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Tuesday, 21 August 1984
Page: 92

(Question No. 673)

Senator Hamer asked the Minister representing the Minister for Defence Support, upon notice, on 29 February 1984:

(1) What is the total of the 'offset' debt owing to Australia for defence purchases made overseas.

(2) Which countries owe an 'offset' debt to Australia, and what is the approximate amount of each debt.

(3) What are the ranks of the people directly concerned with handling Australian 'offsets' in the United States.

(4) What qualifications have these persons in marketing.

(5) Has the Department of Defence Support made any projections of what percentage of the 'offset' debt will have to be written off, and what amount does that percentage represent.

Senator Gareth Evans —The Minister for Defence Support has provided the following answer to the honourable senator's question:

(1) The value of the outstanding offsets commitments arising from defence purchases cannot be stated with precision as the recording system in use until recently did not distinguish between offsets and other elements of work undertaken locally under the Australian Industry participation (AIP) procedures.

it is impracticable to identify the ineligible elements.

recently initiated changes in record keeping should correct this problem.

the total current outstanding obligation for civil and defence purchases, including AIP, is approximately $1,000m. However, a substantial part of this amount is subject to agreements which still have several years to run. The Government is taking steps to ensure these will be substantially fulfilled.

(2) Offsets obligations are perceived primarily as a contractor-specific rather than a national responsibility. In addition the identification of outstanding offsets on a national basis tends to reflect the value of purchases made from that country rather than the degree of compliance with the policy. The following figures are the most recent available and include offsets against both civil and defence purchases and some non-offsets elements of AIP.

$m U.S.A. 854 U.K. 6 Germany 58 Japan 28 France 56 Other 3

(3) The Department of Defence Support has one Engineer Class 4 who handles offsets and other departmental interests in the Australian Embassy in Washington . Defence have a substantial presence in Washington led by the Head of Australian Defence Staff, and involving a number of senior service officers and defence civilian staff, many of whom are involved to a greater or lesser degree in offsets activities. There is also a staff group in the US dedicated to the F/ A-18 new tactical fighter project similarly involved in offsets aspects of the project. Australia is also funding the employment of a US Government officer located within the US Department of Defence to identify bid packages capable of being quoted against by Australian industry under the offsets policy.

(4) None. However they do have the technical and engineering qualifications essential for assessment of offsets proposals in the context of Australias's industrial capacity. The marketing expertise to take advantage of the offsets opportunities is seen to properly rest with Australian industry.

(5) No such projections have been made as it is not the practice to write off such commitments. An offsets obligation once incurred remains current until fulfilled. Offset performance against existing obligations will play an increasingly important role in the award of future contracts.