Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

I rise to lend some comment from the coalition on the Customs Amendment (Military End-Use) Bill, noting, of course, that the Defence Trade Controls Bill 2011 and the Customs Amendment (Military End-Use) Bill 2011 are being debated cognately. We are now at the end of a road that we have journeyed down for a number of years. The coalition began the process of creating 'trusted communities', whereby Australian and US companies can trade defence equipment without the need for ostensible export licences. Indeed, the former Prime Minister, the Hon. John Howard AC, and the former President, George W Bush, signed the Treaty Between the Government of Australia and the Government of the United States of America Concerning Defence Trade Cooperation in Sydney on 5 September 2007. The Rudd government signed off on the subsequent implementation arrangements on 14 March 2008. We then waited for the US congress to pass implementation legislation at the end of September 2010. Then the Senate ratified the treaty on the following day, 29 September. The intent of the treaty is to permit the licence-free export of defence goods and services, provided, of course, they meet security and regulatory requirements between the Australian and US governments and between Australian and US companies.

Currently, Australian companies that need access to defence items or technologies in the US need an export licence from the US Department of State. This is to comply with the International Traffic in Arms Regulations, or ITAR, system. The existing export control regime, however, has focused on exports of tangible, physical, tactile goods. The growth of technology, especially computer and software technology, has meant that many defence export services can be provided literally over the net or through a range of brokers. These are not captured easily within existing controls. It is therefore argued that there are currently gaps in Australia's existing defence export controls. Those gaps exist in terms of internal or intangible transfer of technology; provision of services relating to defence and strategic goods and technology; the brokering of the supply of these goods, technologies and related services; and the exportation of goods intended for military end use that may prejudice Australia's security, defence or international relations.

The Defence Trade Controls Bill 2011, therefore, is designed to strengthen the defence export controls and to implement a treaty and provide the framework around the treaty between Australia and the United States of America. More specifically, the bill will establish and manage the 'trusted Australian community'. It will define membership requirements of this community. It will define offences for individuals and companies who fail to comply with their treaty obligations. It will establish monitoring powers and record-keeping requirements.

This process was begun by the coalition as it saw a desperate need to cut red tape, to simplify processes for sharing equipment, information technology and the like between Australian and US defence companies and to deliver new opportunities for Australia's defence industry to work closely with US industry, especially on sensitive defence technology projects. The coalition is fairly proud of the initiative. It sits in well with what the coalition is all about—boosting exports, boosting jobs, cutting red tape, helping companies enter global supply chain contracts, supporting jobs and providing a longer term stability for the Australian defence industry. It was after all the coalition that committed, year on year, to over 30 first- and second-pass approvals through the National Security Committee of Cabinet so that the Defence Cooperation Plan, the DCP, could be taken to a banker. The DCP outlined exactly when Defence would look to procure goods and services, and defence industry were able to plan their R&D, their financing and their people strategies around it. When Labor came to power, the DCP was cut from 10 years to four years. But now it is back again, as Labor have acknowledged the egregiousness of their mistake. Yet, in place of the 33 first- and second-pass approvals granted by the coalition, last year we were down nine—and in the previous year there were not too many more than that. Fourteen billion dollars worth of defence industry and defence projects have been pushed to the never-never. This is the Labor government's current track record on defence industry, so it is little wonder that they are lauding this particular bill and what has happened with defence industry as a result of it. But let this parliament be in no doubt: the process of cooperation began with the coalition, and my best guess is that when all is finally said and done it will be the coalition who will implement it sensibly and seriously to the very end.

The coalition also saw the need to speed up delivery of the next generation of defence technology through improved military-industrial collaboration, the coalition saw the need for further enhancement of interoperability between Australia and the US, and the coalition saw the need to ensure that the ADF continues to enjoy access to cutting-edge capabilities in the future. We believe that the intent and the spirit of this treaty reflect a significant trade and industrial cooperation between Australia and the US. We believe it will complement the ANZUS treaty and complement our close intelligence cooperation and the current free-trade agreement, and it is made possible by the unprecedented closeness of our alliance with the US.

The coalition are therefore wholly supportive of the intent of this legislation and broadly supportive of the direction in which the legislation is going. We do have a range of concerns, and these have been confirmed through a range of industry consultations. One concern is about the fact that Australia and the US signed the treaty without a regulation impact statement having been made. That is not surprising, considering that regulation impact statements are becoming very short and sweet—or, indeed, non-existent—in most legislation this government is putting through. Their approach is a far cry from their 2007 mantra that there would be a regulation impact statement for everything the government did and that they would do nothing without a cost-benefit analysis. The problem is that there is no cost-benefit analysis for this bill. Neither is there a cost-benefit analysis for the $43 billion NBN, but we digress when we begin to talk of one of the largest expenses in Australian history, which this government is undertaking without a cost-benefit analysis and in direct contravention of its 2007 policy. Why make some sort of comment about its integrity in the 2007 election? We will just move on from that little blip.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Yes, I think you should.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

Although a regulation impact statement is not required under the treaty, in the bill there is an RIS which focuses more on examining proposals to implement a strengthening of the existing defence export controls. Indeed, the explanatory memorandum notes:

The RIS concludes that the proposal to strengthen Australia’s export controls will impose some additional regulation burden on the export of defence and strategic goods, technology and related services …

During the coalition's consultation with industry, concerns were raised about the role of the US State Department in approving Australian companies or individuals as trusted members of the Australian community. Industry was concerned that the process of gaining such approval might be cumbersome, costly and time-consuming, with no right of appeal. We share this concern. To date we have received nothing that would ameliorate this concern, and it was confirmed for the coalition when it was briefed by the Department of Defence, who also expressed that work was still required in this area. We look forward to seeing the work required in this area and to getting a feel for the cost, the time, the work and the right of appeal involved in the process. These issues will be a major focus of the proposed examination of the bill by the Senate Foreign Affairs, Defence and Trade Legislation Committee.

