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Thursday, 28 June 2018
Page: 4351

Defence Procurement

Senator WHISH-WILSON (Tasmania) (14:35): My question is to the Minister for Defence, Minister Payne. This Tuesday, I asked you to clarify exactly what the costs of the Triton drones would be. A check of Hansard will show that you didn't answer the question of what the costs would be. However, on ABC Radio that afternoon you said that you'd told the Senate what the costs would be. Could you now take the opportunity to clarify what the $3 billion to $4 billion price tag in the white paper refers to and what part of acquisition systems infrastructure or sustainment is included in that figure?

Senator PAYNE (New South WalesMinister for Defence) (14:36): I can advise the Senate that the initial approved investment for the MQ-4C Triton, which was announced earlier this week, is $1.4 billion. The initial approved investment includes the first of the six Triton aircraft and associated systems, $364 million for new facilities and infrastructure and a $200 million cooperative development program with the United States Navy, which I also referred to in the Senate earlier this week, which will ensure that we are able to contribute directly to the development, production and sustainment of this aircraft. The total acquisition cost of the six aircraft and the associated systems is expected to be around $3 billion, which is indeed within the provision of the Integrated Investment Program. As was indicated in the white paper, that is a cost of around $3 billion to $4 billion.

This announcement is an important part of the government's long-term plan to provide Australia with one of the most advanced maritime patrol capabilities in the world that will assist us to support our borders and to support security in our region. It is a step change in capability for the Royal Australian Air Force. Our maritime area, as I've said here and elsewhere, covers approximately 10 per cent of the Earth's surface. What the Triton will be capable of, in addition to its work that it'll do with the P-8s, is supporting missions of over 24 hours duration, covering an area of over a million square nautical miles, which is actually larger than the full area of the state of Western Australia, in one exercise or one activity over 24 hours on station. It is a very significant capability and, together with the P-8A Poseidon, the Triton and Poseidon will work together as complementary systems, very much enhancing our antisubmarine warfare and our maritime strike capability as well as our ability to monitor and secure our important maritime— (Time expired)

The PRESIDENT: Senator Whish-Wilson, a supplementary question.

Senator WHISH-WILSON (Tasmania) (14:38): You may remember, Minister, that on Tuesday I asked you about the $7 billion figure that had been quoted in the media. You said to the ABC that afternoon that the $7 billion figure covered the whole-of-life cost of the drones. You said that it would be just shy of $7 billion. Can you now confirm to the Senate that the total cost of acquiring these drones is nearly double what was quoted in the white paper?

Senator PAYNE (New South WalesMinister for Defence) (14:39): No, that's not correct. As I indicated in my earlier comments and response to the Senate and to Senator Whish-Wilson's question, the total acquisition cost of the six aircraft, the associated systems, is estimated to be around $3 billion. Any reference to a figure of $6.9 billion includes the whole-of-life sustainment costs. The acquisition cost, which is recorded in the Integrated Investment Program, is most certainly the cost which is being adopted at this point.

The PRESIDENT: Senator Whish-Wilson, a final supplementary question.

Senator WHISH-WILSON (Tasmania) (14:39): On that point, Minister, your government has outlined $200 billion in procurement costs over the next decade. Does that include sustainment costs? How much is that $200 billion figure going to blow out once we look at the true costs of this defence expenditure? Can you tell us how these things are officially budgeted by the government?

Senator PAYNE (New South WalesMinister for Defence) (14:40): The Integrated Investment Program, which was released in February 2016 with the Defence white paper, set out a very comprehensive plan to ensure that the Australian Defence Force was provided with the best capability it needs to do the job that government expects of it to protect Australia and our interests. In the matter which we are discussing here today, the MQ-4C Triton, the acquisition costs of that are clearly laid out in the white paper, and similarly with other platforms which the government has proceeded with acquiring and making decisions in relation to the acquisition of in recent—

Senator Whish-Wilson: A point of order: given I've only got 24 seconds left to get an answer to this specific question. Given what we've discovered today about the total costs of the Triton aircraft, how does that relate to the $200 billion that you've outlined? Can we expect that to be $400 billion—

The PRESIDENT: Senator Whish-Wilson, a point of order is not an opportunity to ask a further supplementary question. That is not a point of order.

Senator PAYNE: Thank you very much, Mr President. In fact, what I was setting out for the senator—although he doesn't seem particularly interested in listening to it—is the way in which the Integrated Investment Program was determined, which was externally cost assured at the time. The acquisition program is a comprehensive one. It is going to ensure that the ADF is equipped in the way that it needs to be to protect Australia and our interests. That's the government's job.