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Tuesday, 5 June 2001
Page: 27269


Dr MARTIN (4:34 PM) — The appropriation bills are the bills that flow from the recently announced budget, the sixth of the Howard government, and they purport to provide funding for the year 2001-02. I will take the opportunity this afternoon to talk about the impact of the appropriation bills and the budget context in the Defence portfolio and, hopefully, clear up what continue to be some misunderstandings—and I am being kind to the minister on this occasion—as to what Labor's intentions would be with the success of a Beazley government at the next election. No, I will rephrase that: what I will do in my contribution this afternoon is set the record straight and actually put down the nonsense, the misinformation, the deliberate attempts to distort Labor's policy by Peter Reith, the Minister for Defence.

Quite frankly, we on this side are sick to death of the minister coming in here at every opportunity and seeking to politicise the debate on the defence of this nation. Since I have had the honour to be the Labor Party spokesman for defence in the past 2½ years, I have enjoyed a pretty reasonable relationship with the ministers on the other side. Well, at least I did with John Moore. But I have to say that, since Minister Reith has come along, with his attempts to politicise the debate on defence issues, the bounds of the ability of both sides of politics to work together have been stretched—and yet this is in a fundamental area of national security, where politics should not be played. Yes, perhaps around the edges you can point to some problems—and I intend to do that during my contribution today. There has been blatant misrepresentation of the opposition's views of the white paper brought down last year and of what we would do with the present budget as it stands at the moment, and a number of comments have been made about pieces of equipment that the Labor Party would or would not buy and what cuts we might make to the budget for the defence department should we be elected into government at the next election. All of these are just blatant attempts by the minister to steer the debate away from some of the shortcomings that have existed because of the role that he is now playing as a minister and from some of the decisions that, regrettably, are not forthcoming from the government—which clearly need to be made for the benefit of people in the defence industry, the people in the defence forces themselves, and for Australians who understand the importance of defence to this nation.

What we have seen is a minister who has been focused on creating differences between Labor and the coalition on defence policy—when in fact there are not any—at a time when the government should be concentrating on the pressing issues that face the defence organisation. There are a number of these, and the first that I want to turn to is the issue of capital programs and delays in announcements by this government. This is a government that likes to wrap itself in the flag. Both the Prime Minister and Minister for Defence—whether it is the present one or John Moore, his predecessor—go out and say to the people of Australia, `Only the Liberal Party can be good for the defence of this nation. We have these great ideas for all these programs that we want to see come on line. We are great economic managers. We are going to acquire some new equipment, whether it is for the Air Force, the Navy or the Army. We will manage projects reasonably, on time and under budget, so the benefits will flow to the Australian Defence Force and the Australian people.'

What an absolute load of nonsense! Let me illustrate why. Some time ago a decision was taken that we needed to replace the Fremantle patrol boats. These operate in Northern Australia. They have come to the end of their economic life. They are just about clapped-out. They have done a great job, but they need replacing. Where is the decision about who is going to be the successful tenderer for the patrol boats? Silence, because the government will not make a decision. We have had defence industry contractors—Australian and foreign—all bidding to try to be the appropriate defence industry that is going to construct these, but no decision has been taken.

Then we have a major logistics contract worth about $3 billion that the government went to tender for some time ago. A whole range of Australian companies tendered for this contract. The government had a pantechnicon truck full of tender documents that were given to tenderers to fill in. They spent many millions of dollars doing that. Three pantechnicon truck loads of answers were sent back to the Department of Defence to look at. I understand that the report and the selection of a preferred tenderer has been with the government since at least September last year—and what has happened? Nothing. Why is that so?

What is DIDS to start with? It is the logistics operation for the entire Defence Force. It will take away from Defence personnel the responsibility for distributing to the Defence Force around Australia everything from toilet paper to bullets and give it to private contractors. Why then isn't the government, which is hell-bent on outsourcing, whether it be in Defence or anywhere else, moving on this? Could it be because of the Prime Minister's Nyngan declaration of some time ago? At Nyngan he said, `If there is any decision taken by one of my ministers, a red light is going to flash in my office and I will have to be told about any regional employment implications.' I wonder if that red light has been flashing for some months in the Prime Minister's office. I think it has. I think that is the reason why we have not seen an announcement made on the DIDS program: because it is going to mean job losses in regional Australia.

I have been to Puckapunyal twice now. I was there last year when the serving men and women of the Australian Defence Force at Puckapunyal had been told that Minister John Moore was going to make an announcement in the next couple of days about DIDS. They were panicked about whether they would have jobs into the future. What happened? No announcement. When I went back again they were still saying to me, `Do you know what this government is going to do about DIDS? We cannot get an answer from it'. Can people in the defence industry that have tendered for this and have spent millions of dollars on this get a decision out of the government? The answer: no, they cannot. What are their options?

