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Tuesday, 23 February 2021
Page: 29

Senator REYNOLDS (Western AustraliaMinister for Defence) (15:03): I thank Senator Patrick for raising this issue with me earlier. In relation to this, I can confirm that we have complied with that order. However, I did receive further correspondence from Senator Gallacher in response to my letter, in relation to access to these documents. I received that correspondence on 19 February, and I am in the process of responding to that.

Senator PATRICK: I move:

That the Senate take note of the explanation.

Just so the chamber is very clear, the chamber has asked for documents to be returned to the Senate economics committee. That's very important, because rather than asking for them to come to the Senate table, where they are public, responsibly the committee has asked for these documents to be sent to the committee itself; thereby, they can be managed in terms of their confidentiality. Unfortunately, all that has been provided to the committee is a series of redacted documents that do not let the committee go to the fundamental task required of it by the Senate, to examine Australia's sovereign naval shipbuilding capability. So we end up with a problem.

I'll just lay out what the problem is. This is a really important issue, not just for the inquiry into naval shipbuilding but for the Senate more generally. The proposition that has been put forward by Defence in advancing a case for public interest immunity is that they have signed a contract with Naval Group and other providers—BAE, Luerssen and so forth—and that those contracts have confidentiality conditions. Because we have confidentiality conditions in these contracts, they are of the view that they cannot provide them to the Senate, on the basis that, if they do so, it may undermine the future provision of information.

Unfortunately, what the department hasn't told you is that they correctly, when they signed these contracts, included clauses related to confidentiality that included words like this—that they cannot disclose information except as otherwise required by law. Just because Defence enter into a contract that involves confidentiality—and I know that that's important; you need to have confidentiality in these projects so that Defence take care of information and don't hand it over to entities that have no business seeing it; they take care of it properly; they put it in safes. They also reciprocate: they require Naval Group to make sure they look after our information as well. That is proper. But you cannot have a clause in a contract oust the jurisdiction of the Senate in its oversight role, just as it would be preposterous if Defence were to claim that a court couldn't get access to documents, that a court couldn't subpoena documents, because there was something written in a statute.

The Senate's powers to obtain documents to carry out its oversight role come from section 49 of our Constitution, backed up in the Parliamentary Privileges Act. There can be no question that the Senate has power at law to obtain documents. It is not possible for the Department of Defence to sign a contract with a commercial party to oust that jurisdiction. It simply cannot happen. Unfortunately, that's the proposition that has been presented to the Senate. This time around, it's about a shipbuilding contract, but the next time around it could be something that other senators are inquiring into, and they may have a department turn around and say, 'We can't give it to the Senate; there's a confidentiality clause in the contract.' People can clearly appreciate that that would affect us in the execution of our role and our responsibilities, one of which is, of course, to review, examine, modify and pass legislation and the other, very importantly, is to scrutinise the executive.

Again, it's written into the contracts. If I look at the Department of Finance's advice in relation to confidentiality of contracts, they make it very clear that officials need to be mindful of things like FOI. I know; I am in the AAT in relation to this matter now. Again, if a contract says something is confidential, that is quite legitimate, but, to the extent that a statute, something that the parliament commands, grants a citizen a right to access, then the contract is void to the extent that it interferes with that statute right. Of course, that doesn't mean you just come in and ask for documents under FOI and they will be given to you. That's not the case, because the FOI Act provides certain protections in relation to confidentiality. But it doesn't rely on the contract. Right now, in the Senate Economics References Committee, we can't do our job looking into shipbuilding, and it's a really important job. I'll just look at one of the programs that we are examining: the submarine project. The history is that, back in 2009, it was identified in the Defence Capability Plan and the defence white paper that we needed to build 12 new submarines. There was a very rough estimate of budget. Between 2009 and 2015, a period that expanded across two governments—the Rudd-Gillard-Rudd government and also the Abbott-Turnbull government—$214 million was allocated to the Department of Defence to examine the Future Submarine project. They were to look at it, work out what ought to be in it and what ought to be out of it, and, presumably, to build up some reasonable costs. They came to the conclusion in about 2015—and they gave evidence to a Senate estimates committee—that the project would cost $50 billion out turned. That would include acquisition and sustainment.

