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Thursday, 25 June 2009
Page: 7260

Mr BALDWIN (4:50 PM) —I rise today as I have a very real concern with regard to the current state and future direction of Australia’s defence policy. I am particularly troubled by the deliberate obfuscation of defence budget and procurement details by the Rudd Labor government. Never has so much been promised by so few to so many—and never has so little been achieved, despite the rhetoric. The government has unfortunately succeeded in politicising the entire defence portfolio. In fact, in a presentation to the National Press Club yesterday, Professor Paul Dibb said that he had counted no fewer than 85 press releases and 670 pages of spin. He said:

The white paper was propped up by the unprecedented media spin from the government …

Today I call on the Minister for Defence Science and Personnel and Minister assisting the Minister for Climate Change and Water, Greg Combet, to immediately reverse the Rudd Labor government’s politicisation of the Defence portfolio and to come clean on the details of troubled projects overseen by the DMO. I call on Minister Combet to set the record straight and, as Professor Dibb stated yesterday, ‘correct this glaring deficiency, and soon.’ The government must return to a position that values Defence Force personnel above the selfish interests of political chest beating. With that in mind I would now like to raise some specific concerns, and I urge Minister Combet to pay particular attention to these. These concerns are not just mine but are widely held by Australia’s defence industry. As John Kerin noted in the Australian Financial Review on 19 June, industry are:

… steeling themselves for the [DCP] to be cut from 10 years to 5 years in scope and contain less pricing information leading to more red tape and blow-outs in tendering costs.

First and foremost is the rapidly deteriorating situation with regard to the Air Warfare Destroyer project. This project has already slipped by three months due to delay by the DMO in determining the preferred tenderers for block construction. What is more worrying, according to media reports, is that NQEA, the company selected to deliver the first tranche of hull blocks, has not been able to secure the $20 million worth of underwriting funds that it requires to commence the work. So I ask the Minister for Defence Personnel, Material and Science, Mr Combet, whether Defence will still enter into a contract with NQEA, given its inability to secure the necessary financial underwriting. When will the modules actually start being delivered, given that the contracts have not yet been signed and the project is already three months behind? How does Minister Combet plan on addressing the downstream effect of these delays? Will Defence now give the NQEA block work to FORGACS or will they be forced to renegotiate with BAE for block construction at a much greater cost to the Australian taxpayer?

I would also like Minister Combet to indicate how he intends to fix the complexity of the DMO tendering process, a process that is tantamount to bureaucratic gridlock. Only yesterday it was revealed that German firm Krauss-Maffei Wegmann, working with BAE Systems Australia, had decided to pull out of the tender process for the Land 17-Artillery Replacement Project due to the complexity of the DMO’s tendering process. As a result, this vital acquisition has now been put on the backburner. Again, I ask Minister Combet how he intends to lead reform in the DMO, given that he has shown little or no interest in the organisation since being awarded the portfolio and in light of his continual preoccupation with managing the climate change portfolio.

Finally, I would like to cover an issue that I have been following closely for some time—that is, the development of Australia’s next generation Joint Light Tactical Vehicle. The Australian defence industry has a strong track record of developing and delivering light-armoured vehicles. The success of the Thales Bushmaster project in Bendigo is evidence of this. Thales will deliver a total of 737 Bushmasters to the ADF and export 72 Bushmaster vehicles to the Netherlands. For that reason, it came as a rude shock that the Rudd Labor government decided to award $40 million to American companies to develop nine prototype Joint Light Tactical Vehicles without providing similar funding to Australian industry. For all of the government’s rhetoric about supporting local jobs and industry, it has blindly ignored this proven Australian capability. This is tantamount to committing industrial treason.

It is clear that the DMO would benefit from an increased level of ministerial oversight. What is not clear is whether or not that oversight will be forthcoming from an often distracted minister. Minister Combet must move to reassure the defence industry that they are not a second-order issue. For Australia’s sake, he must deliver a defence capability plan that supports Australian industry and details future acquisitions and costs. I call on the minister to do so without delay.