Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Hunter proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government’s failure to properly manage the Defence budget and Defence procurement policy, and it implications for Australia’s national security.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

I know that the Minister for Defence will agree—indeed, I know all members of this place will agree—that the first obligation of any national government is the defence of its country and its people. It is an important and big task, one which requires sound strategic analysis and planning, sound economic management and, of course, competent procurement management. It also requires a competent approach to the recruitment and retention of those who serve in our Navy, our Army and our Air Force. This is an area in which the Howard government has been found wanting in recent years. But it is the first three points that I want to concentrate on this afternoon: one, strategic planning; two, capability policy, planning and implementation; and, three, the economic management of Australia’s defence capability programs. These are, as I said, very big tasks—big tasks that must be undertaken in the right order.

Defence analysts and academics around this country disagree on many aspects of defence strategic policy, but there is one matter on which there is unanimous agreement, and that is that capability planning in this country must be guided by strategy; that is, strategic guidance is the approach to capability planning. To put it another way, you must first decide exactly what it is you want your defence force to do before you decide what shape and size your defence force should take and what kit to give it—that is, first determining the size, weight and mix of each of our services and then, within a tight budget constraint, determining whether we need more people or fewer people, more tanks or fewer tanks, more submarines or fewer submarines, more jet fighters or fewer jet fighters et cetera. You cannot adequately answer these questions if you have not set a clear strategic direction, and you will not meet the obligation to protect the nation and its interests if you do not ensure that defence purchasing is guided by strategy.

This is a government that is working off a Defence White Paper which is now seven years old and has thrown its own capability plan out the window. Of all the charges we might lay against the government either on defence or other issues, this is probably the most serious of all: the fact that the government, in defence spending, is not putting the national interest first but is, indeed, putting the interests of the Liberal Party first. Of course, there could be no better example of this than the recent political fix we saw with the $6 billion outlay for some 24 Super Hornets. Here is a government determined to make sure that it does not go into an election potentially charged with creating an air capability gap in this country. It has decided, without any recourse to the budget, to spend an unfunded $6 billion on an aircraft that the Air Force says that we do not need and most experts say is not up to the job—a fourth generation aircraft to do a fifth generation’s job. As I said, there is no funding for this particular purchasing program. You will not find the $6 billion in the defence capability plan and you certainly will not find it in the 2006-07 budget.

So let us just quickly recap what happened here. The government rushed in to signing up to the Joint Strike Fighter program without taking into account or making contingencies for the inevitable delays and cost blow-outs of that project and it concurrently decided to retire the F111s earlier. So where does that leave us? It potentially leaves us with an air capability gap. The government has been telling us for months that we do not have a looming air capability gap, that we should not be worried about the future of our air superiority—which, I should add, is the key to this nation’s defence—and, as I understand it, it maintains that position. The minister might want to clarify that when he makes his contribution in this debate. The government maintains the position that no looming air capability gap exists, yet it has outlaid $6 billion on an aircraft that, as I said, most experts say is not up to the job. There are plenty of other examples—which I do not have time to go through this afternoon—but, in terms of departure from the defence capability plan, certainly the Abrams tanks stand out.

Each year Australia spends around two per cent of GDP—or about $20 billion—on its defence needs. That sounds like a great deal of money—and it is—but, in these times, when we have the three roles of defending our continent, taking care of our own region and taking care of Australia’s interests further afield, defence is a very expensive thing. The reality is that two per cent may not be enough. Of course, it is not our peak in spending. In 1967-68, during the period of the Vietnam War, we were spending around 3.9 per cent of GDP. But, certainly at two per cent, we cannot afford to waste a cent. Every dollar wasted by this government is a dollar not available to be spent on critical assets needed to defend the country and, indeed, to defend the men and women who wear a uniform in defence of this country.

This government takes the gold medal for waste and mismanagement. The next best example, of course, is the Seasprite helicopter. The Seasprite helicopter was to be the Navy’s attack weapon. It was supposed to be out there protecting our surface ships but, as we speak today, the Seasprite is not protecting our frigates. The Seasprites, nine of them, are sitting in their hangar in Nowra. Why are they sitting in their hangar in Nowra? Because this government pushed the envelope too far on their capability. They tried to do much more than the original concept with that helicopter and consequently mismanaged that program to the extent that we are now facing enormous delays and even doubt about whether the Seasprite helicopter will ever fly at all.