Coupled with this concern is the lack of confidence within the defence industry in the consistency of decisions made by the Defence Export Control Office about what strategic goods can or cannot be exported. I also have concerns that DECO's replacement IT system will not be operational in time for the commencement of the legislation. Questions on notice to which the government responded on 22 August 2011 said that the government was unable to provide the cost of this system and that the government was unable to provide the cost of running the new system. The government suggested that the new IT system would be operational in the first half of 2012. Well, if this government's ability for implementing IT systems is the same as the Labor government in Queensland's ability for IT systems, especially in health, I suggest we will be waiting an incredibly long time. The government's response to the questions on notice gives the coalition no confidence at all that the IT system which will support the implementation of the treaty is on track, or the boundaries, the costs and the time are known. There has been no indication given on whether or not a contract has been awarded, who to, or when the new system will actually be delivered. According to the government, the old system is terribly outdated, which begs the question: why has it now taken four years to implement a new system when this process started with the signing of the treaty in September 2007? And here we are with the government still unable to provide the opposition with basic questions, in terms of projects, of cost and time. I can only urge the government and urge the minister to take the issue a little more seriously, given Labor's track record in so many projects they have sought to implement.

I have also spoken to the minister with respect to the regulations that underpin the legislation. The legislation is in many respects a coathanger legislation, with much of the grunt work being done through the regulations. The minister has acknowledged that the regulations currently have not been drafted, and there is no regulation to provide to the opposition to understand the full gamut of what is being proposed. He has agreed, of course, that the regulations, when drafted, will be staffed out for comment and the coalition will have an opportunity then. But, of course, the staffing of the regulations will occur after the bill has passed the parliament. So we look forward to seeing the regulations and reserve our right to seek to strike them down if they do not meet the intent of what the minister has brought forward with respect to the bill.

With respect to the Customs Amendment (Military End-Use) Bill 2011, it of course is tied tightly to the Defence Trade Controls Bill 2011. Its purpose is to amend the Customs Act to include a power to prohibit the export of non-regulated goods that may contribute to a military end-use that may prejudice Australia's security, defence or international relations. The bill will implement the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation, which of course was started in September 2007. The power to be included in the new section 112BA of the Customs Act will enable the Minister for Defence to prohibit the export of specified, non-regulated goods to a particular place or person. In exercising this power, the Minister for Defence must suspect the goods would or may be used for a military end-use that may prejudice Australia's security, defence or international relations. Where the minister forms such a suspicion, the minister may issue a prohibition notice preventing the export.

Under the new subsection 112E(13) goods are or may be for a military end-use if the goods are or may be for use in operations, exercise or other activities conducted by an armed force or an armed group, whether or not that force or group forms part of the forces of the government of a foreign country. These provisions are being included in the Customs Act to reinforce our export controls by providing authority for intervention at the border of goods not otherwise regulated but nonetheless potentially being exported for military end-use contrary to our national interest. In other words, and quite simply, the bill will increase our compliance with regard to the export of not only military equipment but also non-tangible items such as services and intellectual property.

The treaty is widely held up to provide substantial benefits for defence. We will continue to hold the government accountable to ensure it achieves this stated aim. The intent is that it will improve commercial opportunities for Australian defence industry; that it will create a comprehensive framework for the two-way trade in certain defence articles required for specific end users, projects, research programs and operations; and that it will remove the need for export licences within an approved community of government facilities and private companies in Australia and the US. The minister has stated in conversation that costs associated with onerous security requirements will be met by the government. I look forward to seeing this in action. We remain strongly committed to local defence industry. We support the bills. We will have them referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee upon reaching the Senate, to ensure that the issues I have outlined are discussed and examined and that the concerns are properly dealt with. I look forward to the Senate response and, more importantly, I look forward to the government quickly releasing the regulations so the entirety of what is being considered can be examined in greater depth.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to speak on the Defence Trade Controls Bill 2011. As the Minister for Defence Materiel indicated in his second reading speech to the House, the legislation seeks to achieve some extremely important outcomes, notably helping strengthen our alliance with the US and the relationship between our defence industries; improving interoperability of the Australian and US armed forces; helping deliver equipment to our troops faster and cheaper; providing opportunities for the defence industry to win work in the US defence market; and enhancing Australia's defence export controls to bring them into line with international best practice.

The primary path to achieving these outcomes flows from the implementation of a treaty signed four years ago between the Australian and US governments. In the interests of precision, the title of the treaty is the Treaty between the Government of Australia and the Government of the United States of America concerning Defense Trade Cooperation. This helps provide a tremendously useful platform from which to lift two-way trade in defence items between what are known as trusted communities and without relying continually on export licences. While the treaty was signed four years ago, it has obviously taken time for the parliaments of our respective nations to ratify the document and for it to go through their respective parliaments. It was only in September last year that the US Senate recommended ratification of the treaty. What stands out for me within these arrangements announced by the minister are three points. Firstly, it cuts bureaucracy and red tape impacting on local Australian defence industry operators, seeking to lift the amount of work and services they can undertake for the US. Secondly, in doing this it will also ensure that existing legislative export control measures are strengthened. But ultimately the biggest benefit will be the way it lifts defence cooperation between our two countries.

We have had great reason to celebrate this cooperation in the previous week, with the visit of the President of the United States in this year, the 60th anniversary of the signing of the ANZUS Treaty. But we strengthen our commitment together year in year out in a number of ways. For example, it is worth noting that around half of Australia's war-fighting assets are sourced from the US and, on top of this, we are looking to replace or upgrade up to 85 per cent of our military equipment over the next 15 years. So there is a great degree of work happening between our two countries, and there is scope for more.

It has been recognised for many years now that Australian industry has played an important role in helping the ADF meet its critical objectives for this country. In fact about 20 years ago my predecessor in this place spearheaded a landmark review into defence industry policy, which he released in November 1992. I tracked it down in the Parliamentary Library. In that work, Defence policy and industry: report to the Minister for Defence, then Parliamentary Secretary Price likened the defence industry, in its support of Australia's Army, Navy and Air Force, to the important fourth arm of our country's defence. At that point in the report he noted that the level of Australian industry involvement in major capital equipment projects within defence under the Hawke-Keating government had almost trebled from about $476 million to $1.4 billion. It was a tremendous reflection on the confidence in the capacity and capability of our local defence industry, and that confidence continues today.

Take, for example, our budget for sustainment, where our spend is set to grow from around $5.3 billion this financial year to over $6.1 billion in 2014-15. Around 70 per cent of that figure will be spent right here in Australia strengthening employment, fuelling scope for innovation, providing commercial benefit for local industry. It is worth noting that a strong defence industry here that is providing and fuelling that innovation in the commercialisation phase, and looking for ways to provide new product, goods and services, spreads to the broader economy, with equipment that may have had in its genesis a defence intent then being used for other commercial purposes. Within the scope of this bill, there are obviously particular protections in terms of the use of technology, but I take this opportunity to reflect on the fact that defence industry suppliers here, through their work within the sector, have enormous opportunity to then provide other goods and services that will spread into the broader economy.

