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Thursday, 16 February 2017
Page: 1185

Defence Procurement

Senator XENOPHON (South Australia) (14:33): My question is to the Attorney-General, Minister representing the Minister for Defence. It is axiomatic that, if Defence wastage is eliminated or significantly reduced, the same defence capability outcomes can be achieved for less money whilst maintaining strong local content and jobs. With that in mind, can the minister advise how much public money has been spent on defence projects in the last decade where a capability never made it into service, including but not limited to the Navy Seasprite helicopter, which in effect never flew; and, more recently, the Army's LCM2000 landing watercraft, which were too big to fit in the amphibious landing ship it was intended they be deployed on?

Senator BRANDIS (QueenslandAttorney-General, Vice-President of the Executive Council and Leader of the Government in the Senate) (14:34): Thank you very much indeed, Senator Xenophon, and thank you for your courtesy in giving me advance notice of this question. I do have some information for you that has been supplied by the Department of Defence.

The Turnbull government's 2016 Defence white paper is the most comprehensive plan for the safety and security of our nation ever. It provides the funding needed to ensure that the Australian Defence Force can keep us and our borders safe both now and well into the future. Over the next decade, the government will invest $195 billion in defence capability. Any cuts to defence funding, such as those, Senator Xenophon, which you have proposed, put at risk our plan to build the defence capability—

The PRESIDENT: A point of order, Senator Xenophon?

Senator Xenophon: Firstly, I am being egregiously misrepresented and, secondly, the question is about waste—about wastage in Defence—and I gave two specific examples where there is no doubt that these were projects that went off the rails that cost taxpayers a lot of money.

The PRESIDENT: Senator Xenophon, in relation to the matter about you being misrepresented, there are other avenues for you to do that, if that is the case. In relation to your point of order, I advise the minister that he has one minute and 13 seconds in which to answer the question.

Senator BRANDIS: Senator Xenophon, in relation to the projects that have not been successful in the past, one of our 2013 election commitments was to conduct the first principles defence review to ensure that Defence is appropriately structured and organised and has the right business practices in place to support the Australian Defence Force in the 21st century; and, as I understand the position, Senator Xenophon, the instances you have given predate the first principles defence review. The review set out a comprehensive plan for transformational change throughout the defence organisation to ensure we can deliver on the record investment set out in the defence white paper and to reassure you, Senator, and to reassure all Australians that every dollar will be spent efficiently.

The PRESIDENT: Senator Xenophon, a supplementary question.

Senator XENOPHON (South Australia) (14:36): Since the Department of Defence's projects of concern list was established in 2008, 16 projects have been put on the list and subsequently remediated. In relation to those 16 remediated projects, how much public money was spent above and beyond the projects' original allocated budgets?

Senator BRANDIS (QueenslandAttorney-General, Vice-President of the Executive Council and Leader of the Government in the Senate) (14:37): Senator Xenophon, I am advised that the projects-of-concern process, with its early intervention, aims to combat any major concerns through project remediation, as you acknowledged in your question. The process allows all parties to form a common plan of action and to avoid a blame culture. This is a successful process and one that the government continues to support. What the Senate should actually be concerned about is your proposed $5.8 billion cut to the defence budget.

The PRESIDENT: Senator Xenophon, on a point of order.

Senator Xenophon: Mr President, that is an outrageous misrepresentation. I ask him to withdraw that. I have never said that. That is simply outrageous.

The PRESIDENT: That is a debating point, Senator Xenophon, and there are other junctures in the Senate program—

Senator Xenophon: I ask him to withdraw it.

The PRESIDENT: I am not going to direct the minister to withdraw. There is nothing for him to withdraw. Minister, you have the call.

Senator Wong interjecting

The PRESIDENT: I am not directing the Attorney-General to withdraw. Point of order, Senator Wong, on the same point of order.

Senator Wong: Mr President, just to clarify, I understand you are refusing to direct him or ask him to withdraw, but the minister can make a decision as to whether he takes on board the request.

The PRESIDENT: Of course the minister can, but I have ruled there is no point of order. If senators think they have been misrepresented, there are other avenues for that to be sorted out. Attorney-General, you have the call.

Senator BRANDIS: Senator Xenophon, since you were good enough to provide me with advanced notice of the question I actually took the trouble of obtaining a brief from the Department of Defence and the information I have given to you is information provided to me by the Department of Defence. (Time expired)

The PRESIDENT: Senator Xenophon, final supplementary question.

Senator XENOPHON (South Australia) (14:39): Noting the significant increase in blowouts in the US F-35 fighter program, significant concerns about the aircraft raised by the US Director of Operational Test and Evaluation, Dr Michael Gilmore, and the review of the Joint Strike Fighter project initiated by US President Trump, will the government urgently review its current plan in respect of the aircraft since it has a budget of more than $16 billion and President Trump is essentially saying the price is a rip-off?

Senator BRANDIS (QueenslandAttorney-General, Vice-President of the Executive Council and Leader of the Government in the Senate) (14:39): Senator Xenophon, the F-35A is the most capable and affordable aircraft to meet Australia's needs well into the future, and that view has recently been confirmed on a bipartisan basis, I might say, by the Joint Standing Committee on Foreign Affairs, Defence and Trade. In his Senate confirmation hearing in the United States the now Secretary of Defense, General Mattis, said: 'The President has talked about the cost of the Joint Strike Fighter, but has in no way shown a lack of support for the program. He just wants to get the best bang for the buck.'

This approach is already reaping benefits. In early February the price for the next lot of Joint Strike Fighters for the first time was set below US$100 million. It is expected that these prices will continue to come down as production increases and further productivity gains are realised.