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Foreign Affairs, Defence and Trade Legislation Committee—Senate Standing—Additional estimates 2020-21—Report, dated April 2021


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April 2021

The Senate

Foreign Affairs, Defence and Trade Legislation Committee

Additional estimates 2020-21

© Commonwealth of Australia 2021

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Committee Membership

Chair Senator the Hon Eric Abetz LP, TAS

Deputy Chair Senator Kimberley Kitching ALP, VIC

Members Senator Tim Ayres ALP, NSW

Senator the Hon David Fawcett LP, SA

Senator the Hon Concetta Fierravanti-Wells LP, NSW

Senator Jacqui Lambie JLN, TAS

Senators in attendance Senators Abetz, Kitching, Ayres, Fawcett, Fierravanti-Wells, Lambie, Antic, Canavan, Carr, Farrell, Faruqi, Green, McKenzie, Molan, Paterson, Patrick, Rice, Roberts, Sheldon, Dean Smith, Steele-John, Van, Wong

Secretariat Lyn Beverley, Committee Secretary Margaret Cahill, Research Officer Shannon Ross, Administrative Officer

Committee Webpage: http://www.aph.gov.au/senate_fadt

PO Box 6100 Phone: + 61 2 6277 3535

Parliament House Fax: + 61 2 6277 5818

Canberra ACT 2600 Email: fadt.sen@aph.gov.au

Australia

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Table of Contents

Committee Membership .................................................................................................................. iii

Chapter 1—Additional estimates 2020-21 ....................................................................................... 1

Reference ............................................................................................................................................... 1

Portfolio coverage ................................................................................................................................ 1

Portfolio Additional Statements 2020-21 .......................................................................................... 1

Hearings ................................................................................................................................................ 1

Questions on notice and Hansard transcripts .................................................................................. 2

Defence Portfolio, 24 March 2021 ...................................................................................................... 3

Foreign Affairs and Trade Portfolio, 25 March 2021 ....................................................................... 6

Appendix 1—Tabled documents .................................................................................................... 11

1

Chapter 1

Additional estimates 2020-21

Reference 1.1 On 18 February 2021 the Senate referred the following documents to the Senate Foreign Affairs, Defence and Trade Legislation Committee (the Committee) for examination and report:

 Particulars of proposed additional expenditure in respect of the year ending on 30 June 2021 [Appropriation Bill (No. 3) 2020-21];  Particulars of certain proposed additional expenditure in respect of the year ending on 30 June 2021 [Appropriation Bill (No. 4) 2020-21];  Final Budget Outcome 2019-20; and  Advances under the Annual Appropriation Acts for 2019-20.1

1.2 A reporting date of Tuesday, 20 April 2021 was set for the Committee to report on its consideration of the 2020-21 Additional Estimates.2

Portfolio coverage 1.3 The Committee has responsibility for examining the expenditure and outcomes of the following:

 Defence Portfolio (including Veterans' Affairs); and  Foreign Affairs and Trade Portfolio.3

Portfolio Additional Statements 2020-21 1.4 The Portfolio Additional Statements for 2020-21 for the Defence Portfolio, Department of Veterans' Affairs and the Foreign Affairs and Trade Portfolio were tabled in the Senate on 18 February 2021.4

Hearings 1.5 The Committee conducted public hearings 24 and 25 March 2021.

1.6 On 24 March, the Committee examined the Defence Portfolio (including Veterans' Affairs) and received evidence from: Senator the Hon Marise Payne, then Acting Minister for Defence, and also representing the Minister for Veterans' Affairs; Senator the Hon Amanda Stoker, Assistant Minister to the

1 Journals of the Senate, No. 88, 18 February 2021, p. 3110.

2 Journals of the Senate, No. 76, 2 December 2020, p. 2677.

3 Journals of the Senate, No. 3, 4 July 2019, pp. 83-84. This resolution was subsequently amended on

13 February 2020; however, the amendments did not relate to these portfolios. See Journals of the Senate, No. 42, 13 February 2020, pp. 1268-69.

4 Journals of the Senate, No. 88, 18 February 2021, p. 3110.

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Attorney-General, representing the Minister for Veterans' Affairs; and officers of the Department of Defence, Department of Veterans' Affairs, and relevant portfolio bodies.