My challenge to the minister on this point today is to answer three questions. First, is he going to scrap the Seasprite helicopter, as has been widely rumoured in the media; second, what will be the cost to the taxpayer; and third, what does it mean for the Navy’s future air capability? I will have a go at answering the second question for him. What we do know is that the government has now spent $1 billion on 11 Seasprite helicopters for the Navy.

Opposition Member:

Opposition member interjecting—

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

I will pick up on the interjection and anticipate the minister’s response. They signed the contract on the Seasprite. I can anticipate him saying, ‘It was originally a Labor idea.’ True, the original concept was a Labor idea—but not the idea of pushing beyond the capabilities of the copter or the management of the project over the last 11 years. A billion dollars has been spent. If the minister decides to flush that $1 billion down the plughole—which is widely rumoured to be a fair chance—then he will have to spend at least another $1.5 billion on a new helicopter. In addition to that, we all read the recent letter from the contractor, Kaman. He will probably be facing compensation payments to the primary contractor.

I do not know whether the minister is going to scrap the Seasprite and sell it for scrap or not. Maybe we will get an answer from him today. He might surprise us. But what I do know is that whatever decision he takes, the taxpayer and national security, vis-a-vis our defence capability, will be the losers. His choices are: flush a billion dollars down the drain, spend another $1.5 billion and face compensation payments, or invest what is rumoured to be about another $60 million in the Seasprite project in the hope that within the next 25 months the Seasprite will be in the air doing the job it has been contracted to do. Neither choice is a particularly attractive one. We concede that. But this is a problem of the government’s own making. I suspect that most taxpayers would think that another $60 million and a fair chance of the aircraft becoming operational is probably a better choice than throwing $1 billion away and spending another $1.5 billion. I do think most taxpayers would think that is a better option, particularly if it means delivering the project in 2010—which is not likely to be the case if the minister goes shopping elsewhere. I have seen the Seasprite helicopters, brand new and shiny, in their hangar down in Nowra. I have sat in the Seasprite helicopter. It is an impressive-looking aircraft. The thought of that aircraft being used for scrap after so much public money has been invested in that project would make any taxpayer cry. So I challenge the minister to clarify that point today.

Let me go through a few of the other projects: the airborne early warning and control aircraft, late and over budget; the new air defence command and control system, late and over budget; the FA18 upgrade, late and over budget; the FFG frigate upgrade, late and over budget; the M113 armoured personnel carrier, late and over budget; the Joint Strike Fighter project, late already and already over budget. Now we are told that the air warfare destroyer project—not even at second pass—is already over budget. I could mention more. There are more on the list, I can guarantee the House, but I have got 15 minutes and I am not going to waste it going through them all.

The defence budget is in crisis. You do not have to believe me; ask the experts. Read Des Ball, Hugh White and others who have been saying the same. A huge gap is opening up between funding and spend. The Super Hornet project alone puts the budget $6 billion overspent. I calculate the total capital cost of late or stalled projects is now around $14 billion. We spend $20 billion on defence, and this minister has overrun the budget by some $14 billion in capital terms. What he has not done, as has been so adequately pointed out by Mark Thomson from ASPI, is to take into account the recurrent costs of operating all these projects that are now over budget and running late.

It only gets worse. The Defence Materiel Organisation has conceded that around 30 per cent of its current projects are delayed. And of course delays equal greater costs. The high tempo of the ADF is likely to continue for some time to come, particularly given the government’s determination to stay the course in Iraq; our commitments in Afghanistan and in our own region, with a developing arc of instability; and of course we do expect the changing balance in the broader region, including all of Asia, to continue to evolve over the next few years. All these things will continue to impose additional costs on the defence budget.

Increasingly, wealthy nations in the Asian region, including South-East Asia, are gaining access to off-the-shelf, high-tech assets like submarines and aircraft—areas where we have enjoyed superiority for a long time, but it is a superiority which is closing very quickly. This has been pointed out by ASPI, particularly the difficulties we face with respect to antisubmarine warfare capability.

