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Wednesday, 14 September 1983
Page: 753

Mr MOUNTFORD —My question, which is directed to the Minister for Finance, concerns criticisms by the Auditor-General of the escalation in the cost of construction of HMAS Success. Can the Minister confirm the increase in the cost of HMAS Success? Can he say how this cost overrun has occurred? Can he indicate what steps the Government intends to take to ensure that such an overrun does not occur again?

Mr DAWKINS —It is true that the Auditor-General commented unfavourably on the HMAS Success project which, I might say, is a ship with a rather inappropriate name considering its appalling record. One paragraph within the Auditor-General' s report says:

Latest estimates indicate the ship will be completed approximately three years later than previously provided for in the 1979 ship construction contract. In six years, the approved project costs have increased by $114.1m to $187.3m. Audit is unable to state with certainty the extent of the real cost increases.

Obviously the project tender price was $88m. It has increased, as the Auditor- General reports, by over $100m, a very substantial part of which is a real cost overrun. The Auditor-General was very critical of a number of aspects of this project, but it is worth pointing out that almost all the criticisms which the Auditor-General made were predictable and in fact predicted by Defence and Navy at the time this contract was considered. The real problem is that this Government inherited from its predecessors a contract the cost overrun and management of which were entirely out of control. I think the point has to be made that the real criticism for this position and the way in which this was handled should be sheeted home to the people who preceded us, particularly the former Prime Minister and his former Defence Ministers-the former member for Moreton and the current Deputy Leader of the National Party. I suppose that, given the latter's record, it is not surprising that he was less than scrupulous in the handling of other people's money. It is an appalling example of the way in which the former Government ignored the very sensible advice which it received at the time this project was considered.

Mr Howard —Mr Speaker, I take a point of order. The remark made by the Minister for Finance is not only dishonest but also unparliamentary. I ask that the imputation against my colleague the Deputy Leader of the National Party be withdrawn.

Mr SPEAKER —The point having been taken, I ask the Minister to withdraw.

Mr DAWKINS —Well, I withdraw. I will leave the House and the nation to make their own judgments.

Mr Shipton —Withdraw.

Mr DAWKINS —I have. The point is that this is an appalling example of the way in which these kinds of projects can get out of hand when decisions are made by governments for purely political reasons, either to advantage their own friends or for other political purposes. In taking decisions about these kinds of matters, given that these construction projects involving particularly military equipment and ships are extraordinarily complex, governments have to take into account the consequences of the decisions they take. I can assure the House that this Government is trying to ensure that from now on the cost in relation to this project is kept at the lowest possible level, although one cannot be sure that the overrun will not continue, given the circumstances we inherited. We will certainly keep in mind this experience when dealing with similar contracts in the future.

Mr Sinclair —Mr Speaker, I ask the honourable gentleman to table the paper from which he has been reading.

Mr SPEAKER —Was the honourable gentleman reading from a document on public affairs?

Mr Dawkins —It is the Auditor-General's report. You are welcome to it.

Mr SPEAKER —The Auditor-General's report is tabled.

Mr Sinclair —And the paper from which he was reading.

Mr SPEAKER —The Deputy Leader of the National Party asks whether the paper with the report was a document on public affairs.

Mr Dawkins —I was not quoting from anything other than--

Mr Sinclair —Just reading from it.

Mr Dawkins —I was not even reading from it.