Talking of sustainment, just this year the government announced details of some significant projects—a $100 million contract with General Dynamics Land Systems-Australia to maintain the Abrams tanks and ASLAVs; a $300 million contract extension with BAE Systems Australia and Lockheed Martin to maintain the Jindalee Operational Radar Network; a $70 million contract with Raytheon Australia to maintain tactical data radio systems; and a $20 million contract with CAE Australia to provide training for aircrew on our air-to-air refuelling aircraft. Recently, Minister Clare announced the release of a $300 million tender for the first of Navy's group maintenance contracts. These contracts are being provided to companies that are doing some really fantastic work. For example, an Australian company that has been successful in the US defence markets is shipbuilder Austal. Austal built the Navy's current Armidale class patrol boats based in Darwin. The company is based in Western Australia but has set up operations in the US to build a shipyard in Mobile, Alabama. It has a $1.6 billion contract to build 10 Littoral combat ships for the US Navy. The contract was awarded in November 2008.

The government is also helping defence companies access global markets through the Global Supply Chain Program. Around $400 million in contracts have been awarded to Australian defence industry suppliers through the Global Supply Chain Program, and 90 per cent of that money has gone to Australian SMEs. This is a tremendous mark of confidence in our local industry. These are big projects and major opportunities. They are a demonstration of our belief in the great capacity and value of local industry.

While we have a vibrant local industry with work to sustain and grow its capabilities, we can also look for improvement. The bill before the House seeks to do just that. Currently, when Australian companies need to access defence items or technologies from the US, they have to apply for an export licence from the US Department of State in accordance with what is known as the ITAR—International Traffic in Arms Regulations—system. No-one would doubt that ITAR is critical for a range of important reasons, but the current arrangements can be improved, and that is what is being proposed. The legislation tackles the need for individual licences to be mandatory for each individual export application. One can easily appreciate that having to regularly apply for individual licences adds up in cost and adds up in time. Under what is being proposed here, the treaty will lift the requirement for individual licences and provide for licence-free movement of eligible defence articles within what will become known as 'approved Australian-US communities'. These communities will consist of government agencies, companies approved as community members and their eligible employees. An approval of an applicant for membership of the Australian community will involve the consideration of a range of factors, including, for example—and these are important—convictions for export control offences, the level of foreign ownership or control, and prejudice to security, defence or international relations for Australia.

For the ADF, the treaty will improve interoperability with US armed forces by way of sharing common equipment and spares during exercises and operations. There are benefits for Australian industries but they will, as I mentioned earlier, need to comply with security requirements to ensure the protection of technology, particularly US technology, that they access. Offences will also exist for community members who do not comply. So, while these are understandable, necessary measures, there are significant opportunities for what will become known as Australian community members, with considerable potential to access greater investment opportunities.

I also commend the government for the extensive consultation process with industry, from the biggest companies to the smallest firms whose innovation and know-how have seen them score significant work. That consultation process, managed by Ken Peacock AM, captured a range of views, including the requirement to help, for example, SMEs who are aiming to become approved community members. That was picked up in some of the work done here and it is reflected in this bill. These industries can certainly access opportunities.

I was particularly pleased to see that industry will be able to access better information on the goods that are within the scope of the treaty and that will help them plan and develop lead times for potential investment and procurement bids. This will also be backed up by our Department of Defence, which will be taking steps to ensure it can help companies comply. Finally, I commend the decision to waive any charges to industry for approvals, registrations or security clearances associated with the bill. I conclude on the point that, as much as we are freeing up red tape, we are taking seriously our responsibility to ensure that security provisions are put in place—requirements to be satisfied by an employee or contractor for Australian community membership, record-keeping compliance and reporting requirements—to ensure adequate oversight in that process. This bill will build on the solid legislative export control measures that exist. As the minister indicated in his second reading speech, these measures aim to ensure the responsible export of defence and strategic goods, and I wholeheartedly commend the bill to the House.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

The recent visit of President Obama to Australia demonstrated, and the President mentioned it in his speech to the House, that the relationship between our countries has never been stronger. This is a relationship that has been supported by both sides, and it is in that spirit that I rise today to speak on the Defence Trade Controls Bill 2011 and the Customs Amendment (Military End-Use) Bill 2011. The purpose of these bills is to implement a treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation. It is also important to remind the House that this year marks the 60th anniversary of the ANZUS alliance. This bill came about from a coalition initiative that came to fruition when Prime Minister John Howard and US President George W Bush signed the Australia-United States Treaty on Defence Trade Cooperation over four years ago. It might have taken some time, but I broadly welcome the government's decision to bring this legislation forward. It will bring Australia more into line with what Canada has had with the US for several decades now, namely, a special arrangement designed to remove any defence export restrictions on industrial cooperation. This is something that the US and Britain were also able to achieve in a treaty framework.

Although the treaty was signed in September 2007, it has not yet entered into force. It will come into effect once the domestic legislative requirements of both countries have been met. The coalition is responsible for additional parliamentary and Committee on Treaties procedural safeguards that will apply. We take our bilateral and multilateral treaty obligations very seriously, and we are keen that such international arrangements are made with full reviews of the obligation placed on us, including the economic, environmental, social and cultural effects of the proposed treaty; the obligations imposed by the treaty; how the treaty will be implemented domestically; the financial costs associated with implementing and complying with the terms of the treaty; and the consultations that occurred with state and territory governments, industry and community groups and other interested parties.

In respect of this particular agreement, the difficulty with the current setup is that there is need for licences at all stages, and each licence can take from three to 12 months for approval. Licences must be sought even for efforts involving cooperation between subsidiaries such as Raytheon Company based in the US and Raytheon Australia. This is an important feature of any serious export control regime because it prevents cut-out technology transfers. Nevertheless, it does get in the way of relationships between trustworthy allies. These difficulties within the existing arrangements manifest themselves in a number of ways. They even strike at the very initial stages of cooperation by creating huge hurdles and costs for any discussions and sharing of technical data to even begin exploring cooperation between Australian and American firms. They strike at the active cooperation stage by making full Australian participation in joint projects difficult, to say the least, because licensing slows down the process and makes it easier to select US partners instead. Finally, it gets in the way of transfers of US origin equipment and technical data, slowing down any effort to do more maintenance and sustainability work locally after Australia buys US equipment or upgrades what it has. The US congress agreed to pass a watered-down solution in 2004. It gave the UK and Australian export requests expedited status, which improved but did not fix the situation. US defence industry companies have also banded together on this issue to press for a change in export systems as a whole.