The minister is pretty predictable; in fact, the government is pretty predictable on the political fixes. In this election year—make no mistake about it—they will spend up big in the May budget. They will spend billions extra in the May budget. They have been crying already about three per cent real growth, but the problem is that the waste is probably taking that into reverse. We have not got three per cent real growth when money is being thrown out the window on a daily basis, but they will spend up. The problem is that, while we understand and know that they have the capacity to spend up big in this budget in the middle of a resources boom, that will not continue, and when you make commitments like this they are ongoing. When you make a decision on an asset purchase, it is a 30-year commitment. During budget time, the minister needs to explain how he is going to make that sort of spending sustainable given the waste and mismanagement that we have seen in recent years.

Today is the opportunity for him to answer some of those questions and to explain to the parliament why I am wrong to accuse them of undermining Australia’s national security by their hopeless approach to the management of our procurement programs and their hopeless waste and mismanagement. (Time expired)

Brendan Nelson (Bradfield, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

Firstly—and I have said it in the House myself—the security and protection of Australia, its people, interests and values are our highest priorities. There is no question of that, and there are two things that are required in order to do it. Firstly, you need political will: you need to have a government that believes in defence and security. Secondly, you have to have very strong economic management and to have your nation in a position where it is able to invest in the defence that is considered to be necessary to achieve the outcomes that we have.

In the 21st century, the first thing that needs to be said about defence and equipping our country with people and equipment is that what is most going to shape our future is not necessarily what we know but the things that we do not know. Our strategic planning for defence is indeed well developed. It was set out in the 2000 white paper and, as the member for Hunter has pointed out, we had one update in 2003 and another in 2005. I have also foreshadowed that throughout this year we will be—and in fact already are—examining how we will go forward to the end of this decade. Our priorities are obviously the protection and the security of our borders; we want to ensure that our gas and oil platforms are protected; we want to ensure that people who arrive here do so lawfully; and we also want to ensure that people do not arrive here and steal our fish. Five hundred Australian men and women, principally in the Navy and the Air Force, are working every day on this on our behalf.

In our planning we are also very focused on our region, particularly the ‘arc of instability’—a term that was coined by Paul Dibb and to which the member for Hunter referred—which takes us from East Timor through to the south-west Pacific. We have recognised that we are going to have to provide security and stabilisation, counterterrorism and maritime border protection, and also humanitarian support and relief in those countries for the foreseeable future. That, amongst many things, is why the government last year announced that we will invest a further $10 billion over the next 10 years in establishing two more battalions for the Australian Army, taking it from six to eight battalions.

But what we also recognise as equally important in defending our country is what happens in our region, not only South-East Asia but South Asia, Central Asia and throughout the world. We appreciate that, as we go forward, Australia, in providing defence and protection for our interests, is going to have to not only involve itself in counterterrorism, in intelligence and in working with our neighbours—Indonesia, Malaysia, Thailand, the Philippines and other countries—on counterterrorism, but also see that we nurture, nourish and support our alliances in conflicts which may well be in distant parts of the world. What happens in Afghanistan, what happens in the Middle East and the resolution eventually of the issues in Iraq have everything to do with the security of Australia. So, in terms of equipping Australia for the future, the government is extremely mindful of the fact that they are the kinds of challenges that we are facing.

We have heard from the member for Hunter. Most people are embarrassed to not know what they are talking about; it is even less common to have people boast about it, which is essentially what the member for Hunter has done. In terms of procurement, the member for Hunter referred to the Australian Strategic Policy Institute. In the institute’s defence almanac, which publishes figures on defence expenditure, in the last 11 years of the Hawke and Keating Labor governments defence expenditure declined in real terms by two per cent. In contrast, in the first 11 years of this government, defence expenditure has increased by 48 per cent. I would also point out that the Labor Party solution of increasing defence expenditure as a proportion of GDP was to actually shrink the economy, and that is not something that this government is prepared to do under any circumstances.

In 2003 this government undertook major reforms of the way in which we acquire and sustain defence equipment. In the defence white paper in 2000, we set out forward expenditure over this decade of an additional $28 billion. We also took Labor’s combat-ready troops from 42 per cent to 62 per cent. We have shifted about $900 million from the back end of defence operations to the front end of it—so-called ‘tail to teeth’. There have also been changes in defence procurement and the way that we buy our equipment. Malcolm Kinnaird and some leading businessmen and businesswomen provided us with advice on how we can better equip our Defence Force.