People are now saying that the government is going to walk away from the DIDS program because it does mean losses of jobs in regional Australia and the government is not prepared to do anything about it before the next election. I have heard also that the DIDS program has been cancelled altogether. If that is the case, I suspect that the Australian government could face compensation cases from the tenderers, who have been told not to resubmit tenders at this stage. The question has to be asked about these great economic managers on the other side, this government that believes it knows what it is doing: how can a decision like this be taken and why won't it be taken?

The next issue I want to talk about was something that the Treasurer referred to on budget night in his budget speech. He talked about the airborne early warning and control aircraft that Australia was going to acquire and `wasn't it wonderful that, through the white paper process and the budget process, money was going to be made available for this much-needed aircraft'. Let me tell you something about the history of the airborne early warning and control aircraft. This is about providing us with airborne intelligence. Boeing aircraft will be used and Northrop Grumman radar equipment is going to be associated with it. It will give us terrific coverage in the northern reaches of Australia. It will give us a collection of data for intelligence, and it will provide a terrific adjunct to the information that we receive from other sources.

The decision on the successful tenderer for that was made before September 1999. How do I know that? Because I went to Washington at the time and spoke to the people from Boeing and Northrop Grumman who said, `We have won the tender. What is holding up the signing off on it?' What was holding up the signing off on it was that the United States got a bit toey because this was new equipment that no-one else was getting, not even the United States Air Force. They were a bit uncertain, even though we are one of their closest allies, as to whether they should sign off on it straightaway. After considerable pressure that came from the Australian Ambassador to the United States, Andrew Peacock, from the US Ambassador to Australia, from the State Department and from the Deputy Secretary for Defense of the United States, finally it was ticked off and export licences were guaranteed.

What did the government do then? They said, `We are not going to sign any contracts for these aircraft now. We are going to wait until after the white paper comes out to see if we still need them.' Of course we still need them. People have been talking for 20 years about the need to acquire something like these. The decision had been taken, supported by the opposition, that these aircraft should be acquired. But the government said, `No. We will wait until after the white paper.' Some might say, `Not a bad strategy. The white paper is going to look at the security issues of our immediate environment. It is going to look at the new kit that we would have to acquire to replace FA18s, F111s, destroyers and patrol boats—all the kit that is running out of steam at the present minute.' However, these great economic geniuses ended up getting four of these aircraft for the price of six!

You tell me how good that is in an economic sense: delaying the decision has meant that we are going to get four airborne early warning and control aircraft for the price of six. Not only that; not one of them is going to be manufactured in Australia and not one of them is going to be assembled in Australia. Previously, under the deal that was on offer, we were going to get seven and at least five of those were going to be assembled in Australia, providing jobs in this country. But, because of the slackness of this government in managing the defence budget and taking decisions that were necessary, we have seen that all slip through. The fact is that, when it comes to economic credentials in the defence area, the government has absolutely no credibility whatsoever.

We will go on to talk about one of the more important issues for the Australian Defence Force. I know the Minister for Aged Care, who is at the table, has a genuine interest in this because she was the Minister for Defence Science and Personnel and I have spoken to her about issues associated with both the defence industry and personnel. I know that she has a continuing and abiding interest in this. I will come to both of those issues. Let me go to the personnel one first. It must break her heart, as I am sure it breaks the heart of anyone who has an interest in these issues, to know that this government had decided to run down the personnel number of full-time serving men and women in the ADF to below 50,000.

In fact, when this government came into office, they inherited a full-time ADF—uniformed personnel—of 58,000 people. The government took a decision, under the defence reform program, to run that down to 42,500. The services chiefs went on bended knee to the then minister, Ian McLachlan, and said, `Please, let's not do this. We need at least 50,000.' Ian McLachlan said, `All right—50,000 personnel.' Then along came East Timor and suddenly we realised we needed more, so the government signed off on 55,000 full-time personnel. One would have thought—the government having then got the agreement of the defence chiefs, for very strong strategic reasons because of East Timor, and having certainly got the support of the opposition—that 55,000 as an achievable target should have been what the government aimed at. But have they got anywhere near it? The answer is no. I am not saying this; this is in this damning report from the Australian National Audit Office, which came down last week and is dated 29 May 2001, on Causes and consequences of personnel postings in the Australian Defence Force—Department of Defence. Let me give you a flavour of what this report says. At page 12 in the conclusion—listen to this, Mr Deputy Speaker—it says:

The ADF is finding it increasingly difficult to recruit sufficient personnel to meet recruitment targets and to retain existing members. During 1999-2000, the ADF recruited 4043 members but, in the same year, 6467 members left. If the gap between separations and recruitment continues to increase, the Services will be less able to control postings and, more importantly, ADF personnel numbers will remain below desired levels.

That is code for the capability that we need to have because of some of the deteriorating circumstances of our regional area. It means we do not have the capability to conduct operations that we might be called on to do. But it does not stop there: on page 37 that same report says:

The current separation rates across all three Services are higher than both the five and 10 year average separation rates.