Under this treaty, US exporters working with firms in the 'approved community of companies' can forgo the licensing requirement and just advise the US Department of State that they have engaged in an eligible defence export activity with Australia.

Eligible exports will include exports for: mutually determined security and defence projects where the Commonwealth of Australia is the end user, which will not include the F35, since that is a multinational project with its own agreements; cooperative security and defence research, development, production and support programs; and combined military or counterterrorism operations.

A compliance and audit regime, whose details must still be determined, will be set up to monitor the agreement. This will include accreditation standards for 'approved community' status, covering issues like facility clearance, business history, export licensing and compliance record and relationships to countries of concern. Australian companies that are not a part of the approved community will still be able to use existing US export control arrangements. ITAR et al will also apply to any highly sensitive exports, still to be mutually determined, that are not covered by the treaty. Once in force, the treaty will create a framework for two-way, licence-free trade in certain defence articles between Australia and US members of the approved community. The approved community will include government agencies and private companies in both countries.

The potential benefits of the treaty include: reduced time delivery for new defence projects; improved sustainment by permitting transfers within the approved community without further US approvals; improved business opportunities by permitting Australian and US companies to share technical data without licences; and a greater opportunity for Australian companies to tender for US contracts. That, in particular, is one area I want to focus on and that I will come to later in my speech.

Under the treaty, Australian companies will avoid having to seek US government approval for each transaction. The treaty will remove administrative delays associated with the existing Australia-US export licensing system, while ensuring that sensitive defence technology is appropriately protected. Australian defence companies will be able to apply to become members of the approved community. The approved community allows government agencies and private companies in both countries to trade in defence articles without the administrative delays caused by US and Australian export controls. Applying for membership in the approved community will be a voluntary commercial decision. Those that choose not to join the treaty will continue to operate within existing Australian and US defence export controls.

To qualify for membership, companies must be accepted and must comply with security standards, marking and handling requirements, and regular audit and compliance obligations. Entry into the Australian approved community will be a commercial cost-benefit decision for individual companies, based on the level of business a company is likely to undertake with the US government or with US defence companies. Implementation costs to individual companies will vary depending on the level of access to treaty articles and the level of security they currently have in place.

The Defence Trade Cooperation Treaty is a significant step towards cooperation between the Australia and the US defence industry. In December 2010, the Defence Export Control Office, DECO, conducted consultation sessions with industry in each state and territory. DECO has continued to engage with industry throughout 2011.

The opposition wants the treaty to work as effectively as possible, the initial benefit being the provision of better access to US defence technology, while still maintaining assurances that it will be protected appropriately. However, in the future we hope our companies will be able to use the legislation and its simplified procedures to more efficiently export indigenous technology to the US.

Australia has the capacity to design and develop sophisticated defence technology. An example of that is the uniquely designed Nulka rocket-designed decoy missile, which takes antiship missiles away from their targets. It has already been fitted to more than 130 Australian, Canadian and United States warships and is probably one of Australia's most successful defence exports. Another example is the Bushmaster, the mine protected vehicle which does so much to protect our nation and other nations that are using them in Afghanistan by deflecting away the force from IEDs and other similar devices. I say this to the government: we have a unique technology, a design technology, and I am just amazed that this government has not sought more opportunity to sell the Bushmaster program into the US market. In fact, this government joined up and paid US$40 million to US companies to be a part of the JLTV program, a program now in trouble because it never met its design criteria. Yet Australian companies like Thales, who produce the Bushmaster, have also developed the Hawkeye, a smaller version which can comply with their technology. So what we need is a greater emphasis from this government in promoting Australian defence technologies into other markets and, in particular, the US market, which is a great procurer.

In my area of the Hunter Valley, defence industries provide many thousands of jobs. Forgacs, for example, has played a major role in the air warfare destroyer project, which was started in 2009. It will have built 14 of the 31 blocks that will make up the first ship, HMAS Hobart, and 13 of 31 blocks that will make up the second ship, HMAS Brisbane. The contracts won as part of this project in 2011 are worth $80 million and creates 200 more jobs for that company. Other Hunter companies which have capabilities to profit from defence contracts include BAE Systems, which only this year won a new three-year contract to provide vital usage monitoring services for the Royal Australian Air Force's FA18 Hornets. Under the contract they will gather, track and report fatigue related information about the Hornet's airframes and engines using an unique Australian developed, maintenance diagnostic and service life monitoring system.

There may be great opportunity to export that technology to other countries to help with their aspects of through-life systems and fatigue monitoring but, at the same time, we have the capability here in Australia and we should use that capability and that initiative to sell into other areas. In fact, the number of companies in the Hunter that do amazing work and are exporting already around the world, but are not able to penetrate the US market in any great way, are companies like C-E Solutions, who manage complex systems engineering, communication and defence projects; Cowan Manufacturing, who construct the most amazing recompression chambers which are fitted to warships throughout the world and in commercial operations; ATSA Defence Services, who specialise in the support of mine warfare underwater vehicles for the Royal Australian Navy; Puzzle Precision, who are an amazing company that develop low-level—in terms of production—but highly sophisticated circuit boards and, at times, one-off circuit boards for defence and related industries; Sisley Clothing, who manufacture the Nomex flight suits and other safety clothing; and, of course, GH Varley, who build a number of defence vehicles and are currently doing some specialised trayback modules for our new defence vehicles. Those companies are innovators. They are just some of the companies involved in defence industries in the Hunter. We have a spirit there of innovation and technology development. What is disappointing is that as they try to approach the US markets, it is all too hard. What we need—and I hope it comes as part of this work on this treaty—is greater access into the US defence systems for Australian technology.