Since those reforms were introduced, with the Defence Materiel Organisation, the DMO, being a prescribed agency, we have over the last three years been managing about 230 projects. In fact Defence at the moment has $60 billion worth of projects on its books for acquisition and about $40 billion for sustainment or maintenance. In the three years from July 2003, 93 projects have been closed—51 of those projects have come in early and ahead of budget, saving the taxpayer some $95 million; and we have had 10 projects that have come in late, with a real cost increase totalling $131 million.

At the moment the performance of the Defence Materiel Organisation is such that over last three years the delays or slippages in projects have declined from 20 per cent to 25 per cent in 2003-04, and from 15 per cent to 20 per cent in 2005-06; and they are currently running at 10 per cent to 13 per cent. So the so-called figure of $14 billion actually relates to taking 13 or 14 per cent of a total of $100 billion of projects under management and sustainment.

It needs to be pointed out that private sector industry best practice is somewhere between eight and 10 per cent. Of course, in defence equipment we are not just talking about going down to the local Holden dealership and buying a car; we are talking about state-of-the-art defence capability and weaponry which needs to be used in some of the most extreme conditions we could possibly know. In fact, I point out to the House the article by Professor Henry Ergas, the Asia-Pacific head of the economic consultancy, CRA International, published in the Financial Review on 9 February this year. In relation to the so-called public debate on these issues, he said:

For one thing, they ignore the many successes—such as the continuing timely delivery of the new Abrams tanks for the army and the recent ahead-of-schedule delivery of a new fleet oiler for the Navy: good news is no news when it comes to defence projects.

He went on to say:

But the real problem is there is little or no appreciation of the complexities and subtleties entailed in defence procurement.

Buying advanced weapons systems is not like buying laundry soap or paper clips ... Contemporary weapons systems are among the largest and most sophisticated engineering projects our societies undertake, involving millions of interdependent parts, each technically demanding in its own right and then needing to inter-operate effectively and reliably under combat conditions.

It also should be pointed out that if you go to something which is still complex but much less complex than trying to buy, for example, a new joint strike fighter to last this country generations in terms of its air capability, road projects, on average, come in 15 per cent over budget. Of software projects in the corporate sector, 84 per cent are delivered either late or over budget and 50 per cent are abandoned altogether. Compare that with the fact that you have 20 million software code lines in a joint strike fighter. Further to that, 40 per cent of rail projects, according to research, come in over price and 50 per cent are subsequently underutilised. So, in that sense, comparing the intensity and the complexity of defence procurement with other things that happen in the private sector, I think Australia, particularly in the last five years, has been performing extremely well.

There are a couple of other things that the member for Hunter mentioned which I will just point out. Firstly, the new air combat capability is something that we as a nation need and must get right. The aircraft that we purchased to protect our airspace and to maintain control of airspace is one that will be required to last a generation. In 1991 the Royal Australian Air Force, through the defence organisation, solicited interest from manufacturers who make aircraft to have a look at the kind of aircraft that might be suitable for Australia. In 2002, the decision was made that the joint strike fighter was the correct aircraft for Australia. The new air combat capability is not just about acquiring about 100 joint strike fighters. This country needs about 100 aircraft and can afford to purchase, maintain and sustain for about a 30-year period a state-of-the-art aircraft capability.

It also depends on a number of other things. We have magnificent F111s, which we have been flying for 35 years. The risk of continuing to fly them beyond 2010 will escalate considerably and certainly, from 2012, unacceptably. Of course, there is also a cost associated with that in terms of the capability that these aircraft provide to us in the 21st century. It also requires the upgrade of our current FA18 Hornets, and the government is committed to that to ensure that those Hornets are able to keep flying throughout the next decade and meet and exceed the expectations upon them over the next decade. It also requires the acquisition of the airborne early warning commander control aircraft, the so-called Wedgetails, and the acquisition of refuelers and a ground based commander control system for air warfare.

