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Tuesday, 30 October 2012
Page: 12596

Mr STEPHEN SMITH (PerthMinister for Defence and Deputy Leader of the House) (17:47): I move

That Senate amendment (9) be disagreed to.

Mr STEPHEN SMITH: Last night the Senate passed a number of amendments to the Defence Trade Controls Bill 2011 which the Senate has passed back to the House for concurrence via this message. As we have seen, there are 27 amendments to the bill. Of these, 24 are government amendments, two were moved by the Australian Greens and passed with government support, and one was moved by the opposition.

The government supports the 26 amendments which it supported in the Senate and opposes amendment (9) for reasons which I will outline subsequently. The bill was debated and passed, together with the Customs Amendment (Military End-Use) Bill 2011, which has also been amended by the Senate. The government also supports this amendment and will deal with that bill subsequently.

The Australia-US Defence Trade Cooperation Treaty was signed in September 2007. The treaty will improve two-way trade between Australia and the US in Defence goods, services and technology by eliminating the need for export licences for members of an approved community. The bill also introduces strengthened export control measures by introducing protections on the intangible transfer overseas of sensitive technology on the Defence and Strategic Goods List, the DSGL, such as supply by electronic means as well as controls on brokering the supply of listed sensitive Defence goods and technology. This will eliminate identified gaps in Australia's export controls system, align Australia with accepted international best practice and support international efforts to prevent proliferation of sensitive technology.

In September 2008, the Joint Standing Committee on Treaties recommended that binding treaty action be taken. In September 2010, the US Senate recommended that the treaty be ratified. Defence commenced consultations on the proposed legislation with public information events at major cities around Australia in late 2010. Defence consulted with stakeholders, including the university sector, as early as May 2011 before a draft bill was released for public consultation in July 2011. Industry provided detailed comments, including through the Defence industry advisory panel, chaired by Mr Ken Peacock.

The Defence Trade Controls Bill was passed by the House in November last year. On 10 November last year the bill was referred to the Senate Scrutiny of Bills Committee and the Senate Standing Committee on Foreign Affairs, Defence and Trade for further consideration. The preliminary report of the Senate Standing Committee on Foreign Affairs, Defence and Trade, tabled in the Senate on 15 August this year, recognised the importance of the legislation and generally supported the intention of the bill. The committee recommended Defence conduct further consultations with the university and research sectors on the impact of controls on intangible transfers.

At the time, I thanked the committee for identifying areas where the bill could be improved by further consultation. Further consultations were necessary to ensure the bill did not include any unintended consequences that might impact adversely on the university and research sectors. I asked Mr Peacock and the Chief Defence Scientist, Dr Alex Zelinsky, to conduct those further consultations.

In mid-September I wrote to the committee outlining the proposals put forward by Mr Peacock and Dr Zelinsky and indicated in-principle support by the government. The government also supported the round table process chaired by the Chief Scientist, Professor Ian Chubb, the former Vice-Chancellor of the Australian National University.

The proposals put forward by Mr Peacock and Dr Zelinsky were considered by the Chief Scientist's round table process and, as agreed by participants in the round table process, have been into the bill as government amendments. The Chief Scientist made an important contribution, as did representatives of the university and research sectors who worked very constructively with him. While some individual participants maintained specific concerns, the round table process concluded on 21 September this year with an agreed way forward on a range of amendments to the bill. The committee—Mr Peacock, the Chief Defence Scientist, the Chief Scientist and the university and research sector—made significant recommendations which ensured an outcome that will protect our national security interest while responding to university and research sector concerns.

On 10 October, the government circulated proposed amendments to the legislation which reflected the agreed outcomes of the Chief Scientist's round table. The Senate last night voted in support of all these amendments as well as additional amendments put forward by the other parties in the Senate, as I have described. The government has taken up all of the recommendations put forward by Mr Peacock and by the Chief Scientist. The government also supported additional amendments put forward by other parties in the Senate. These amendments set a minimum time frame of two years for the steering group, put the terms of reference for the steering group into the legislation, name the Chief Scientist as the chair of the steering group and task the steering group to advise ministers on whether Australia's export control arrangements are not more restrictive than US regulations on university activities. (Extension of time granted)

The government is not able to support one amendment passed by the Senate last night which, in the government's view, undermines the intent of the legislation and would significantly weaken efforts to strengthen Australia's export controls. Amendment (9) relates to a proposed exemption for the outcomes of fundamental research. This does not reflect the agreed way forward of the Chief Scientist's round table. The amendment would effectively exempt from the bill anyone who claims to be conducting fundamental research. This would mean a far broader effect than that caused by the US exception for fundamental research, which only applies to research outputs. Research inputs are subject to US export controls; there is no US exception that allows controlled technology to be exported from the US for fundamental research without US government authorisation.

For these reasons the government opposes amendment (9) and seeks the support of the House to disagree to amendment (9).