Richard Marles (Corio, Australian Labor Party, Shadow Minister for Immigration and Border Protection) Share this | Hansard source

I have a question up front, which the minister can answer at his next go. For the sake of the Australian defence industry, can you personally commit to not cutting steel ever again?

Mr Pyne interjecting—

I see. But I do want to take issue with the defence industry minister's attempt to play politics in respect of the past and the way in which both parties approach defence industry now. The defence industry minister favours referring to spending during the Rudd-Gillard years. It is true that defence spending as a percentage of GDP was at 1.6 per cent. What the defence industry minister does not also say is that at one point during the Howard government years it was at 1.62 per cent—barely any more than was spent in the particular year he referred to. Indeed, I think there was a point during the Rudd-Gillard years where spending was taken to 1.93 per cent of GDP, which is higher than at any time during the Howard years. In the last budget of the Gillard government the amount committed to defence over the forward estimates was a record in absolute terms. So you can take statistics from certain periods and try to make an argument. But, if we are all honest and look at the stretch of time in respect of those statistics, the point that the defence industry minister makes simply does not stand up.

In terms of the valley of death, the reality is that it is something that is being experienced right now because of this government. This was a foreseeable event. Whilst the Rudd-Gillard government had built the skilled workforce in naval shipbuilding up to some 4,000, the end of construction of the LHDs and the air warfare destroyers was going to give rise to a gap before the building of the future frigates and the OPVs. Labor's intent was to fill that valley of death by making sure that the supply ships that the Navy was procuring were built in Australia and by bringing forward the timetable for the OPVs. What has actually occurred is that, thanks to this government, the supply ships are now being built in Spain and that, here in 2017, we still do not have a preferred tenderer to construct the OPVs. So the valley of death that we are experiencing now, which has given rise to 1,500 people losing their jobs and to Williamstown and Forgacs in Newcastle basically being at a standstill, is a product of the decisions that have been made by this government. The valley of death is being experienced right now because of this government and because the plans that had been put in place by the former Labor government were not, in fact, followed.

I do want to ask a question of the defence industry minister, though. The decision to pursue a defence industry is one that both parties obviously support, but it is a very significant and deep decision. In needs to be about jobs. It needs to be about more than jobs.

I want to draw your attention, Mr Deputy Speaker, to experiences I had last year when I visited Israel, where I visited companies such as IAI, Elbit and Rafael. It was an illuminating experience to see those defence industry companies operating in Israel. What was completely clear was the organic nature of their relationship with the IDF. It was also clear that the majority of the work that each of those companies did was export based, albeit their largest customer was the IDF, and the workforce profile of these companies was also extraordinary: they were mainly scientific and engineering houses. It was hard to come away from that experience without the question being in one's mind about whether it is possible to have a long-term defence industry which does not have an export basis as part of it.

I do know that the export potential of our own defence industry is a matter of some interest to the defence industry minister, and it leads me to this question: in respect of the future frigates—because I think they particularly offer the best opportunity to leverage a domestic, export based defence industry in the realm of shipbuilding and naval construction—is that a factor in the way in which the government will ultimately determine who ends up being the successful tenderer? Clearly, building the best frigate is the principal concern, but will the capacity to build an export based shipbuilding industry be a factor?

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