We then went through a CEP, a competitive evaluation process. Out of that process we selected Naval Group as the partner to build our future submarines, but in there, somehow, the cost of the submarine went from an estimated $50 billion out turned for sustainment and acquisition to $89 billion out turned. I am going to ask officials about this at the next estimates. How do you go from a proposition that something will cost $50 billion out turned to $89 billion out turned without anyone even raising a question? No-one even said, 'How did that happen across the CEP? How did we get it so wrong? We spent $214 million—that was allocated in the lead-up to the CEP to work out exactly what the landscape was. Unfortunately, there was this huge error. Now we see $39 thousand million increase in the price of the Future Submarine project. Defence will argue that it's not a blowout because it was approved by government. What they've said is: 'It's your fault.' Somehow something went up $39 thousand million and no-one bothered to raise the questions: 'Can that be right? Can we have a submarine fleet suddenly go up $39 thousand million?' That increase is $2.8 million per day for 38 years. That's how much that increase was. I would have thought someone would have said, 'Hey, what happened? How did we get such a big increase?' But, no, the government just signed off on that project. They were caught up in a pre-election frenzy and wanted to do good, but, in fact, it looks like they've done harm. Since that time, we know that the project has had problems. This is one of the things that the economics committee is examining: how much Australian industry involvement is taking place. How are we building our sovereign naval shipbuilding capability in relation to this particular contract?

Defence resisted an OPD, but under FOI I got access to the plans of Naval Group as they went forward and made their tender to the Australian government about what it was that they thought they could do with Australian industry. It included things like partnering with ASC, setting up programs in schools and setting up capability centres. It included all manner of things. This committee has started to examine exactly what was offered versus what was contracted. They're the exact documents we are looking to obtain. What did the companies that won the job offer to do here in Australia, and what has been done? What has been contracted? They're very important issues.

Very unusually, the minister stood up in question time today and, in answer to the first question, said, 'I'm very frustrated with Naval Group'—because we are not getting what we should get from that contract. We have a committee of the Senate looking into this, and the Department of Defence is refusing to hand over documents. To be fair to the minister, she has, as she alluded to, sought to work out a way to grant access to those documents. But this has been going on for almost a year. If the Senate is to do its job properly, it has to be properly informed and it has to be able to receive information in a timely fashion. Otherwise we can pack up and go home. Otherwise we can operate remotely and simply press a button on our office walls whenever there's a vote. If we can't do the oversight role properly, we ought not be here. It's a very serious issue that I'm talking about. It's not just about naval shipbuilding; it's about the Senate's capacity to do the job that it is required to do under the Australian Constitution. We were granted powers to do those jobs for very good reason. I said this at a Senate committee that was examining certain elements of the department's refusal to provide the Senate with information. I think we're very close to a privileges resolution. I think we're very, very close because I can't see how any one of us could watch a committee stand still for six months waiting for the executive to respond favourably to provide it with the information it needs to do its inquiry. If that's not fettering the ability of a committee to do its work then I don't know what is.

Minister Birmingham has weighed in on this issue. It's very important. One day, people on the government side of the chamber will be in opposition and they will be wanting to do their job properly. I said in a speech—it might have been in 2019—that the Senate has lost its mojo. It disheartens me to say that. I watched the House of Commons, in seeking to get access to documents from Facebook, arrest someone in a hotel, bring them back to the Commons and say to them: 'You can't leave. If you don't hand over the documents we're putting you in a cell'. That's mojo. We in this place, on a repetitive basis, ask for documents to be provided and simply ignore the executive when they fail to deliver.

I, for one, am not going to let that happen, because I take my role as a senator very, very seriously. We are put here by the people of our respective states to do a proper job—and that job involves keeping an eye on the executive, scrutinising the executive. I know scrutiny is to the Prime Minister as kryptonite is to Superman. I know he doesn't like it very much. But that is our job. We are empowered to do it and we should do it. We should not accept a claim by the executive that we cannot have access to information to do our job. We are tasked to do that and we should do it. We need the Department of Defence to comply in this particular instance, and the minister needs to direct them to do so.