At page 38 it says:

Responses to the 1999 ADF Attitude Survey indicated that almost a third of respondents had formed the intention to leave their respective Service. This represents about 17 200 personnel (in a force of 51 500) looking for other employment.

That is an absolute disgrace. What do we have? We have the Minister for Defence, in question time today, and we have the Parliamentary Secretary to the Minister for Defence running around, putting smokescreens up about recruitment into the cadets in Australia when we have this parlous set of figures and this dreadful circumstance with full-time ADF numbers. We cannot recruit them and we cannot retain them; there are all sorts of reasons given in this report as to why that is the case. It all comes down to this minister's watch and yet they are out there saying, `Look, we're going to have cadets. We are going to have 15-year-old kids running around in schools, in cadet units and so on—that will solve the problem.' It will not. Labor supports the cadets absolutely—we have said that. But that is not going to solve this problem of full-time and reservist personnel in Australia taking up the needs of the Australian Defence Force. There is a loss of corporate knowledge in this mass exodus from the defence ranks and it is causing enormous problems.

Some of the reasons that have been put out as to why this personnel crisis exists go to things like the government being a little bit mean and tricky when it comes to things like allowances and other conditions of service. Take the FBT and take the remote locality leave travel allowance. After a concerted effort by the opposition, the government finally backed down on some of the FBT issues, but they have not gone all the way, and on the remote leave locality allowance they are simply being mean. Most Australian personnel in the ADF have to go to northern Australia sometime—it is logical; that is where our bases are—yet, to get leave allowances to be able to travel home, the government have simply put in a new formula. They do not recognise that ADF personnel are separate from the rest of the work force. They do not recognise that they do not work under awards, that they do not have holidays, that they do not have a union and that they do not get paid for overtime. Yet this government are out there saying, `No, it is only the Liberal Party that can look after the Defence Force.'

I also mention that the minister at the table and I also shared an interest in defence industry policy. When she was the minister, she oversaw the publication of a report on the defence industry which is still seen as being the hallmark of where we should be going. Is it being implemented? Regrettably, Minister, you and I both know it is not, and I get a stream of people from defence industry coming through my door saying that this government will not make the decisions on defence industry that are needed. We know, for example, that there is a secret report on the shipbuilding industry in this country that is sitting in the minister's office. We know that report is there because, in terms of military equipment that is going to be required under the white paper and through the budget processes of the coming years, we know there is going to be a need to replace the patrol boats and we know there is a need to replace our destroyers. We know we need to acquire an air warfare capability. We know that that is the case.

But what are we seeing in terms of Australian involvement? What are we seeing in government policy from the present government that assists that? Nothing. And yet when Minister Bishop, who is at the table, was the Minister for Defence Industry, Science and Personnel she brought down a report that pointed the way. I think the current situation is scandalous, and so do people in the industry. On the shipping issue, in the future some hard decisions are going to be taken about the future of the Australian shipbuilding industry. We have so many shipyards around Australia, but we have only a limited number of opportunities that are going to come along. We still have questions about the Australian Submarine Corporation. What is its future? It has been nationalised by the government; they intend to sell it sometime, but to whom? What involvement is there going to be for the Americans? What about Australian industry involvement? I say again—and I put it on the public record— that the Labor Party and I are unashamedly and unabashedly nationalist when it comes to Australian industry involvement in defence, and our policy will reflect that.

There were a couple of very tricky issues in the budget which I thought were worth commenting on. One was how they are going to pay for some of the initiatives that have been announced—that goes, of course, to the huge fire sale of Defence property. I know that one of the members sitting in this place is a bit concerned about the Defence base down in her electorate, should somebody come along and say at some stage, `We don't need Wagga; perhaps it should be sold off.' The government have identified $1 billion worth of assets that the defence department owns which are supposed to be sold in the year 2001-02—$1 billion worth. It is going to be some real estate agent that goes out and does that for the Department of Defence, I can tell you. So they have been a little bit tricky saying, `We're going to have all this money going to the defence budget,' and so on, but when you look at it a lot of it is also going into consolidated revenue; it is not all going to stay in the defence budget, and that is going to be a bit of a concern. The other thing—which I have remarked upon previously, of course—is that, once again, we see in this budget a decrease of $130 million in the money being spent on capital equipment. That follows what happened last year: another cut, of $380 million.

Let me point out in conclusion that Labor supports the white paper and Labor supports the budget initiatives—they are about right, and I have said that. Labor wants to again embrace this and give bipartisan support to defence policy, as we should. This Minister for Defence, however, needs to go back and start to read and learn about defence issues, to make some hard decisions, to look after the personnel that he has responsibility for, to look after the Defence bases around this nation and to make some decisions in industry policy. Let us see this thing tick over properly. (Time expired)