1.7 On 25 March, the Committee examined the Foreign Affairs and Trade Portfolio and received evidence from: Senator the Hon Marise Payne, Minister for Foreign Affairs; Senator the Hon Jonathon Duniam, Assistant Minister for Industry Development, representing the Minister for Trade, Tourism and Investment; and officers of the Department of Foreign Affairs and Trade and relevant portfolio agencies.

1.8 The Committee expresses its appreciation for the assistance of the Ministers and officials who appeared.

1.9 Over the course of the hearings the Committee took evidence from the following bodies:

Defence Portfolio (including Veterans' Affairs)

 Naval Shipbuilding Expert Advisory Panel5  Department of Defence  Australian Signals Directorate  Defence Housing Australia  Australian War Memorial  Department of Veterans' Affairs

Foreign Affairs and Trade Portfolio

 Department of Foreign Affairs and Trade  Australian Trade and Investment Commission  Tourism Australia

1.10 The Committee released Export Finance Australia without being examined.

Questions on notice and Hansard transcripts 1.11 In accordance with Standing Order 26(9)(a), the Committee set 7 May 2021 as the due date for the return of answers to questions on notice.

1.12 The transcripts of these public hearings and answers and additional information are available on the Committee's website at:

https://www.aph.gov.au/Parliamentary_Business/Senate_estimates/fadt

1.13 In this report references to Hansard page numbers are to the proof transcripts. Page numbers may vary between the proof and official Hansard transcript.

5 The Naval Shipbuilding Expert Advisory Panel replaced the Naval Shipbuilding Advisory Board.

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Defence Portfolio, 24 March 2021

Naval Shipbuilding Expert Advisory Panel (NSEAP) 1.14 Topics examined during the hearing included:

 Establishment, membership, role, responsibilities, governance arrangements, transparency and reporting lines of the newly established NSEAP (pp. 5-9)

 Appointment of Professor Don Winter as special advisor to the Prime Minister (p. 8)  Australian industry involvement in the development and installation of the combat system for the Future Submarine Program (pp. 11-12)  Points of difference between the former Naval Shipbuilding Advisory Board

and the NSEAP (p. 12)

Department of Defence (Defence) 1.15 Topics examined during the hearing included:

 Staffing arrangements in the offices of Senator the Hon Linda Reynolds CSC as the Minister for Defence and as former Minister for Defence Industry, including security clearance requirements, procedures for handling code word and top-secret material, security breaches and termination of staff (pp. 12-25, 33-37)

 Minister Reynolds' leave (pp. 30, 38)  Cost of settlement of legal action following comments by Minister Reynolds about Ms Brittany Higgins (pp. 37-38)  Decision of Minister Reynolds not to attend the Raisina Dialogue or two-

plus-two dialogue in India in April (pp. 29-30)  Defence advice to the Foreign Investment Review Board in relation to the granting of a lease to Cockatoo Island Mining (pp. 26-28)  Australia's participation in Exercise MALABAR 2020 (p. 30)  Defence renewal of contract with Global Switch for data storage (p. 31)  Loyal Wingman unmanned aircraft system capability, including ability to

team with manned aircraft, development costs, export potential and intellectual property (pp. 31-33)  Australia-Singapore military training initiative and decision by Singapore to have Townsville as the preferred location as a storage and maintenance

facility (pp. 38-40)  Consideration of moving the armoured cavalry regiment at Enoggera in Brisbane nearer to Shoalwater Bay (p. 40)  Inspector-General of the Australia Defence Force Afghanistan inquiry

(Brereton report), including: investigation and inquiry processes; Fat Lady's Arms drinking establishment at Tarin Kot base; disciplinary action against Special Air Service members and ranks in relation to contents of the report;

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question of knowledge of alleged war crimes by commanding officers; returning honours and awards; use of administrative action to deal with alleged breaches of misconduct in Afghanistan arising from the Brereton inquiry; interviews, including Matiullah Khan (former Afghan chief of police, Uruzgan province); and individuals assisting the inquiry (pp. 44-49, 67-71)  Dr Samantha Crompvoets research into the health and welfare of the Special

