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Wednesday, 12 October 1983
Page: 1662

Mr SPENDER(5.02) —I wish to make a few brief comments on the statement which has been made by the Minister for Defence (Mr Scholes). I do not propose to cover the same ground that the right honourable member for New England (Mr Sinclair) has covered except insofar as is absolutely necessary. To start with, the Opposition certainly welcomes this decision because it is essential for this country to have a major warship building capacity. Unfortunately, the Minister's statement tells us almost nothing of what is proposed. We are told that a decision has been made, yet one sees that in fact it is not a decision-it is described as a decision in principle; perhaps more accurately it could be described as a decision to make a decision. We learn that before construction is authorised various arrangements which the Minister referred to in very general terms, will need to be put in place. When one sees the kind of arrangements that he was talking about it is immediately apparent that this House has not been told a great deal in this very short statement.

The Minister says that he will, at a later stage, inform us more of the arrangements being made for this project. The obvious question is: Why must that be done at a later stage? Why can it not be done now when this so-called decision in principle is being made? The Minister said in his statement that the arrangements which have to be entered into include joint management arrangements between the Department of Defence as the customer and the Department of Defence Support as the supplier. We need to know what these management arrangements are. One wonders why it is not possible at this stage to inform the House of these management arrangements. Surely they are known to the Minister. One would think that the Government could not have committed itself to a decision in principle without knowing what arrangements were to be entered into to give effect to that decision in principle. The fact that joint management arrangements have to be entered into by the Department of Defence Support and the Department of Defence illustrates the point which was touched on by the right honourable member for New England; that is, the prospects of the ships being completed in accordance with what is proposed. We are not dealing with a case involving a private builder to whom a government contract has been let; effectively we are dealing with positions as between Government departments. What will happen, for example, if the quality of the work is not adequate? We all know of the problems that have been experienced recently in that area. What will happen if delay occurs due to industrial unrest? What will happen to the costs in those circumstances? What will be the consequences for the projects that may be given to the shipyard in the future? The Minister said:

Decisions by government to allocate any further work to the dockyard will be contingent upon compliance with this formal agreement.

But that does not really tell us very much because we do not know what the formal agreement is and apparently we are not to be told for some time. We know that the total project cost is estimated to be $830m in December 1982 prices. We do not know whether that estimate includes any allowance for delays. We do not know what provisions will be made for delays and how the cost is to be borne, although it would appear that ultimately the cost of any delays will have to be borne by the Australian taxpayer. Nor do we know when the ships are to be delivered. If the Minister does not mind my saying so, it is rather extraordinary that he has informed this House about a very important capital commitment in respect of which this Government has made a decision in principle but he cannot tell up when the ships are to be delivered. We are told that they will be delivered in the early 1990s. Does that mean 1990, 1991, 1992, 1993 or 1994, or are we to wait until 1995? If there is no clear estimate of when the delivery will take place it is very hard to see how there could ever be an accurate assessment of the costs.

The Minister needs to tell us-I will be glad if he tells us today-when delivery of the ships is expected. Having entered in principle into an arrangement of the kind that he has outlined, he must have had the full material before him, including details of that very important matter; that is, when we can expect to see these ships coming off the shipyard. Presumably, they are to be delivered at staggered intervals and he will no doubt be able to tell us that one will come off in March 1991 perhaps, and the next in March 1992. If the Minister cannot tell us when the ships are to be delivered, he should not have informed the Parliament that the ships will be coming off the production line in the early 1990s. That is no basis on which to make any kind of a major capital defence commitment.

While the Minister is here, he might also say something about the opportunity to which he referred for the fulfilment of the expected efficiency and competitiveness at Williamstown. I would be very glad to know precisely what he expects and the reasons why he believes, as he obviously does, that there will be an opportunity for this efficiency and competitiveness at Williamstown to be fulfilled in practice. The Minister referred to the extent of the local involvement in defence projects presently being estimated at more than $2.5 billion.

The right honourable member for New England has touched upon some problems which have been experienced within the Government. These are problems of a most serious kind. It appears that the Minister for Defence Support (Mr Howe) has unilaterally put into the deep freeze two arrangements with the Philippines. On the basis of what one knows about those proposed arrangements, one would assume that there is no way that they are arrangements of a kind that should be put into a deep freeze. Apparently the Minister for Defence Support has acted without consulting the Minister for Defence or the Minister for Foreign Affairs (Mr Hayden). The Minister for Defence may be able to tell us something about that. Indeed, it is not only in relation to the Philippines but also from what I have read recently, in relation to Indonesia, that the Minister for Defence Support has advanced some unilateral views on what should or should not be done. The Minister for Defence might tell us precisely what arrangements this government has in mind for the future and the extent to which the Minister for Defence Support has exceeded any powers that he may have. He might also tell us what the guidelines for the Government are to be in relation to the placing of future defence contracts overseas or the entering into of arrangements to do work for countries in our region or, indeed, countries outside our region. If the Minister could tell us something of these matters I am sure this side of the House would be very glad to hear from him. However, to sum up, we are glad that the Williamstown dockyard is to get the conract subject to all the qualifications that appear in the Minister's statement. We hope that the contract can be completed on time-if the Minister can tell us what that time will be-and that the ships are delivered in accordance with the contract and with the minimum of management inefficiency or industrial unrest.