improve administrative delays caused by export control systems. This can only boost delivery times for new defence projects and enhance business opportunities for Australian companies looking to work with US contracts. Defence officials have confirmed that there will be ongoing compliance costs for businesses in the approved community and that this issue was raised by industry groups during the consultation phase. Other benefits include the fact that individual licences are no longer required for each export. We hope that this will allow for a swifter movement of eligible defence articles between approved Australian and US communities, therefore cutting delays in delivery times.

At the moment, most of the trade in the existing export control regime concentrates on physical goods, but with technology increasing—and we are in the middle of a technology boom—many defence export services can now be sent through brokers, using the internet. The gaps in Australia's existing defence export controls can be categorised into four areas: the intangible transfer of technology; the provision of services relating to defence, strategic goods and technology; the brokering of supply of these goods, technology and related services; and the export of goods intended for a military end use that may prejudice Australia's security, defence or international relations.

Another control which will be included in the series of Australian defence export controls is a new provision to address the export of non-controlled goods for military end use. Currently they are not included in this bill but are dealt with under separate amending legislation. They are, however, contained in the existing powers over the physical export of goods contained in the Customs Act 1901. The purpose of that separate legislation is to provide the Minister for Defence with a catch-all power to issue a notice to prohibit the export of goods which are not otherwise regulated to a particular place or person where the minister considers the export would prejudice Australia's security, defence or international relations.

As I said earlier, the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation was negotiated and signed without a regulation impact statement being produced. There was wide consultation with the defence industry on this bill. The reaction has been mixed, with concerns raised about the role of the United States Department of State in approving Australian companies or individuals as trusted members of the Australian community. The process of gaining such approval is seen as cumbersome, costly and time consuming, and is without a right of appeal. Coupled with this is the lack of confidence within the defence industry in the Australian Defence Export Control Office, DECO, making consistent decisions on what strategic goods can or cannot be exported.

In my electorate of Solomon we have an emerging defence industry. At present, my electorate is home to about 10 per cent of the Australian Defence Force combat personnel. Last week there was a major announcement in Darwin by US President Barack Obama that the US will boost its military presence over the coming years, and this is all set to start next year. I welcome the investment that this partnership with the US will make in the Northern Territory economy and the expected increase in expenditure in the coming years. It sends a clear message that the US wants to continue its relationship with Australia—and in particular with the Northern Territory. The symbolism of basing troops in Darwin is significant. Two weeks ago Darwin was named the No. 10 place to visit by Lonely Planet. Then last week we had President Obama visit us. This is all pretty good for Darwin, and it is no wonder that everyone is talking about us.

So I am pleased that there will now be a bigger focus on the sector and indeed on my electorate. As I said, the Northern Territory has a long history of supporting Australia's defence forces, and I welcome the contribution to the Northern Territory economy. The primary focus of defence support in the Northern Territory is through equipment and infrastructure. According to the figures provided to me by the Parliamentary Library, the Northern Territory as at 30 June 2011 had a $220 million defence industry turnover and over 5½ thousand permanent defence personnel, with 903 defence reserves and around 400 defence public servants. This equates to about 5.8 per cent of defence expenditure in the 2009-10 budget.

As with most businesses, defence support businesses seek longer-term contracts and opportunities to provide certainty of income to enable them to invest in facilities, the workforce and equipment. A number of concerns have been raised with me recently that local suppliers are not receiving regular and continued contracts, which is having a negative impact on their businesses. So, while I am supportive of the bill in principle, it is essential to make sure that local businesses and suppliers will not be negatively impacted, because what the territory needs is a vibrant small-business sector. Everyone knows that small business is the backbone of the Northern Territory.

The coalition remains committed to supporting the local defence industry. The coalition supports these bills and will seek to have them referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee when the bill goes to the Senate. As my colleague the member for Fadden said, the reason for doing this is to ensure that the concerns raised by the industry are dealt with before the legislation is passed into law.