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Monday, 29 October 2012
Page: 8140


Senator RONALDSON (Victoria) (12:01): I rise today to speak on the Defence Trade Controls Bill 2011 and the Customs Amendment (Military End-use) Bill 2011. Together, these bills give effect to the Treaty between the Government of Australia and the Government of the United States of America concerning Defence Trade Cooperation. This bill does a number of things. It provides for controls on the supply of Defence and Strategic Goods List listed technology and services related to DSGL technology and goods; it creates a registration and permit regime for the brokering of DSGL goods, technology and related services; and it creates offences and imposes penalties. The bill also aims to strengthen Australia's export controls to align them with international best practice.

I turn to the background to the bill and the treaty. The Treaty between the Government of Australia and the Government of the United States of America concerning Defence Trade Cooperation was entered into by the Howard coalition government on 5 September 2007. It emphasised the need to create a framework for two-way trade between Australia and the US in defence articles between 'trusted communities' without the need for export licences. The signing of this treaty reflected, and reflects, the strong ties and relationship between Australia and the US and the robust mutual trust that exists between our two nations, and which was particularly built up during the years of the last Howard coalition government. In signing the treaty, it was anticipated that administrative delays associated with the export control systems would be significantly reduced and that there would be, as a direct consequence, reduced delivery times for new defence projects and improved business opportunities for Australian companies to participate in US contracts, and vice-versa.

Of course, under Australia's dualist system of international law, there is an emphasis on the difference between national and international law, which requires the translation of treaties, conventions and the like into domestic law. Without this translation, international law does not exist as law. That is, in the Australian context, international law has to be national law as well, or it is no law at all. As such, this bill translates the requirements of the treaty into national law, albeit more than five years after it was signed. However, the original bill without any amendments does a poor job of this translation. While red tape is reduced in some areas to reduce administrative delays associated with the export control systems, it does a half-hearted job with reducing regulatory burdens and red tape in other areas, with unintended consequences arising from the bill as currently drafted.

There are government amendments to the bill before us which stem from the Senate committee's preliminary report into the bill on 15 August 2012. I point out that these government amendments were not—I repeat not—seen by the Senate committee inquiry prior to it releasing its final report on 10 October 2012. These government amendments appear to ameliorate only part of the concerns which are raised, for example, by university heads who told the Senate inquiry into the bill that, while the treaty was intended to cut red tape for defence trade between Australia and the US, the bill as drafted would act to curb vital scientific and medical research and training—that is, this bill increases regulatory burdens. This is because attached to the bill is the Defence and Strategic Goods List, as I mentioned before, which is an extensive register of thousands of banned items that are in regular use in medical and scientific research and in teaching. Chemicals outlawed because they may be used in the creation of weapons are also used for the development of medicines, with many of these goods being normally held by universities to be used for teaching students and for research. The bill therefore, in seeking to limit the transfer of such sensitive material, would have had—and still seems to have even with the government amendments—an unintended impact on medical research, the sciences, computing, engineering and anyone needing to access or transfer these materials for legitimate reasons. Furthermore, the prohibition in the bill on the transfer of knowledge to foreign citizens would have affected, and still appears to affect, international students enrolled in any of these areas of study and would preclude or limit those academics and researchers working on collaborative projects with specialists from other countries. So the bill, even with the government amendments, remains short-sighted in not considering these unintended consequences—surely another sign of an incompetent government in a rush and not properly considering the details of what it proposes.

The Labor government seems to have listened to only part of the recommendations of the Senate inquiry. In particular, it has ignored many of the recommendations made by the coalition, which are based on the many submissions received relating to the effect on medical research and so forth. It is a wonder that these problems and the details were not considered earlier, when the bill was first drafted, especially given the five years the government has had to consider the content of the bill after the treaty was signed. It is also a wonder that the Labor government have seemingly put so little effort into looking after the finer details of this bill given Australia's important and crucial relationship with the US. This is a bill that should have been given the utmost attention to detail by the government. Instead, the Labor government seem willing to act with a lack of interest with respect to this bill and with respect to our strong relationship with the US.

I note that on the US side they were ready to proceed with this two years ago as, in contrast to Australia, the US has a mixed monist-dualist system in dealing with international law, in that international agreements enter into force immediately after two-thirds of the US Senate has given its advice and consent under article 2, section 2, clause 2 of the US Constitution. So a treaty, in and of itself, is already made law in the US when consented to by the US Senate, whereas in Australia a treaty is not in force until it is translated into national law through both houses of the Australian parliament. Of course, legislation in the US is also often introduced to accompany the consent to a treaty so as to legislate as to the finer details of that treaty. Accordingly, the US Senate consented to and ratified this treaty on 29 September 2010, two years ago. I repeat: two years ago. The US congress also passed implementing legislation on 28 September 2010, implementing the finer details of the treaty. So it has been the Labor government holding up the ball in this instance. The US was ready to go two years ago.

This is yet another Labor failure in getting things done quickly and properly, particularly when it comes to defence. Just last week the Chief of Army, Lieutenant General David Morrison, warned that further funding cuts to Defence would potentially risk soldiers' lives. This is after the May budget, which saw Labor take $5.5 billion out of Defence in an attempt to achieve an elusive budget surplus. He said:

We are approaching a point where doing more with less risks becoming a cavalier disregard for the ability of forces to survive against credible peer competition.

He also said:

The current … fiscal climate poses a very real risk to the army's approved plan for development out to 2030.

He also noted the severe cuts to the Army after Vietnam:

I would hate to see the mistakes of that era repeated today, either in the name of misconceived strategy or economic stringency.