The government made the decision to acquire a squadron of Super Hornets and to maintain them for the next decade, to ensure that under no circumstances the risk, which would be clearly unacceptable, of an air gap emerging in the early part of the next decade would not be covered. Not only was the government determined to see that that is the case; the Super Hornet, the FA18F, is a 4.5 generation aircraft. It will certainly more than exceed the requirements for Australia’s air combat capability, along with upgraded FA18s, over the next decade. It derisks the transition into the joint strike fighter. It is also an acquisition which Australia can afford because of the hard work of Australians and the very good economic management of this government over the last 10 years.

I might also point out that the reason we are having this is that the Labor Party does not support defence and does not support spending on it. The Australian National University survey of the Labor candidates conducted for the last federal election found that, whereas not one single Liberal Party or National Party candidate supported a reduction in defence expenditure, one in four Labor candidates did. I might also point out that in 1994, after 11 years in government, the Australian Defence Association made its assessment of Labor in government looking after defence. It said in part:

The number of full-time equivalent military personnel has been cut by almost 13 per cent, while regular force numbers were down 15.9 per cent. New equipment programs had been deferred and the then executive director, Mr O’Connor, said that the Australian Defence Force was being reduced to a ‘care and maintenance organisation as it had been in the thirties’. It is now incapable of meeting sustained low level commitments even at the level of non-violent UN peacekeeping tasks.

It went on to provide Labor’s scoresheet on defence as saying:

The ADF is simply unable to support the government’s foreign policy in Asia, much less being able to defend Australia. The ADF is just one more major national asset that was being sold off by the then government.

This government delivered a white paper in 2000. We are well in excess of the $28 billion. We said we would spend more on defence in the decade we are now going through. In the last 14 months the government has announced that an additional $30 billion or more will be spent on Australian troops, Navy and Air Force personnel and their equipment over the next 10 years to provide them with the equipment they need and deserve and to increase the size of the Australian Army.

In 1987 the Labor Party produced a white paper and said it was going to have a three per cent real growth in funding. Then, over the next three years, it cut the funding to defence. The reasons it did so are, firstly, the Labor Party does not support investment in defence and, secondly, the Labor Party was giving this country the recession that we were told by the then Treasurer, who became Prime Minister, we apparently all had to have.

The important thing is that Australian defence expenditure is on a solid footing. We have a 10-year plan, and it is rather extraordinary to have an opposition that criticises the government for spending more on defence than it forecast at the start of the decade—in a decade which has seen the most heinous terrorist and other attacks not only in the United States of America but also in Afghanistan, throughout the Middle East and in our own region. I think Australians will think very long and hard before they—(Time expired)

Alan Griffin (Bruce, Australian Labor Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

This government has had 11 long years to get control of the defence budget and project management—and it has failed miserably. Minister Nelson is the latest in a long list of defence ministers in this government who have not been able to do the job. He has wrapped himself in the flag and been available for photo opportunities but, at the end of the day, he has been happy to ignore proper procurement guidelines and make fast and loose announcements regarding the defence of this country.

The bottom line in this issue is that it is indicative of the circumstances facing the Howard government in a range of areas. It has grown stale, it is out of energy, it is not sure what it is really doing, but it has a cheque book and it splays it around. The point with defence expenditure is that we have to make sure that it is the right expenditure. We have to make sure that it meets our strategic needs into the future and the capability we require for the defence of our country.

The Minister for Defence—a man whom I have a good deal of time for in many respects—is often known around the place as ‘Rain Man’. We saw once again today his capacity to spit out statistics on a whole range of aspects which, I might add, were more about the past than the future.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

He didn’t answer any questions!

Alan Griffin (Bruce, Australian Labor Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

He certainly did not answer any questions. But I have some statistics for him too. They are statistics that really spell out what has been happening in defence procurement in this country and statistics which he, once again, was not able to deal with on this occasion.

According to figures released by the Department of Defence on 13 March this year, 58 defence projects are behind schedule. Thirty of them are over one year behind and 11 are six to 12 months late—that is, 28 per cent of defence projects are in arrears, and we are talking about very big money. The poor management of these projects has implications not only for our capability but also for proper expenditure in this very important aspect of government endeavour.

