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Tuesday, 14 June 2011
Page: 5964

Mr CLARE (BlaxlandMinister for Defence Materiel) (16:49): I thank the member for Fadden for his question. He is very experienced in this area and so would know that defence acquisition is a cyclical or a chunky business. You have a lot of projects sometimes go to second pass, which can lead to a big ramp-up for industry, and then there is a gap and then there is another big increase in second pass projects. If you look at a number of projects approved by the Howard government in 2007, that is a good example of that. It is a challenge for industry worldwide. I know that the member for Fadden, like myself, is concerned about Australian industry. What is important to point out is that, unlike acquisition, which can be a chunky business, the sustainment of defence equipment is not as cyclical and is a lot smoother. As I said in my introductory comments, most of the Australian defence industry works in the area of sustainment. About 70 to 75 per cent of sustainment is done by the defence industry and about 75 per cent of Australian industry's work is in sustainment. That has continued to grow over the course of the forward estimates. From $5.3 billion this financial year it will grow to $5.6 billion in 2011-12. In the year 2014-15 that will grow again to $6.1 billion, which is a significant increase over time and will be of enormous assistance to the defence industry.