Operations Command (pp. 47-48, 99-100)  Work on the Naval Shipbuilding and Sustainment Plan (pp. 51-53)  Future Submarine Program, including ability to incorporate new technology

through service life, battery technology, renegotiation of the Strategic Partnering Agreement (SPA) and amendments, inclusion of 60 per cent Australian content in SPA, work done by Defence in contingency planning, Australian industry content requirement for combat system, submariner workforce planning and future capacity (pp. 41-43, 50, 55-64, 96, 98-101)  Australia's operational combat period in Afghanistan, including risks of

civilian casualties during day and night operations, 'catch and release' policy, and investigations into alleged unlawful actions by Australian troops (pp. 44-45)  Collins Class Life Of Type Extension funding (p. 51)  Withdrawal date for the Huon class minehunters (pp. 53-54)  Selection of Apache helicopter to replace the Tiger fleet (p. 54)  Reports of Chinese Communist Party members in defence contractor companies (pp. 64-65)  Hunter class frigates schedule risk, including delay in system definition review (pp. 64-66)  Australian forces engagement with Matiullah Khan, force partner ratios, SAS deployment periods (pp. 71-72)  Gender diversity and inclusion within the Australian Defence Force (pp. 72-74)  Changes to capital budget over 2016-17-2022-23 period (pp. 74-77)  Reduction in expenditure on top 30 military equipment acquisition programs, including Poseidon (pp. 77-78)  Cape class patrol boats delay due to supply of materially deficient aluminium (pp. 78-81)  Battlefield Command Systems project expenditure reduction (p. 81)  Mounted Combat Reconnaissance Capability expenditure reduction (pp. 81-82)  Future Air to Air Weapons for the New Air Combat Capability expenditure reduction (pp. 82-83)  Cancellations of F-35 movements related to weather conditions and flooding of the base at Williamtown (pp. 83-84)

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 Commencement of Australian industry capability audits in December 2020 (pp. 84-85)  Transition of the Centre for Defence Industry Capability from Department of Industry, Sciences, Energy and Resources to Defence (pp. 85-87)  LAND 400 Boxer combat reconnaissance vehicle project phase 2 acquisition,

including issues raised in the Australian National Audit Office review (pp. 87-89)  Jindalee Operational Radar Network upgrade schedule delay (pp. 89-91)  Replacement of the escape and rescue system for Collins class submarines contract cancellation (pp. 91-94)  MRH-90 helicopter, including tail rotor blade failure incident and subsequent rectification, cabin door related grounding, low availability, gun mount, and design flaws in reduced functionality (pp. 94-98)  Super Hornet accident at Amberley Air Force Base (p. 98)  Dr Dawson-Wells' allegations concerning two currently serving members of Defence's judicial system (p. 99)

Australian Signals Directorate (ASD) 1.16 Topics examined during the hearing included:

 ASD response to exploitation of Microsoft Exchange Server vulnerabilities (pp. 102-104)  Cyber security of Australian elections and engagement with the Australian Electoral Commission (pp. 104-105)  ASD compliance with the Essential Eight compliance mitigation strategies

and assistance to departments and agencies to meet compliance (p. 105)  Adequacy of resourcing for ASD to provide assistance to departments and agencies (pp. 105-106)  Intelligence on Australians (p. 106)

Defence Housing Australia 1.17 The Committee examined the following topic:

 Update on Mount Lofty redevelopment project in Toowoomba (pp. 106-107)

Australian War Memorial 1.18 Topics examined during the hearing included:

 Progress on the commissioning of a sculpture to recognise the physical and mental suffering resulting from service (p. 108)  Clearance processes for the first volume of the Official History of the Peacekeeping operations in East Timor (p. 108)  Afghanistan exhibition, including impact of the Brereton Report on the

exhibition (pp. 108-111)

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 AWM Development Project, including the Parliamentary Standing Committee on Public Works inquiry, public consultation processes and Australian Heritage Council report (pp. 109-111)  Heritage Management Plan and impact on the redevelopment (p. 111)

Department of Veterans’ Affairs (DVA) 1.19 Topics examined during the hearing included:

 National Commissioner for Defence and Veteran Suicide Prevention (National Commissioner), including role and powers, timeline of legislation, interim process, indications of support for the National Commissioner model, and potential for a Royal Commission (pp. 114-117)

 Claims processing, including wait times and allocation of permanent impairment claims to delegates, staffing and use of contractors versus ongoing public servants, delegates' caseloads, low percentage of MCRA initial liability clams and permanent impairment claims meeting 90 days time-frame (pp. 117-121, 125-129)  Waiting times for veterans' payments (p. 121)  Investigations into claim of DVA medical advisers or delegates pressuring a

veteran's treating doctor (pp. 121-122)  Psychiatric Assistance Dog Progam (pp. 123-124)  Pharmacy Hotline (p. 124)  Veterans’ Family Advocate (p. 125)  Progress on opening of Wellbeing Centres (pp. 129-130)  Mental health and suicide prevention programs, and the interim National

