Teresa Gambaro (Brisbane, Liberal Party) Share this | Hansard source

On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I present the following reports: Principles and practice—Australian defence industry and exports and the Review of the Defence annual report 2013-14.

Reports made parliamentary papers in accordance with standing order 39(e).

by leave—On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I have the great pleasure of presenting two reports:

The report into the inquiry of the Australian government support for Australian defence industry exports, entitled Principles and practice: Australian defence industry and exports; and

The Review of the Defence annual report 2013-14.

I will give an overview of each report, beginning with the report on the inquiry into Australian defence exports.

The committee accepts evidence presented—and validated by the recommendation of the first principles review—that there are elements of defence industry essential to the Australian Defence Force capability. Defence therefore has an obligation to identify elements within the defence industry that constitute fundamental inputs to capabilities, known as FICs.

In the committee's view, Defence must use available means to enhance and sustain FIC related elements of the defence industry that affect ADF capability, including through domestic procurement programs and enhanced support for exports.

Where exporting would assist to sustain or develop industry elements that are identified as FICs, support for defence exports should be viewed as a core Defence responsibility, in the same way as service chiefs manage other FIC elements.

This would fundamentally change how the assessment for value for money should be approached within the Defence procurement process, particularly by establishing long-term partnerships with industry, rather than trying to achieve value for money through open competition as a default position. Many projects would deliver better value for money with long-term partnering agreements, such as those that have been shown by the UK experience.

The report contains 19 detailed recommendations. The committee recommended providing assistance for Australian defence exports based on a distinction between core and secondary export focus:

The core export focus should apply to elements of industry output recognised as a fundamental input to capability, where defence exports can help sustain or spread production costs. This support should extend to funding for research and development that supports exports that will have an impact on the associated FICs. Secondary export focus would apply to those elements of industry output not recognised as a fundamental input to capability. In such cases, Defence and other related agencies should provide assistance, wherever practicable.

Lastly, subject to acceptance of the committee's core proposals, the committee has recommended that Defence discontinue the Priority Industry Capability and Strategic Industry Capability programs, retain the Australian Industry Capability targets for procurement activity that do not involve an identified fundamental input to capability, and continue to promote the Global Supply Chain scheme wherever possible.

Today I also present the committee's report on the Review of the Defence Annual Report 2013-14. I will mention in turn the key issues that arose during the committee's review.

The committee considered personnel matters, including Defence's critical categories of employment, Project Suakin and Reserve Policy.

Defence needs to ensure that employees have task-specific competence for their role and the relevant experience. The Job Families Project, an approach used to monitor APS gaps in critical capabilities, needs to be further developed. The committee has recommended that Defence collate and, in particular, publish figures on Project Suakin.

The committee also examined a range of mental health issues in the ADF. The committee recommends the departments of Defence and Veterans' Affairs report on the progress and the results of their mental health programs.

The committee is concerned about the extent of unfunded liabilities in Defence estate and infrastructure and believes it is important to have visibility on the cumulative effects. Although the committee does not expect Defence to include unfunded liabilities in its annual financial statements, the committee recommends that Defence report more details of its unfunded liabilities.

The committee is pleased by Defence's efforts on fuel farms and fuel management. To further this progress, the committee believes Defence should actively explore options to engage and collaborate much more with industry. In addition, the committee recommends enhanced reporting in future Defence annual reports on the Fuel Services Branch.

The committee is also pleased with the long-term improvements to Defence Housing and the quality of housing options available to ADF families. However, the committee recommends Defence, in partnership with Defence Housing, prepare a much more effective community consultation and communication framework for future housing redevelopments.

More generally, the committee found that reporting of performance should be much more transparent. For example, reporting to parliament on the Joint Strike Fighter needs to be much more comprehensive and similar to that made to the US congress.

In conclusion, the committee acknowledges the dedication and commitment of the men and women of the ADF and commends them on the outstanding service they provide to the nation. The committee also recognises the work of the APS in supporting ADF personnel on operations. It should also be recognised that ADF personnel are supported by a strong network of family and friends, and the committee expresses its appreciation for their sacrifice.

I would like to thank the committee members. I note the member opposite, Mr Feeney, and thank him so much for his efforts and his work in this area. I would like to thank the many witnesses who gave their time to appear at the hearings and those who made submissions to the inquiries. I would like to also express my sincere thanks to the secretariat for the fine work that they do to assist all members and senators on the committee. I commend the reports to the House.

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