I will give the parliament an idea of a number of the major projects that we are talking about. The airborne early warning control aircraft, Project Wedgetail, were due in 2006. They are now expected in approximately 2009, a delay of in excess of two years. The original cost was expected to be over $1,000 million. Now the cost is estimated at $3.5 billion. The Tiger helicopter project was due in 2006. It is now expected in 2008, a delay of two years. The original cost was over $1,000 million. It is now estimated at $2 billion. The ADF air refuelling capability was due in 2002. Now it is due in December 2009, a delay of seven years. Its original cost was between $500 million and $1,000 million. Its expected cost is now $1,761 million.

The FA18 Hornet upgrade was due in 2003. It is now expected in December 2007, a delay of four years. Its original cost was between $500 million and $1,000 million. It is now estimated at $1.5 billion. The FG frigate upgrade was due in 2003. It is now expected in 2009, a delay of six years. Its original cost was between $500 million to $1,000 million for six ships. It is now estimated at $1.5 billion for four ships. The high frequency radio communications modernisation project was due in 2002. It is now expected in 2007, a delay of five years. That one, we accept, is within cost, but with five years of missing capability.

The anti-ship missile defence project was due in 2005. It is now expected in 2009, a delay of four years. That, too, is within cost. The new heavyweight torpedo was due in 2004. The expected due date is now 2010, a delay of six years. Its original cost was $250 million. It is now estimated at $430 million. The Seasprites, which the member for Hunter spoke about earlier, were due in 2003. They are now expected, we hope, in 2008, a delay of five years. Their original cost was between $200 million and $500 million. It is now estimated at $1 billion and, as we know, they are in some doubt.

The M113 armoured personnel carrier minimum upgrade was due in 2003. It is now expected in 2007-08, a delay of four years. Its original cost was between $200 million and $500 million. It is now expected to be $0.6 billion. The new air defence command and control system were due in 2007. They are now expected in 2009, a delay of two years. So what we see is a litany of projects—serious projects—that are mostly over cost, sometimes by factors that are quite mind-boggling. We certainly have a situation which has real implications for the defence of our country and where there are issues that have not been addressed by the minister in his job in this government and in respect of what they are doing in defence.

Much has been said about the Super Hornets. I will say a couple of brief things about them. The minister talked about how, when you are looking at the issue of procurement, you are in a complex situation. And there is no doubt that defence procurement is a very complex area. But, if it is so complex—and I agree that it is—you would think that you would go through proper processes. You would think that you would have to ensure that you did.

But what do we see here? We see the minister, almost overnight, spending $6 billion in order to go through with this purchase. Where was the process here? The member for Hunter asked that question specifically of the Minister for Defence, and the Minister for Defence ignored it. He did not answer it. In the short time he will have available, the next speaker might like to address that issue. These are complex purchases, they are important purchases, and we know the minister did not go through a proper process to ensure that this purchase was done correctly and that the correct decision was made. We also know that, based on the amount of criticism. The minister can say that we are not experts on defence but we can also say, frankly, neither is he. In the circumstances, we see in this field a number of independent commentators publicly criticising decisions that have been taken by this government in recent times. Hugh White, writing in today’s Sydney Morning Herald, said:

We do not know why the F-18F was chosen as the best aircraft for the job or why buying it without a competitive tender was the best way to acquire it. It is pretty clear that the idea was first raised at a National Security Committee meeting in November last year, when Defence Minister Brendan Nelson threw it on the table out of the blue. One wonders who provided the material for the briefing that Nelson then gave his NSC colleagues. Three months later, with time out for Christmas, the deal was done—a triumph of salesmanship over strategy.

Mr Tom Burbage, Executive Vice-President of Lockheed Martin’s JSF program, was quoted in the Canberra Times about his view on the Super Hornet. He said:

It’s not the airplane you want to hang your future on if you want to have an effective coalition airplane and you want to be effective nationally in a threat environment 10 to 15 years down the road.

Retired Air Vice-Marshal Peter Criss, writing in the Sydney Morning Herald, said:

Certainly, with the Super Hornet carrying half of some of the weapons, half the distance, at half the speed of the aircraft it is replacing, one has to hope and pray that the minister has not been misled. Worse still, we must wonder whether he has gone off prematurely without ensuring the rigorous engineering and operational evaluation process that is so essential to justifying spending $6 billion has been scrupulously followed and all options carefully and fairly evaluated.