Commissioner's research symposium on preventing suicide (pp. 130-131)

Foreign Affairs and Trade Portfolio, 25 March 2021

Department of Foreign Affairs and Trade (DFAT) 1.20 Topics examined during the hearing included:

Non-trade programs  Repatriation of Australians stranded overseas as a result of COVID-19, including quarantine and flight capacity, number in vulnerable category, DFAT taskforce, and interdepartmental deputies committee (pp. 4-10)  2020 visit to Australia of The Hon George Brandis, Australian High

Commissioner to the United Kingdom, for mid-term consultations and leave (pp. 10-12)  Employment of Mr Zachary August in the Australian High Commission in London and travel to Australia in 2020 (pp. 13-14)  Myanmar coup, including redirection of funding, aid program, sanctions

regime, ASEAN response, engagement with the Committee Representing the Pyidaungsu Hluttaw, and United Nations (UN) Human Rights Council response (pp. 14-20, 70-73)

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 COVID-19 crisis in PNG, including Australia's response, supply and sourcing of the vaccine, rollout of vaccination program, and reduction of two staff in the Port Moresby mission (pp. 20-30)  Eritrea-Ethiopia conflict in Tigray, including alleged human rights abuses

by Eritrean troops, Australian Government response and engagement with Tigrayan diaspora (pp. 18-19, 89-90)  Documentary video made by the Australian Embassy in Thailand about the Thai monarchy (pp. 21-22)  Consular assistance to Australians detained overseas (pp. 30-31, 44)  Australia's signing of the Joint Declaration Against Arbitrary Detention

(pp. 31-32)  Release of Dr Kylie Moore-Gilbert from detention in Iran and impact of this case on Australia's bilateral relationship with Iran (pp. 32, 98-99)  COVID-19 vaccine assistance in the Pacific and status of Taiwan vaccine

supply and rollout (pp. 33)  Economic support measures for the Pacific impacted by COVID-19 (p. 34)  Size of Chinese Consulate-General in Adelaide (pp. 35-36)  Government response to the Joint Standing Committee on Foreign Affairs,

Defence and Trade report Criminality, corruption and impunity: Should Australia join the Global Magnitsky movement, and introduction of Magnitsky legislation (pp. 36-37)  Alleged human rights violations of the Uyghur people in Xinjiang Province, including whether it constitutes genocide, Australia's actions and representations and possibility of the imposition of sanctions, and engagement with Uyghur community in Australia (pp. 37-38, 53-54)  Current level of autonomy in Hong Kong (pp. 38-39)  The Philippines, including assistance with drafting antiterrorism laws, and monitoring of extrajudicial killings (pp. 39-40)  Costs of UN membership and implications of withdrawal (pp. 40-42)  Taiwan-China tensions and Australian representations to China (pp. 42-43)  China's exclusion of consular officials to observe court proceeding of their nationals (pp. 43-44)  Consular assistance, contact with and advocacy on behalf of Julian Assange (pp. 44-45, 62-63)  Advocacy for abolishing the death penalty (pp. 45-46)  Christian persecution in Algeria, Mauritania and Somalia (p. 47)  The Hon Mathias Cormann’s campaign for Secretary-General of the Organisation for Economic Cooperation and Development (pp. 47-52, 63)  The Government's characterisation of the deaths of thousands of Armenians at the end of the Ottoman Empire in 1915-16 (p. 54)  Official Development Assistance budget, including resumption of indexation from 2022-23, reporting processes to track expenditure,

