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Thursday, 9 February 2017
Page: 506

Mr MARLES (Corio) (12:34): I thank the Minister for Defence Industry for giving his ministerial statement. Labor's attitude, when it comes to national security and when it comes to defence, begins with a spirit of bipartisanship. Labor, like the coalition, passionately believes that the first priority of any government is to provide for our nation's security and to provide for our nation's defence. This is an area of public policy that should be above party politics.

There is much in what the minister has said which does indicate good news—for example, the minister spoke about opportunities that may come to the Australian defence industry through increased expenditure under the new American administration. I wholeheartedly agree that there are opportunities in relation to that and the Australian defence industryshould pursue them. We would work with the government in seeking to facilitate that. Indeed, what the minister has just reported in terms of his conversations with Secretary Mattis around American support for the future of the Joint Strike Fighter is good news, as is the specific news about Australia's defence industry role within the production of the Joint Strike Fighter.

Having said that, it does not mean by any means that Labor provides the government with a blank cheque when it comes to this area of policy, both in terms of strategy and in terms of defence industry. We do not stand in blind agreement with the coalition on all matters and we would not be expected to. We have an absolute obligation as an alternative government to hold the current government to account, to ask questions and to challenge, where appropriate, the decisions that government makes. Whilst there are obvious differences between Labor and the coalition in other areas of public policy about how Australia should be governed, national security is not one of them, but it is an area where, of course, detailed attention needs to be provided. A critical example of this is that Labor does support the government's target of increasing Defence spending to two per cent of GDP. That is an important commitment that has been made on a bipartisan basis.

The coalition at times likes to play politics with Labor's support for that target. They often talk about the spending of the Labor government in 2012-13, but what those comments always miss is that in 2002-03 under the Howard government, when Australia was actively engaged in military actions overseas, defence spending was just 0.02 per cent of GDP higher than the year they like to criticise. Furthermore, they often miss the fact that defence spending under Labor was at 1.93 per cent of GDP in 2009-10—higher than at any time during the Howard government and higher than it has been under the current government. In fact, the 2009-10 figure of 1.93 per cent was the highest spending level since 1994-95, when defence spending by the Keating Labor government was at 1.96 per cent of GDP.

I am sure that the minister has enjoyed taking us through his list of greatest hits over the last 15 minutes or so, and indeed there is obviously good news in much of what he said, but I would like to remind the House that the self-congratulatory trip down memory lane only tells us perhaps one side of the government's recent history in relation to defence industry. The truth is that the government has also overseen a litany of disasters when it comes to defence procurement. There was a failure, for example, to invest in Australian defence industry jobs, resulting in the loss of over 1,500 jobs at shipyards across Australia. Workers in South Australia and Victoria well understand that fact. A failure to provide Australian companies with the opportunity to compete for the contract to build the Navy supply ships by conducting a limited tender process with two overseas companies is an example of that. There is the failure to deliver the enterprise level naval shipbuilding plan that this government promised would be released with the defence white paper. We saw a former defence minister famously claim that he would not trust ASC to build a canoe, and in just over three years we have already seen in this area of public policy three defence ministers in the portfolio and indeed if you include those who have held the positions of assistant minister with responsibility for defence industry or defence personnel there has been a total of eight ministers in what should be a stable area of government but in fact has been a revolving door. Now we have a bizarre situation where we have two defence ministers at the same time. The government has not, or perhaps cannot, give us the policy reasons for the split in responsibilities—I think everyone understands the political reasons but we have never seen a proper policy articulation of why we now have two defence ministers.

As an aside, Labor's bipartisan approach to policy in respect of defence does go to the critical review that the government undertook, which was the First Principles Review by the first defence minister, Senator Johnston. It was a significant review and the outcomes of that have the potential to represent a sea change within the culture of Defence. The First Principles Review undertook a comprehensive assessment of the way in which the defence establishment operates and made a number of recommendations for significant organisational change. We fully support the work and outcomes of that review and commend the government for undertaking it. One of the key mantras of the review, though, was 'one defence', so it is ironic that with a mantra of one defence the Turnbull government in fact has two defence ministers seeking to ensure that culture of one defence. Labor has a very traditional view in respect of how this portfolio should be handled, and we will, if elected to government in the future, have one defence minister reflecting the key principle of one defence.

Finally, we saw this country's most significant and expensive procurement decision, in respect of future submarines, being tossed around the government party room in order to save the former Prime Minister's job. Specific to the Minister for Defence Industry's area of responsibility, the Integrated Investment Plan released by this government has less detail in it than the Defence Capability Plan released by the former Labor government, and it gives no indication of how the government seeks to change Australian industry involvement in defence procurement. Over the last three years Labor has been making a case about the strategic importance of having a strong domestic defence industry for Australian innovation, technology and jobs but meanwhile we have seen in the Turnbull government in large measure a government that has been running a policy of domestic neglect.