The Chief of Army is not alone in his condemnation of Labor's scant regard for funding the nation's Defence Force. He has been joined by the former CDF, Peter Cosgrove, the former Chief of Army, Peter Leahy, Major General John Campbell and the former US Deputy Secretary of State Richard Armitage. Defence funding has been reduced to the point where it is at its lowest level as a percentage of GDP since 1938—only 1.56 per cent of GDP. Next year it will fall to levels not seen since 1937, being only 1.49 per cent. My colleague Senator Johnston also pointed out last week that:

Defence is nothing more than an ATM for Labor …

With the release of MYEFO, Labor confirmed that an additional $119.2 million will be stripped from Defence. So it makes eminent sense that my colleague Senator Johnson states that Labor is using Defence as an ATM in a scrambling attempt to achieve an elusive Labor surplus.

We have even had political correctness gone wrong, with the Air Force under Labor warning staff against wrapping gifts for troops serving overseas in Christmas paper due to cultural sensitivity. As my colleague in the other place Stuart Robert made the point, we might see:

… no Christmas for Christmas.

What is more, not only does Labor seemingly have scant regard for the current state of Defence and Defence personnel, they have scant regard for our military superannuants, as we have seen before with their lack of support for fair indexation.

I refer back to the comments of Lieutenant General David Morrison when he said, referring to Vietnam:

I would hate to see the mistakes of that era repeated today.

There is a significant risk in this country that we have not learnt from the mistakes we made in Vietnam. Indeed, there is a very significant public debate which must take place in relation to our attitude to our younger returning veterans. There are nearly 60,000 young men and women who have served this nation in the last 20 years, which is equivalent to the number who served in the Vietnam War. Indeed, if we repeat the mistakes that we made post Vietnam and fail to acknowledge these young men and women, as we did those who served in Korea, Malaya and Borneo, and fail to acknowledge the challenges facing the partners of veterans then we have learnt nothing at all. That would be a great tragedy, and if that stain on this nation that followed this nation's treatment of those young men returning from those theatres I was referring to before is repeated then we risk letting down another generation of young men and women.

I will return to the bill. Even with these new government amendments it still does not address all the concerns raised by universities, the scientific community and other stakeholders. Furthermore, it increases regulatory burdens in some areas despite the intent of the treaty being to reduce regulatory burdens. It also ignores, in particular, many of the coalition's recommendations as outlined in its dissenting comments in the final Senate inquiry report released on 10 October 2012. The government amendments today try to allow for a phased transition period for universities and the like to allow for:

…a comprehensive education and awareness raising program that will assist organisations to build internal compliance arrangements.

So the government is effectively admitting that there is a regulatory burden for such institutions, and instead of getting rid of this burden or ameliorating the burden they are simply giving them time to adjust. This is not good enough in or of itself, although a transition period is better than just lumping this burden on universities and the like straight away. Mr John O'Callaghan, Executive Officer of the Ai Group Defence Council, made a particularly pointed observation on this bill, which was highlighted in the committee's preliminary report:

I think at the macro level the intent of the bill in regard to the definitions is accepted, but in getting into the detail of the regulations there is a degree of nervousness, perhaps, that was not there previously.

Basically, the Howard government's treaty signed with the US, and its overall intent, passes all tests. It is the translation of national legislation by the Labor government that is the problem.

The committee's dissenting report, signed off by the coalition and the Greens, concluded that this bill, '… is a complex and forward piece of legislation which should not be rushed through the parliament.' The dissenting report also noted that the committee was required to table the report 20 days earlier than requested by the Senate and the government did not allow the committee time to review the government's amendments, which at the time of submission of the report, had not been sighted by any members of the committee. In addition, the dissenting report noted that the committee was not given time to consult further with stakeholders. For example, the committee was not given time to examine legal advice received from a Washington DC law firm, which notes that Australian academic institutions will be subject to a more stringent control regime with a much broader scope than is the case in the US.

What is more, the dissenting report noted that consultation efforts undertaken by Defence on this bill were 'seriously deficient', resulting in unintended consequences for the university sectors. In other words, this bill is still a work in progress. The fact that we still have a work in progress five years after the treaty was signed is shameful. The bill should have been considered in finer detail and a proper bill drawn up at least two years ago rather than now, as the US did in 2010.

However, given this Labor government's incompetence in considering the finer detail, we should not now rush this bill through as it is just because has taken more than five years for Labor to get its act together. That is why the coalition is putting forward amendments to the bill today. We want to protect our ability to remain an innovative country by enabling medical research and the like without burdensome regulatory barriers. Furthermore, the US relationship is one we do not want to get wrong. We need to do things correctly. The Labor government has already failed on this part but that does not mean it should now impose failure on getting it right.

The coalition will support the government's amendments, which allow for a transitory period, even though it was given only two weeks to look at these amendments and to consider their consequences. It is simply not good enough. This is not a perfect outcome but action must be taken to implement this treaty rather than wait forever for Labor to figure out what it is doing.

The coalition recognises that much time has been wasted and that we should not waste any more time in taking action to implement this treaty into legislation. However, the bill, with the government amendments, is not good enough in and of itself. The post-legislative package of reforms proposed by the government is far from ideal. In essence, we do not want to see Australia left in a worse position. In addition, Australian research institutions should not be left in a worse position than their US counterparts, in particular. That is why the coalition is putting out its own amendments which will provide an exclusion for research, education and information in the public domain and will strengthen the Export Controls Steering Group, amongst other matters.

In putting up these amendments, the coalition has listened to many of the concerns of universities and research organisations as to the negative effect that this bill would have. Its key amendment excludes fundamental research where the resulting information is ordinarily published and shared broadly in the scientific community. The remaining amendments to the bill are consequential.

We will not stop the progress of this bill. However, we will go through this poorly drafted legislation with a fine tooth comb in the consideration-of-detail phase—that is, clause by clause in order to achieve the best outcome for both the Australian defence and research sectors.