If this legislation is passed, and I assume it will be because it has the support of the coalition, I want businesses in regions such as the Hunter, and small and medium enterprises in particular, to be able to use their expertise to take advantage of future export opportunities to create additional investment and, more importantly, jobs. It is in this spirit of implementation that more work needs to be done to realise the advantages to both the Australian and US governments. So the coalition will be keeping a close eye on how these regulations associated with this legislation are implemented to make sure they do not disadvantage Australian industry. As a part of this we welcome the consultation projects, which should not be just about informing industry but about providing an opportunity for those who will be affected by the arrangements to help shape how these measures will be applied in practice. Australia can ratify the treaty once this parliament has passed this bill and I would ask it to do so without unnecessary delays. This legislation also proposes to strengthen export controls in a number of areas, including brokering, intangible transfer of technology and the provision of services. These enhancements will ensure Australia's position is at the forefront of international best practice, and the passing of this legislation will allow the treaty to be enacted. It is anticipated that it will be introduced into parliament this year. Without any reservation we support this legislation. The legislation framework was commenced by the Howard government. I am glad to say the carriage of it has continued despite the delays in the US, and we ask that it be expedited as quickly as possible.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Defence Trade Controls Bill 2011 and the Customs Amendment (Military End-Use) Bill 2011. This comes about because of a treaty that was signed in September 2007, known as the Australia-US Treaty on Defence Trade Cooperation. I intend to deal with what the legislation has to say and then localise the issue and deal with the implications and the consequences for one particular Australian company and one particular platform, or what the Minister for Defence Materiel describes as one of Australia's war-fighting assets, the Super Hornet, 24 of which are located in my electorate of Blair at the RAAF base at Amberley.

Both of these pieces of legislation are important. The Department of Defence conducted a series of information sessions around Australia in December 2010, the first stage of stakeholder consultation. It is important that we improve our relationship and continue our cooperation with the US. As the member for Chifley pointed out, about 50 per cent of the assets that we use in the defence of our great island continent come from the United States and, according to the Minister for Defence Materiel, we anticipate increasing that to 85 per cent in the next few years as we continue to embed ourselves in our relationship with the US. It was a Labor Prime Minister, John Curtin, in the dark days of World War II who committed Australia, without fear or favour and with true dedication, resilience and commitment, to fight alongside American troops. Since that time we have fought in wars with the United States as our allies and we continue to do so in Afghanistan.

This is an important piece of legislation because it enhances the free trade cooperation between our countries and makes sure that our relationship is strengthened in certain defence contracts. As best as possible, it gets rid of bureaucracy and red tape and reduces delays. It removes the need for export licences within an approved community—which includes government defence organisations, the Department of Defence and private companies—of government facilities and private companies both in Australia and the United States, and that is important. We are committed as a matter of priority to all steps necessary in relation to this ratification. We think it is important. In fact, I notice that the Minister for Defence, the Minister for Foreign Affairs and the Minister for Trade released a joint media statement welcoming the treaty.

It was also discussed as recently as 2010 at the Australia-United States Ministerial Consultations, known as AUSMIN, and was mentioned in the 2010 joint communique of AUSMIN. So it is an important treaty and it has a long history, as previous speakers have said, going back four years, and creating a framework or an apparatus for a two-way trade cooperation between the United States and Australia between what are described as trusted communities without the need for export licences.

In March 2008 the implementing arrangement of the treaty was signed and tabled in parliament for consideration. It was looked at by the Joint Standing Committee on Treaties, and in September 2008 the committee recommended that the Australian government implement the treaty in domestic law. We are following that and I am pleased that the coalition is supporting it. In September last year the US Senate recommended the ratification of the treaty, and this was followed by the passage of the treaty through the US Congress on 28 September 2010.

As I said, what are described as the approved committees will consist of government agencies, companies approved as community members and their eligible employees. There is an opportunity for the community to opt in. I do not imagine that too many companies will opt out, particularly in view of the fact that this is an arrangement whereby they no longer have to apply for a licence to trade in certain defence related articles and technology to the United States. I cannot imagine that too many companies will want to opt out of that type of arrangement. There are, by virtue of the Defence Trade Controls Bill, some additional controls over defence related goods, technology and services, and this will implement our commitments as a member of the multilateral export control regime.

The second piece of legislation amends the Customs Act to include a power whereby the Minister for Defence can issue a notice to prohibit the export of specified non-regulatory goods to a particular place or person if that minister suspects the goods may be used for a military end use that would prejudice our national security, our defence or international relations. So that is a good piece of legislation as well. There are a number of issues that were raised during the stakeholder consultation, and the bill and the explanatory memorandum make that point. The consultation was led by Mr Ken Peacock AM, an experienced former CEO of a major defence company, as the minister said in his second reading speech.

This legislation is particularly important for my electorate of Blair, and particularly for companies that operate across major capital cities and provincial cities. I am privileged to have RAAF Base Amberley in my electorate. It is geographically right in the middle of the city of Ipswich, of which I represent about 70 per cent. All through my childhood growing up in Ipswich I lived next door to RAAF personnel, and there are literally thousands of people living in the Ipswich and West Moreton communities who were former members of the RAAF base and the Royal Australian Air Force.

The Royal Australian Air Force Base Amberley is also the location for a number of defence companies who have established themselves there to support the base. The base is not just a RAAF base these days, though it continues to be called RAAF Base Amberley. The 21st Construction Squadron is also there, as are the 9 FSB armed units of the Army, who played a role in Afghanistan as recently as this year and who continue to play a role in supporting our defence forces over there.

The RAAF base at Amberley was the home of the F111. The F111 was an aircraft beloved by the people not just of Australia but also of Ipswich. The dump and burn was a particular favourite in South-East Queensland. The iconic F111 was a familiar sight around the region. We relied on our international relations, with Defence contracting with American companies to provision it. It was an American aircraft originally; we came to love it in Australia and for 40 years it was on our skyline. I am pleased to say that we will have two retired F111 jets on display as part of the aircraft museum at RAAF Base Amberley.

The Australian Defence Force is of course a vital part of the Ipswich and Somerset communities which I represent and creates additional jobs on the base. The F111s have now been replaced, mothballed after 40 years of fine service. They were affectionately known as the flying pigs in the area, and people in the local area wore baseball caps to support them. We named our football teams and other sporting teams after them; we call our Rugby League team the Ipswich Jets and our basketball team the Ipswich Force. It was an indication of the extent to which the RAAF base is loved.

