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Tuesday, 28 October 2014
Page: 12281

Ms GAMBARO (Brisbane) (16:22): On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the committee's report entitled Review of the Defence Annual Report 2012-13. I ask leave of the House to make a short statement in connection with the report.

Leave granted.

Ms GAMBARO: On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I have pleasure in presenting the committee's first report for the 44th Parliament, entitled Review of the Defence Annual Report 2012-13.

The review of the defence annual report is an important oversight activity. It provides an opportunity for the committee to inquire into a broad range of defence issues as part of the process of accountability of government agencies to parliament. The Defence Subcommittee considers this to be a key part of its role.

The subcommittee resolved to focus on five main areas for its review:

Asset management and capital investment programs;

Defence Cooperation Program;

Naval combat capabilities;

Air combat capability; and

Defence Materiel Organisation and Capability Development Group.

The subcommittee heard from Defence officials at the public hearing held on 6 June. It also received evidence from the Australian Strategic Policy Institute, and two small- to medium-sized enterprises, QinetiQ and Nova Systems.

As part of its review, the subcommittee considered Defence estate issues, including the cost pressures associated with the maintenance of heritage listed buildings. The committee recommends government should review the process by which Defence properties are placed on the Commonwealth Heritage List and how their maintenance is funded.

The subcommittee also considered the efficacy of Defence contracts to ensure that SMEs are paid in a timely manner by prime contractors. Based on evidence received, the committee recommends that the government should review its contract templates and procurement processes.

The subcommittee considered the scope of the Defence Cooperation Program and options for a whole-of-government approach to supporting regional partners. Noting the complexities of achieving a structured and coordinated regional security effect, the committee commends Defence on the development of a future framework in the Pacific. However, Australia needs to ensure that it is achieving value for money with the Defence Cooperation Program, and specifically the Pacific Patrol Boat Program.

During the course of the review it became apparent that, despite some positive developments, Defence's approach to capability management remains fragmented. There does not appear to be a single continuous system which Defence can use to conduct capability assurance from definition, through acquisition and service life, to disposal.

The committee believes that the introduction of such a system, managed by the Vice Chief of the Defence Force, would increase transparency and enhance oversight by the government and the parliament of capability management by Defence.

That being said, it was pleasing to see some positive outcomes arising from the SEA 1000 Industry Integrated Project Team—a working group made up of Defence and industry experts who are developing the design brief for the new submarines and examining potential industries able to execute such a project. The committee encourages the further development of this initiative along with transparent communication of the team's view to government.

The committee believes that expertise within the private sector could be leveraged for all stages of the capability development life cycle. Rather than contracting for specific packets of work, greater benefit could be gained by entering into teaming arrangements as part of a whole-of-life approach to identifying and managing risk.

The committee was also concerned by the lack of detail in the Defence annual report on the progress of implementation of all the Coles review recommendations relating to the Collins class submarines. This is something that needs to be expanded upon in future Defence annual reports.

Other recommendations made by the committee include the use of independent subject matter experts in a system of gate reviews as part of the seaworthiness system, and enhanced reporting on Defence's cybersecurity capability.

It is disappointing to note that the committee is still awaiting a response from Defence to the recommendations of its previous Defence annual report review, which was tabled in June last year. The committee hopes to receive a response to its previous review shortly.

I also would like to commend the chair of the Defence Subcommittee, Senator David Fawcett, and Deputy Chair, Deb O'Neill, and other members for their great diligence and great efforts in producing this report. My special thanks go to the committee secretariat. I would like to thank Jerome Brown and all of the work that the secretariat have done, and their professionalism.

The committee acknowledges the dedication and the commitment of the service men and women of the Australian Defence Force and commends them on the outstanding service that they have provided to the nation. The committee recognises that the members of the ADF are supported by an enduring network of families, friends and loved ones and to these people we owe our thanks.

Finally, the committee notes the loss of Lance Corporal Todd Chidgey during 2014. Our deepest condolences and our thoughts are extended to his family and friends.

I commend the report to the House.

Report made a parliamentary paper in accordance with standing order 39(e).