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Friday, 20 March 1987
Page: 1079

Senator SIDDONS(12.14) —In debating the White Paper on defence it is of some encouragement to me to hear that there is a measure of cross-party support for this paper. I congratulate the Government on its production of such a paper. I am particularly pleased that the paper has as its central theme a self-reliant defence policy. That is surely what we need and, presumably, that is what the Government's principal objective will be from now on. I do not want to spend a great deal of time talking about alliances or about how we can better co-operate with our neighbours, as I am sure that will be mentioned at great length before this debate is concluded. I particularly want to take up the point that was first raised by Senator Cook and then later by Senator Watson. If we are going to have a self-reliant defence objective, surely we have to start with the objective of greater self-reliance in the production of our defence equipment.

This paper takes a broad, long view and takes us into the twenty-first century. But that is only 13 years away, so it is not as far into the future as we might think. The paper envisages that in the next 10 to 15 years we will be spending something like $25 billion on defence. That is an enormous amount and it is almost all going to be spent on equipment from overseas. As Senator Cook pointed out, the paper makes great play of the fact that we are an ally of the United States of America, and we therefore have preferential treatment in the buying of FA18 and F111 aircraft, FFG frigates and so on. I have to query whether some of this highly sophisticated imported defence equipment is what Australia needs if it is to be self-reliant. Let us discuss the FA18. It is encouraging to know that there is a measure of support on all sides of the Parliament for this piece of equipment on the basis that it is a very good fighter, it is the state of the art and so on. But does Australia need such a sophisticated aircraft? For a start, it has a range of only about 500 kilometres, so presumably it has not got the capability of flying from Melbourne to Sydney without in-flight refuelling and the equipment needed to carry out that in-flight refuelling is very complicated and extraordinarily expensive to acquire.

If our links with the United States were cut off by some means, could we maintain these aircraft? We used to have an aircraft industry, but I am afraid the Government allowed it to wither away to the point where it can now play only a very minor role in providing our defence equipment. So our Air Force is completely dependent on the United States for the maintenance of its aircraft. I have to question whether this is wise policy. It would seem to me that a much better approach would be to have a light and highly mobile defence force very largely supplied from local resources. There is no reason why we could not have negotiated an arrangement with an overseas supplier for an aircraft which could be entirely made in this country. There is really no reason why we could not have set about the task of designing our own aircraft, particularly as Sweden, a country with only eight million people, was able to do so. Sweden has designed not only a fighter aircraft but also a bomber aircraft, a trainer aircraft and so on, and all are made in Sweden. If Sweden, a much smaller nation than Australia, can do that, there is no fundamental reason why we cannot do it.

Senator Robertson —That is not really logical, Senator, is it? Sweden is a smaller country, with slightly different resources and slightly different problems from Australia, surely?

Senator SIDDONS —Well, it is a very small country. It does have a manufacturing base.

Senator Robertson —That is right, but it has different problems from what we have.

Senator SIDDONS —We had a very efficient aircraft industry in this country up until a few years ago.

Senator Robertson —Until they produced the Nomad?

Senator SIDDONS —No, I am saying that for the first 10 or 20 years after the war it was a very efficient industry. It could have been deployed, but it was not, and it is a great pity. For instance, we are buying 75 F18s at a cost of $4.2 billion. I suggest that that is a very vulnerable position to be in. If even a percentage of that $4.2 billion had been invested in developing an aircraft manufacturing capability and in developing our skills to design and equip our aircraft, we would be in a very much safer position. All we get from spending $4.2 billion is 75 aircraft. We have no factory to maintain them and no capability to develop new aircraft for new needs.

Some of the decisions that have been made in the past about our defence procurement have been abysmal. The F111 fiasco is well known to anybody who read the papers during the 1960s. Certainly there was a Liberal government in power at the time, but those planes were purchased without any contract being signed as to what the price was to be. The plane itself was inadequate because it was a compromise between an aircraft that could be used as a land based plane and as a naval plane too. We finished up with the worst of both worlds and with a plane that is no longer in production in the United States. So in the F111 we are stuck with a very unsatisfactory aircraft for Australia's needs. There is not much doubt about that. We are also stuck with a very complicated state of the art aircraft in the FA18, which we cannot maintain.

Some four or five years ago there was talk of closing down our Government factories in Bendigo. I was a member of a committee that looked into that and I was particularly impressed with two things. First of all, the Bendigo Ordnance Factory was, in my view, efficient. It was staffed with a dedicated management, which had come to grips with some very complex problems. At that time we were considering purchasing the Panther tank from Germany and the factory set about manufacturing the gun that was to be used on that tank. It produced one and then tooled up to produce more, but for some unknown reason the German suppliers were able to convince the government of the day that it was better, more economical or whatever, for the whole of the tank to be imported and they said it was not necessary for us to manufacture at least a part of it. We had the capability to do so, but the Government factory was not allowed to do that. That was one of the major reasons why it was operating at a loss; it did not have sufficient throughput in the factory to cover overheads.

A very similar fiasco occurred with the procurement of heavy artillery for the Army. The Ordnance Factory at Bendigo quoted and I think it was the lowest tenderer at the time, but the American supplier of the artillery said that it could produce it more quickly, and on that basis it got the order. Once it got the order and was committed, it transpired that there was an American law which said that American defence needs must take precedence over any other defence contracts, and there were delays and delays in acquiring field artillery for the Australian Army. If we had placed the order locally, that equipment would have been manufactured in Australia, supplying the Army well ahead of the time of its being produced in the United States.

I raise these matters only as examples of what has gone on in the past and what presumably will go on in the future, because there is very little support in this paper for local procurement and manufacture, and that is very much to be regretted. If we were prepared to fly aircraft which were more flexible, cheaper and of lower technology, we could produce them at much less cost than those we presently fly and we could have a much more reliable defence capability. We need defence equipment that can be used in association with the United States, but we also have to have defence equipment that can be used in association with our allies in New Zealand, Malaysia and Papua New Guinea. Above all, I stress that there is this great need to have defence equipment that can be maintained and produced within the country. If just a small percentage of the total outlay of $25 billion to which the Government is committed were to be directed towards greater local procurement, to developing factories that can continue to supply our defence needs, Australia's defence position would be very much enhanced.