RAAF Base Amberley is now the home of 24 Super Hornets. The Super Hornets were built by Boeing at its production line in St Louis in Missouri. They were first flown by the US Navy in 2001. The Super Hornets give the Royal Australian Air Force the capability to conduct air-to-air combat, to strike targets on land and at sea and also to suppress enemy air defences and conduct reconnaissance. That is a point that was made by the Minister for Defence Materiel in a press release he issued jointly with me in July 2011 when we welcomed a fourth batch of the Super Hornets. The interesting thing about the Super Hornets is that there is the creation of 74 jobs at the RAAF base at Amberley for three years as a result of the sustainment contract with the Boeing company. Companies like Thales, Raytheon and Boeing are well known to members of this place in circumstances where there are Defence installations in their communities. The sustainment contract has been vital to the RAAF's fleet of Super Hornets and has been particularly important for the creation of jobs. At the RAAF base at Amberley we have an aerospace industry that is thriving and the base has grown magnificently and massively, to be honest with you, Mr Deputy Speaker. We have committed $2.5 billion for the entire fleet of Super Hornets, with 24 at the RAAF base at Amberley. We have committed $110.1 million for facilities to support the Super Hornet fleet and $331.5 million for the redevelopment works at RAAF base at Amberley in the last year or so. That is an indication of the tremendous commitment of this federal Labor government to the RAAF base at Amberley. These important platforms or assets like the Super Hornets will protect our air lines but will also enhance the economic development of South-East Queensland. It is commonly said that the RAAF base at Amberley brings in about $1 billion a year to the economy in the western corridor between Brisbane and Ipswich, and I can believe that, with thousands of personnel working on the RAAF base at Amberley.

In relation to the Super Hornets, it is important to note that the spare parts and other equipment necessary to keep these wonderful jets in the air come from the United States. The treaty that is the subject of the legislation here has the potential to make it easier for Boeing Defence Australia to get access to these materials, which are important for jobs and for timeliness in maintaining the capacity of the jets to be in the air. It will save the company time and money. The Super Hornets were delivered on time and on budget by this federal Labor government.

I have made the point that the Super Hornet sustainment contract is worth about $20 million per year and creates about 74 jobs at the RAAF base at Amberley. I said that I wanted to talk about the local aspects, and that is a perfect example of why this legislation is important in my community and in South-East Queensland. I dare say there are other members who could stand in this place and say similar things about how important this particular legislation is for particular assets which we have got from the United States and which are maintained by Australian companies or subsidiaries of United States companies. It is that localism and that financial impact in my community which brings me to the conclusion that this legislation is good not just for our nation but for the local community of the Ipswich and West Moreton area, and I support it.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Defence Trade Controls Bill 2011 and the related Customs Amendment (Military End-Use) Bill 2011. The purpose of the Defence Trade Controls Bill is to give effect to the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation. It will align Australia's export controls with international standards and deliver an administrative system to enhance existing defence export controls. The introduction of this bill into the Australian parliament has, as my colleagues have said, come at a significant time in Australia-US relations, with the US President, Barack Obama, visiting Australia last week, including visiting my electorate of Solomon. His visit also coincided with the 60th anniversary of the ANZUS alliance and the announcement that the US will boost its military presence in Darwin in my electorate.

By way of background, in September 2007 Prime Minister Howard signed the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation. Six months on, on 14 March 2008, the Rudd government signed off on the subsequent implementation arrangements. The implementing legislation was then passed by the US congress two years later, on 28 September 2010. Approval for the treaty was given the go-ahead a day later, on 29 September 2010, by the US Senate, and it was then signed off without the regulation impact statement because it was not required for the treaty bill provisions in the act. Instead there are regulation impact statements that deal with proposals to improve the existing defence export controls.

The main purpose of the Australia-US defence trade control treaty is the removal of certain agreed defence export restrictions between Australia and the US so that a more cost-effective and productive system can be facilitated between both countries. Under the current US export control system, international trade in arms regulation licenses are sought for every single trade transfer. The treaty will ease the restrictions associated with the current system by the creation of a comprehensive framework that will facilitate defence trade without prior government approval. The coalition will always support any mechanism that reduces red tape for business. We understand that business works better with less red tape when they are dealing with governments. The new process is expected to improve interoperability between both countries, which is of particular importance given the involvement of Australia, and indeed the Northern Territory, and the US in current combat operations such as those in Afghanistan.

It is proposed that the treaty will improve administrative delays caused by export control systems. This can only boost delivery times for new defence projects and enhance business opportunities for Australian companies looking to work with US contracts. Defence officials have confirmed that there will be ongoing compliance costs for businesses in the approved community and that this issue was raised by industry groups during the consultation phase. Other benefits include the fact that individual licences are no longer required for each export. We hope that this will allow for a swifter movement of eligible defence articles between approved Australian and US communities, therefore cutting delays in delivery times.

At the moment, most of the trade in the existing export control regime concentrates on physical goods, but with technology increasing—and we are in the middle of a technology boom—many defence export services can now be sent through brokers, using the internet. The gaps in Australia's existing defence export controls can be categorised into four areas: the intangible transfer of technology; the provision of services relating to defence, strategic goods and technology; the brokering of supply of these goods, technology and related services; and the export of goods intended for a military end use that may prejudice Australia's security, defence or international relations.

Another control which will be included in the series of Australian defence export controls is a new provision to address the export of non-controlled goods for military end use. Currently they are not included in this bill but are dealt with under separate amending legislation. They are, however, contained in the existing powers over the physical export of goods contained in the Customs Act 1901. The purpose of that separate legislation is to provide the Minister for Defence with a catch-all power to issue a notice to prohibit the export of goods which are not otherwise regulated to a particular place or person where the minister considers the export would prejudice Australia's security, defence or international relations.

As I said earlier, the treaty between the government of Australia and the government of the United States of America concerning defence trade cooperation was negotiated and signed without a regulation impact statement being produced. There was wide consultation with the defence industry on this bill. The reaction has been mixed, with concerns raised about the role of the United States Department of State in approving Australian companies or individuals as trusted members of the Australian community. The process of gaining such approval is seen as cumbersome, costly and time consuming, and is without a right of appeal. Coupled with this is the lack of confidence within the defence industry in the Australian Defence Export Control Office, DECO, making consistent decisions on what strategic goods can or cannot be exported.

In my electorate of Solomon we have an emerging defence industry. At present, my electorate is home to about 10 per cent of the Australian Defence Force combat personnel. Last week there was a major announcement in Darwin by US President Barack Obama that the US will boost its military presence over the coming years, and this is all set to start next year. I welcome the investment that this partnership with the US will make in the Northern Territory economy and the expected increase in expenditure in the coming years. It sends a clear message that the US wants to continue its relationship with Australia—and in particular with the Northern Territory. The symbolism of basing troops in Darwin is significant. Two weeks ago Darwin was named the No. 10 place to visit by Lonely Planet. Then last week we had President Obama visit us. This is all pretty good for Darwin, and it is no wonder that everyone is talking about us.