He also said:

… the Super Hornet is inferior to the 1970s-designed and 1980s-built original F/A-18 aircraft. Admittedly the Block II Super Hornet has a new radar and some electronic components not in the version Coyle gave evidence on, but the fundamental airframe and performance remain unaltered: it is heavier, slower, larger and uglier (its radar signature did not measure up to expectations) than the normal Hornet.

There is certainly one thing that is a lot faster than a Super Hornet—that is, the process followed by the minister to seek approval by cabinet for a $6 billion purchase. In terms of the future, that raises real questions. The issue of the Seasprite has been covered by previous speakers, but I will briefly mention a couple of points. Let’s not forget that the New Zealanders themselves took up the Seasprite option, but they adjusted it. They did not go over the top in terms of capability requirements. Their Seasprites have been in operation for quite some time, and I understand that is also the case with the Egyptians. There are issues there around how this government has handled those capability matters.

I wish to make one final point with respect to public scrutiny of what this government has done on defence. Parliament is about to break for some six weeks or so. We know that the government is considering a further deployment to Afghanistan, a deployment which Labor support, yet we have had no statement at all from this minister or the Prime Minister about the nature of that deployment. I think that shows, once again, how little they care about this parliament and about consulting with the Australian people through the forums that are supposed to be utilised in this parliament. (Time expired)

David Fawcett (Wakefield, Liberal Party) Share this | Link to this | Hansard source

I rise to address the matter of public importance which has been raised by the opposition. I note that my time will be limited to about four minutes, which is unfortunate, because the opposition have done their research well in the newspapers; it is a shame they have not done their research well on things such as the Defence Capability Development Manual 2006, which outlines the processes by which the defence department and the government work together on major capability acquisition.

One of the key criticisms in the MPI is the budget, and I would like to address the budget, as well as the process, for the benefit of the House. The opposition talk about mismanagement of the budget. But to put it in some context, under this government we see a commitment to a three per cent growth in the budget, which has enabled us to increase real spending on defence, increase the size of the Defence Force to meet our current needs, as opposed to what the opposition did in government where they decreased defence on a number of occasions from 68,000 people to 50,000. In fact, in the Defence Efficiency Review of 1997 it was even purported to go down to 42,500 full-time personnel. Currently, the budget is around $19.6 billion, with additional funding for current operations, as well as funding for capability needs to be identified, such as the C17 to meet the very real need to transport groups of ADF personnel to operations.

Members opposite also talk about projects and they refer to the fact that projects are delayed. I am disappointed to see their focus on that negative aspect. They obviously do not compare similar capabilities in the industry sector—for example, the A380, which is also late by a number of years and has nothing to do with defence planning—nor do they overlay the complexity of the integrated systems in defence aircraft. If we look at things like the Apache Longbow Program in the UK and similar programs around the world we see that our Defence Force actually compares very well to both industry and other defence forces.

Finally, in terms of the capability, development and procurement process, it is interesting to note that the key principles that underpin the Defence Capability Development Manual not only look at the longer term planning process but also look at flexibility. It states in there:

Notwithstanding the usually long-range view that is needed for effective capability planning, the capability development system also needs the agility to respond to short notice change in the operational and strategic environment by reordering capability development priorities and by rapid acquisition to fill newly revealed gaps. The core role of that organisation is to make sure that a thorough analysis is done of options so that government has the ability to respond in a timely manner to threats and opportunities that arise.

So it is quite false of the opposition to claim that defence has essentially been cut out of this process and that the minister has made a decision on his own. The whole defence planning process—whether you are talking about the joint military appreciation process that informs tactical and operational activities or whether you are talking about the procurement process—is around analysis of information that provides information for government to make timely decisions to meet opportunities or threats.

There are many other things that I would like to speak of on this bill but, in the remaining one minute, I think it is important to point out Australia’s ability to maintain a balanced force structure which gives us options to defend Australia, to have forward operations in our immediate region or to work in collaboration with partners in other parts of the world. The future security of Australia comes down to the fact that this government has strong economic management which enables us to restore the size of the Australian Defence Force to one which is operationally capable, as well as fund its operations for the benefit of Australia.

Debate interrupted.