In large measure, the Turnbull government has spent the past three years focussing on the acquisition of off-the-shelf defence equipment and has shown little regard for Australia's local defence industry. Australia accounts for 10 per cent of US foreign military sales and is the seventh largest defence importer in the world. The Turnbull government has been happy to spend this investment overseas, instead of leveraging it to grow the Australian defence industry. It is ultimately an indictment of the Turnbull government's commitment to Australian defence industry that, at the same time as local shipyards are shedding jobs, the government has contracted Spanish shipyards to build the Navy's replenishment vessels. It is all very well for the minister to talk about the rhetoric of supporting local defence technology and jobs, but at the end of the day the government and the minister will be judged on what is actually delivered.

Labor has a strong history of developing Australia's defence industry and capacity. We have a strong contemporary history when it comes to submarines and the current existing class of submarines, the Collins class. It was the previous Labor government, addressing the concerns regarding the readiness of the Collins class submarines, that initiated the Coles review. The recommendations that came from that review are recommendations that we implemented. The implementation of these recommendations saw the former Labor government double the sustainment budget for the Collins class, which has led to four of those boats being in the water today and five crews being ready. It has led to Kim Beazley, a giant of Australian defence policy, saying last year:

The Collins class submarines are a great Australian engineering accomplishment and to go from no background in submarine production to building one of the best conventional submarines ever produced was a genuine national achievement.

Mr Beazley is absolutely right. It is worth remembering that all of that occurred against a backdrop of pretty serious criticism from the coalition of the time, but we do not hear that criticism from the coalition today in respect of the Collins class submarines.

Labor has always supported the Australian defence industry and recognises that sovereign capability is critical to our national interest and national security. Nowhere is this more apparent than when it comes to Australia's Future Submarine Program. The future submarine project is as defining a piece of materiel acquisition as we have ever had in terms of the future shape of the Australian Defence Force. As such, it is the biggest and the most important strategic challenge the Australian defence industry and the Australian defence establishment face today. There has been no bigger procurement in terms of both scale and cost, with 12 submarines budgeted at this point at more than $30 billion.

This will be the largest defence project in Australia's history and will procure a capability that will be critical to our future national security, yet it has been the subject of political meddling under the Abbott-Turnbull government. Expert after expert described the competitive evaluation process dreamt up by the former Prime Minister and former Minister Andrews as woefully inadequate and rushed. Warren King, the defence department's former head of procurement, is on the record as saying that another 12 months of analysis was needed for the government to have sufficient information to make the best possible decision. The Abbott-Turnbull government, in truth, has bungled this decision from day one. That this decision ended up being tossed around the government party room as I described earlier in the context of a leadership contest at the beginning of 2015 was ultimately a total disgrace. To see our nation's single biggest military defence procurement being tossed around in order to secure votes in respect of a single individual's career is breathtaking. It was ultimately an affront to the Australian public. It fundamentally disrespected the defence industry and our Defence personnel, but more importantly it undermined good public policy.

Let me be clear: Labor does unreservedly support the government's commitment to build all of these submarines in Australia. This decision is critically important for Australian industry. However, in the context of this commitment, there are number questions now about exactly how this will play out. Recently, for example, questions have been raised about the training capacity and the staffing capacity which exists in Australia to fulfil the Collins upgrade and sustainment program. These issues are intimately connected with the future submarines project, which will not be completed in terms of the building of the submarines until the middle of this century, and in terms of the life of the future submarines it will be well into the latter part of this century. This of course means that the Collins upgrade itself, and indeed the sustainment of those boats to keep them relevant, contemporary and safe, is a critically important issue. From the mid-2020s through until the 2040s, the maintenance of Collins is going to be an expensive undertaking, and we need to ensure there is absolutely no capability gap in the ultimate transition between Collins and the future submarines.

The truth is this: what is being planned now provides a capability which will not come into being until the early 2030s, a long time into the future, and which is a very expensive procurement. It is going to go over the course of a series of Australian governments. That is the reality. We absolutely support the procurement of these submarines, as I have said, but future Labor governments—indeed, future governments of all persuasions—will have an obligation to actively manage this project and the ongoing procurement of these submarines. I want to say now that we will do so on the basis of seriously going about these questions from the point of view of the best public policy for Australia, not just the best politics of the particular moment in time. We will bring to bear some very important principles. One is that it is critical that in the development of the future submarines project that there is no delay. It is already a very long procurement process. It is absolutely critical that there is at the heart of this procurement the development of Australian jobs, Australian industry and a sovereign capability to build submarines in this country.

In conclusion, I want to reiterate the support that Labor has for the growing of our defence budget to two per cent of GDP. I want to reiterate Labor's support for the acquisition of the capabilities that have been outlined by the minister and indeed in the government's defence white paper and the industry capability plan. I want to reiterate Labor's support for Australian jobs in the procurement of these capabilities and, in doing so, the building of a vibrant Australian defence industry which has the capacity in the future to do more export around the world. Also, importantly, I want to acknowledge that the defence industry is a high-tech industry and that it has a role in boosting technology throughout our country, and that we will seek to make sure that it plays that role as a future Labor government. We absolutely support the important place it has within our national economy.

Labor, in opposition, will continue to support the government in respect of the increase in our defence spending in the build-up of the Australian defence industry, but in the process we will hold the government to account at every step along the way to make sure that the acquisition of appropriate capability, the creation of jobs in this country and the development of a high-tech industry is ultimately achieved.