So I am pleased that there will now be a bigger focus on the sector and indeed on my electorate. As I said, the Northern Territory has a long history of supporting Australia's defence forces, and I welcome the contribution to the Northern Territory economy. The primary focus of defence support in the Northern Territory is through equipment and infrastructure. According to the figures provided to me by the Parliamentary Library, the Northern Territory as at 30 June 2011 had a $220 million defence industry turnover and over 5½ thousand permanent defence personnel, with 903 defence reserves and around 400 defence public servants. This equates to about 5.8 per cent of defence expenditure in the 2009-10 budget.

As with most businesses, defence support businesses seek longer-term contracts and opportunities to provide certainty of income to enable them to invest in facilities, the workforce and equipment. A number of concerns have been raised with me recently that local suppliers are not receiving regular and continued contracts, which is having a negative impact on their businesses. So, while I am supportive of the bill in principle, it is essential to make sure that local businesses and suppliers will not be negatively impacted, because what the territory needs is a vibrant small-business sector. Everyone knows that small business is the backbone of the Northern Territory.

The coalition remains committed to supporting the local defence industry. The coalition supports these bills and will seek to have them referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee when the bill goes to the Senate. As my colleague the member for Fadden said, the reason for doing this is to ensure that the concerns raised by the industry are dealt with before the legislation is passed into law.

Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

In rising today to speak on the Defence Trade Controls Bill 2011, I think it is worth noting that it is less than a week since we as a parliament were addressed by the President of the United States. During his address, President Obama reiterated the closeness and the strength of our defence relationship and paid tribute to our continued contributions in support of that relationship. This alliance represents our most significant defence relationship and has provided assurance to our national security and our regional security for many decades. It is a relationship codified in the ANZUS alliance, which has been the cornerstone of our security and defence since the Second World War and which this year celebrates its 60th anniversary.

I make these points because the legislation before us today is a key component of that relationship. The Defence Trade Controls Bill 2011 may not represent the headline components of our security arrangements with the US, but it does deal with perhaps the most important aspect of our defence and security relationship—that is, the sharing of defence technologies and information. While some may assume that the only thing Australia gains from the alliance is some promise of support in protecting our borders in exchange for the deployment of our forces in US operations, that is a simplistic and shallow analysis of what is in fact a deep and multifaceted relationship from which Australia gains great benefits. Most notably—and important to the debate before us today—is the transfer and sharing of defence technologies and materials. As the Minister for Defence Materiel mentioned in his second reading speech, some 50 per cent of our war fighting assets are sourced from the United States. This includes some of the iconic technologies with which we associate our defence forces—Black Hawk helicopters, F-18 Super Hornets and Abrams tanks. Along with their component technologies and materials, they were all developed in the United States and sourced from defence suppliers there.

I would like to commend the Minister for Defence Materiel on today's announcement of new capability for the special forces in Afghanistan. He announced today that we are getting 437 new Carl Gustav 84 millimetre guns and some thermal sights. I went to Afghanistan earlier this year with my colleague. I very much enjoyed the trip and gained a great insight and understanding of what our troops are doing and what they are achieving in Afghanistan. As with all soldiers, one of the issues they constantly talk about is capability. They are always aspiring for the latest capability they can get their hands on, particularly for the special forces, for whom the best capabilities can often be the difference between life and death. So I commend the Minister for Defence Materiel on the purchase of this new materiel to enhance the capability provided to special forces in Afghanistan. I know it will be greatly appreciated.

The iconic technologies I mentioned beforehand are just some examples of the many technologies, materiel and capabilities that we have gained from our relationship with the US. Trade with the US allows us to benefit from some of the latest and best defence technology in the world. It also allows our forces to be interoperable with US forces in our global deployments in Afghanistan, Iraq and elsewhere and, should the unthinkable occur, in the defence of our own national interests.

It was noted by the Minister for Defence Materiel that some 85 per cent of our military equipment will need to be replaced over the coming 10 to 15 years. This reality highlights the immense importance of maintaining our defence trade relationships, particularly with the United States. The Defence Trade Controls Bill 2011, if passed, will bring into force the Australia-United States Defence Trade Cooperation Treaty and it will close some of the gaps in our current defence trade controls. This treaty between Australia and the United States was entered into in September 2007. Last year the United States senate recommended its ratification in the US, and the US congress passed implementation legislation to give effect to the treaty. However, as part of the legislation passed by the US congress, the President of the United States is required to be sure that we have legislation enacted here in Australia that strengthens the control over the trade of defence goods and technologies.

It has been noted that Australia's current defence trade controls do need amendment to ensure that they not only meet the requirements of the treaty with the US but also reflect international best practice. Australia's current trade control regime was last looked at in the 1990s, and a lot has changed in the world since then. Indeed, it has been noted that while data held on a CD and exported would be captured under current arrangements, the same data, should it be transmitted over the internet, would not be subject to regulation. Obviously this is neither sustainable nor acceptable and that is why the Department of Defence has outlined four gaps in the current arrangements. The first is the intangible transfer of technology listed in the Defence and Strategic Goods List. The second is the provision of services related to goods and technology listed in the same list. The third addresses brokers arranging the supply of goods, technology and services to states or criminal organisations, including terrorist organisations. The fourth is the export of non-regulated goods that may contribute to a military end use that may prejudice our national security. Considering those issues, it is obvious that we had to do something. To not act would mean that Australia would not only lose the benefits of the treaty but fail to live up to our international obligations in regulating defence trade.

This leaves the government with but two options: to allow industry to self-regulate or to legislate better controls. Legislation has been shown to be the most appropriate and effective method of implementing these kinds of controls. Given the risk which a possible breach of trade rules would pose to our international reputation and ongoing defence treaties, allowing industry to self-regulate is just not appropriate. This does not mean that industry has not played a key part in the consideration of the legislation. Indeed, the formation of this legislation included three phases of consultation with industry, as the member for Solomon has pointed out. There was a treaty awareness phase in 2008 followed in 2010 and 2011 by two rounds of consultation on the legislation itself. These consultations were well attended by industry. As a result, the legislation has been amended to take into account the concerns of industry.

The government understands that there will be some costs incurred in complying with the legislation; however, there will be many benefits from this legislation in the long term for the Australian defence industry, particularly that of being recognised as a member of the approved community. Being a member of this community will remove the requirement for individual licences for each export and will ultimately allow much easier trade and defence relations. Also, the government will not levy a fee for applications, making transition to the new arrangement easier.