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allocation and appropriation of $500 million funding for COVID vaccine program (pp. 54-61, 74-76)  China’s new Coast Guard Law (pp. 61-62)  Australia's withdrawal from the Green Climate Fund and current level of climate finance; Australia's attendance at the UK Global Summit and ministerial meeting on climate and development, and President Biden's climate leaders summit; and Australia meeting its Paris commitments (pp. 63-64)  Climate policy, including Australia's net zero emissions goal, the Biden Administration's adoption of the net-zero emissions by 2050 target, UN Climate Change Conference (COP26) November 2021 preparations and climate policy more broadly (pp. 77-83)  Repatriation and consular assistance to Australians with serious health issues in the al-Roj camp in Syria (pp. 65-66)  Bilateral relationship with Sri Lanka (pp. 66-67)  Persecution of LGBTIQ+ people in Chechnya (p. 67-68)  Cessation of funding for Australian Middle East NGO Cooperation Agreement Program (AMENCA) (pp. 68, 87-89)  Australian aid to the Palestine territories, including reduction of funding to UNRWA, advice on Australia's expectations about tolerance, non-discrimination, equality and neutrality, and aid review (pp. 68-69, 99-100)  Australian Wool Innovation consultation on new and emerging markets with DFAT (pp. 73-74)  Pacific Islands Forum, including withdrawal of five countries, and ballot for new Secretary-General (pp. 83-85)  Memorandum of Understanding between a Chinese fishing company and the government of the Western Province fishery project on Daru island, Papua New Guinea (pp. 85-87)  Cyber security, including development and proposed launch of the International Cyber and Critical Technology Strategy, and attribution of recent high-profile cyber attacks (pp. 90-92)  COVID-19 vaccine rollout for DFAT staff (pp. 92-94)  Take up of Chinese COVID-19 vaccines in South-East Asia and the Pacific (pp. 94-95)  Implementation of foreign relations legislation (pp. 96-97)  Armenia-Azerbaijan conflict (p. 98)  Cambodia, including representations about alleged human rights violations by the Hun Sen regime, and COVID-19 aid (p. 98)

Trade programs  Chinese concerns about quality of Australian coal (pp. 102-103)  European plan for carbon border adjustment mechanism, including implications for the Austrade-EU Free Trade Agreement negotiation

(pp. 103-106)

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 Economic impacts of trade issues with China, including on coal, barley and wine (pp. 106-111)  Human and labour rights clauses in free trade agreements (pp. 111-112)  Regional Comprehensive Economic Partnership, including investor-state

dispute settlement provision, and labour market testing (pp. 112-113)  Consequences of comments by Mr George Christensen MP on China (p. 115)  New Zealand attempts to trademark Manuka honey (pp. 114-115)

Australian Trade and Investment Commission (Austrade) 1.21 Topics examined during the hearing included:

 Audit of Austrade websites and review of policies relating to publishing material (pp. 116)  Tourism Aviation Network Support Program, including methodology for determining the regions included (pp. 117-126)  Process for appointment of new Chief Executive Officer (p. 126)  COVID-19 Consumer Travel Support Program (pp. 126-127)  Business Events Grants Program (pp. 127-128)  Tourism sector job losses as a result of COVID-19 (pp. 129-130)  Assistance to zoos and aquariums under the COVID-19 Relief and Recovery

Fund (p. 130)  Tourism 2030 (p. 130)

Tourism Australia 1.22 Topics examined during the hearing included:

 Impact of JobKeeper ending (pp. 131-133)  Managing Director's speech at the Destination Australia Conference and comments about the possible focus on longer-stay visitors in the future if quarantine requirements continue (p. 134)

 National Experience Content Initiative (p. 135)

Senator the Hon Eric Abetz Chair

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Appendix 1 Tabled documents

Defence Portfolio (including Veterans' Affairs)

Wednesday, 24 March 2021  Ms Liz Cosson AM CSC, Secretary, Department of Veterans' Affairs: Opening statement  Ms Liz Cosson AM CSC, Secretary, Department of Veterans' Affairs:

Veteran Mental Health and Suicide Prevention Initiatives

Foreign Affairs and Trade Portfolio

Thursday, 25 March 2021  Senator Janet Rice: Joint statement on Xinjiang  Mr Murali Venugopal, Chief Finance Officer, Department of Foreign Affairs and Trade: Senate Estimates Reporting, DFAT Country and Regional

Programs, extract at 28 February 2021  Senator the Hon Penny Wong: Official Development Assistance elements of 2020-21 budget and Mid-Year Economic and Fiscal Outlook  Senator Jordon Steele-John: 'It's unethical': Why I altered coal data

results', Australian Financial Review, 15 January 2021  Ms Phillipa Harrison, Managing Director, Tourism Australia: Opening statement  Ms Frances Adamson, Secretary, Department of Foreign Affairs and Trade:

Responses to questions taken on notice at the hearing from Senators Abetz, Ayres, Faruqi, Rice, Roberts, Smith