As I said at the beginning, this legislation is very important. It is very important for ensuring that our defence industry can trade with overseas partners. It is very important for ensuring that we maintain a technological advantage. It is very important for our ongoing defence and security relationship with the United States. Finally, it is very important for ensuring that we implement global best practice in the control of the trade of defence materiel and technologies. I commend the bills to the House.

Jason Clare (Blaxland, Australian Labor Party, Minister for Defence Materiel) Share this | Link to this | Hansard source

I thank the honourable members for Fadden, Chifley, Paterson, Blair, Solomon and Canberra for their contribution to this debate and for supporting this very important legislation on defence trade. This legislation gives effect to the defence trade cooperation treaty between Australia and the United States. It also strengthens Australia's export controls to align them with international best practice. The announcement by the Prime Minister and President Obama last week highlighted the importance of military cooperation between Australia and the United States. Military cooperation is fundamental to our national security. About half of Australia's war-fighting assets are sourced from the United States and we will spend $150 billion replacing or upgrading up to 85 per cent of our military equipment over the next 10 to 15 years. Strengthening this area of our alliance cooperation is, therefore, very clearly in our national interest.

The treaty removes the requirement for companies to seek individual licences for each export from the United States, allowing for the licence-free movement of eligible defence articles within an approved community. For the companies which join the approved community this will save time and money. It also has the potential to open up improved business opportunities for Australian companies to participate in US contracts.

The potential benefits of this legislation to the Australian defence industry have been well reinforced during this debate. The government recognises that for these benefits to be realised the treaty process must be easier to use and more commercially attractive than the current system, otherwise it will not be a success. That is why there has been extensive consultation with Australian industry during the development of these bills. That consultation was conducted over three major stages. Stage 1 was meetings with industry in eight capital cities and regional centres in December last year. Stage 2 was the establishment of the Defence Trade Cooperation Treaty Industry Advisory Panel in May this year. The panel includes experts from major Australian defence companies, small to medium businesses and the Department of Defence and has provided important advice on the development of these bills. Stage 3 was the release of the exposure draft of the bills for broader industry and community feedback in July this year. These bills are the result of that consultation.

I take this opportunity to once again thank Mr Ken Peacock, who led the consultation process with Australian industry. I also thank members of the advisory panel, who donated their time and expertise to ensure the treaty is a success. I have been impressed by the frank feedback from the panel, which has resulted in important changes to the bills and explanatory memorandums. I also take this opportunity to thank the officials in the Department of Defence and elsewhere who have put a lot of work into the preparation of this bill. They include strategic policy executives Mr Michael Shoebridge and Mr Murray Perks, who is here in the chamber today. I know Murray is retiring next year, and this legislation and its implementation are a fitting conclusion to a stellar career. I also thank their team at the Defence Export Control Office, the Defence General Counsel Mr David Lloyd and his team in defence legal and legislation areas, the drafting team in the Office of Parliamentary Counsel and the export control systems area, and the Defence Industry Security Directorate in the DMO. Their effort and their dedication to the development of this bill are greatly appreciated.

I note some concerns have been raised by the member for Fadden, and I would like to address those. The member for Fadden raised the issue of the government's record in first, second and other past approvals. The facts are that this year the government has approved 30 defence capability projects worth more than $5 billion. This takes the total value of project approvals since the government came to office to over $11 billion, and there is more to come before the end of this year. The member for Fadden also raised the issue of the Defence Export Control Office's IT system. As I said in my second reading speech, a procurement process to select a partner to develop and implement a new system is underway, and a contract is expected to be signed early next year. That new system will be set up and tested before the treaty enters into force.

The member for Fadden also raised the issue of regulations to this bill, and he is right to say that many of the important details of this bill will be included in the regulations. The regulations are currently being drafted and will be released for public comment and extensive consultation before the end of this year. It is planned for this consultation process to include consultation and feedback from the Defence Industry Advisory Panel, chaired by Mr Ken Peacock. It will also include engagement with peak industry groups—the Australian Industry Group and the Australian Industry and Defence Network. It will include website release of the draft regulations and explanatory statement; an email notification to approximately 400 industry members and government representatives who attended the treaty road show events in December 2010 and August 2011; the distribution of material to all industry members who are provided with export permits or licences during the exposure period; a DMO eportal banner which will redirect industry to the Defence Export Control Office website; DMO distribution via the Defence access office network; and the Defence Export Control Office 1800 number, which will have an option for industry to seek further information about the regulations.

I understand that some concern has been expressed about the impact the treaty processes will have on small to medium businesses. Defence has already made decisions which will particularly assist SMEs as they transition to operating under the treaty's 'approved community'. For example, there will be no membership fee for joining the approved community. Defence will not charge for security clearances where they are required. In addition, to minimise the initial impact on SMEs operating under the treaty, Defence will tailor free training programs upon request to address specific issues and provide assistance in understanding the application process and compliance requirements, including for specific security responsibilities. Defence will also ensure a streamlined case-by-case facility accreditation process, which means that some small to medium businesses may not be required to have their facility accredited, or will be accredited based on needs, subject to certain conditions. Defence will also put in place flexible ICT arrangements whereby ICT system accreditation is only required on a case-by-case basis when an identified business need is demonstrated. It will also produce an approved community manual to assist industry in understanding the requirements of operating under the treaty. It will seek SME involvement in the Pathfinder program which will assess the effectiveness and efficiency of processes and policies under the treaty prior to implementation and will continue active communications with industry through outreach activities including extensive distribution of flyers, website publication of frequently asked questions, an ongoing free-call inquiry line and extensive representation at defence industry events and a number of trade shows. I am advised that if these bills are passed by the House they will be considered in greater detail by the Senate Foreign Affairs, Defence and Trade Legislation Committee. I understand that committee has commenced its inquiry and has asked for submissions in relation to this legislation to be received by 31 January 2012. I thank members of the Joint Standing Committee on Foreign Affairs, Defence and Trade for their recommendation that both bills be passed without amendment. This will ensure quick passage of the bills through the House and avoid duplicating the examination being conducted by the Senate committee.

As I said in my second reading speech, this is very important legislation. It will strengthen our alliance with the United States and the relationship between our defence industries; improve interoperability of the Australian and United States armed forces; help to deliver equipment to our troops faster and cheaper; provide opportunities for the Australian defence industry to win work in the US defence market; and enhance Australia’s defence export controls to bring them in line with international best practice. I therefore commend the bills to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.