Monday, 2 March 2020
Private Members' Business
Boxer Combat Reconnaissance Vehicles Project
That the House:
(1) notes that new Defence projects such as the Boxer Combat Reconnaissance Vehicles built under the $5 billion LAND 400 Phase 2 Mounted Combat Reconnaissance Capability program support the development of defence industry and small business in electorates across Australia;
(2) supports job creation in construction and sustainment;
(3) recognises this project presents an exciting opportunity for Australian industry to play a vital role in delivering leading-edge capability and technology to Australia’s army; and
(4) acknowledges the Government’s significant $200 billion investment in Australia’s defence capability.
The Morrison government's No. 1 priority is to keep Australians safe. It was a commitment made in 2013 and it has continued to be at the forefront of our consideration ever since. An important part of delivering on this commitment is the unprecedented investment of more than $200 billion in Australia's defence capability over the next 10 years. This represents the largest investment in the Australian Defence Force in decades. This year, the defence budget will restore back to two per cent of GDP. Again, this represents another example of us being true to our word and meeting our commitment that we made back in 2013. The Australian government is investing over $5.2 billion to build 211 Boxer combat reconnaissance vehicles.
I joined the Australian Army in the immediate aftermath of the Cold War in the mid-80s. We were still using very much conventional war-fighting. Basically, there was a line drawn and everyone on the wrong side of the line was the enemy. Today, however, the threat of terrorism—with a threat of guerrilla-style warfare and escalated low-level operations—has meant our war-fighter is now working in towns and cities amongst civilians. So the reduction of collateral is absolutely paramount.
It is also important that our war-fighters are protected by a defensive platform. In this case, it's light armoured vehicles. These vehicles will allow the war-fighter to engage targets, to defend against improvised explosive devices, roadside bombs and rocket-propelled grenade-style warfare. At the same time, it will reduce the level of collateral damage in an urban environment. Importantly, the new style of equipment will provide a posture. Its mere presence engenders respect—and that again is important for our war-fighters. This is a significant Army capability and force multiplier that will enhance the safety, security and protection of Australian troops for the next 30 years.
This investment will also support Australia's prosperity. The program represents an exciting opportunity for Australian industry to play a vital role in delivering leading-edge defence capability and technology to the Australian Army. Our government's investment decisions in defence capability are complemented through a comprehensive defence industry, which supports jobs and investment right across our country, including in my electorate of Braddon, in Tasmania. Contracts have been signed with Rheinmetall Defence Australia to deliver and support 211 Boxer vehicles, creating 450 jobs across the country. The build of these vehicles has commenced.
In September last year Rheinmetall signed a subcontract with Direct Edge, a company based in South Burnie on the north-west coast of Tasmania. Direct Edge will supply prototype bracketry for the first 25 vehicles. The project will generate up to 10 jobs in that small business and, as a result, $15 million worth of investment into our region. Congratulations to Diane Edgerton, the CEO of Direct Edge, Damien Smith, the production manager, and all the team at Direct Edge.
There is enormous potential for business in my region, including in the defence industries. We already see this happening with businesses like a Penguin Composites and Elphinstone Underground. This is a great project, well delivered and engaging local businesses, that will provide prosperity for not only our Australian Defence Force but also Australian business. I commend this motion to the House.
In recent weeks the Morrison government has been caught out time and time again. This government made an election promise of about 1,500 jobs to Queensland as part of the Land 400 phase 2 project. However, last week we found out that only 330 jobs would be going to that state. This government has developed a habit of trying to buy votes through misleading the Australian people. This, like the sports rorts scandal, has had but one objective: to buy an election result. It's not to develop a plan for this country, not to heave us out of the economic slumber that we are currently in, not to get more people into work, not to develop our sovereign defence industry capability but just to manipulate the Australian people into electing them for another three years.
This, like many other election commitments, was merely a stab in the dark at buying some votes with the thought that they wouldn't actually have to follow through. There was an expectation set by the Prime Minister, and those LNP members from Queensland, that Queensland would be getting the lion's share of jobs from Land 400 phase 2's $5 billion contract. In the lead-up to the election, in fact as recently as August 2019, the Prime Minister told The Courier-Mail that he expected most of the predicted 1,400 jobs of that stage would go to Queensland. In fact, only 20 per cent of these jobs are heading to the sunshine state.
We know that this is yet another example of #Scotty from Marketing nabbing a headline and being loose with the truth. The spin over substance has left the people of Queensland without many of the much needed, valued jobs that they need in the defence industry space. It's yet another example of this government using the defence space as a partisan ATM rather than creating a sovereign capability, building a self-sustaining defence industry workforce and capability. The government claims that they're making a $200 billion investment in Australian defence capability, but last week it was revealed that instead of the money being spent on new equipment, technology and infrastructure for our defence force some is being spent on internal departmental salaries, sexual assault victim compensation, pollution clean-up and keeping the Defence department's IT systems barely running. This program is meant to be used to ensure our defence personal have the equipment and capability to keep our nation safe. Instead, they are quietly siphoning off money from this budget to cover their running expenses. They are, indeed, robbing Peter to pay Paul.
This government is not serious about job creation, and it is not serious about maintaining and growing our Australian defence industry. Last week Naval Group revealed it will spend nearly 60 per cent of the value of the Future Submarine contract in Australia, but nobody can confirm if or when it will be an enforceable contractual requirement. You can't trust a word this government has to say about the Future Submarine project. The government has been crafty. They say they are spending 60 per cent of the contract cash in Australia, but they mask the fact that the cash will go towards things like hotels, removalists, travel agents, linguists and—wait for it—even the South Australian agricultural society! I've got nothing against agricultural societies; the Kelmscott Agricultural Society in my electorate is one of the oldest in the country. But I fail to see how an agricultural society can contribute to the Australian content required for building submarines let alone developing sovereign capability. Maybe an underwater petting zoo will be included in these submarines, or is the government proposing to develop more killer rabbits of Caerbannog, in which case let's hope that our enemies haven't developed the Holy Hand Grenade of Antioch!
I've spent a lot of time recently meeting with small and medium Australian businesses from across the nation who are working in the defence space. They've all been telling me the same thing: they have no confidence this in this government supporting them in their industry—in job creation and opportunity, as products continue to be purchased off the shelf rather than being made here and businesses are told that they don't have the experience or the workforce to be able to do major defence industry work despite previously supplying the Defence Force—because they simply aren't getting the opportunity when they're put up against outsourced, overseas industry. Australian businesses are continuously being shown that there should be opportunities but then are locked out, time and time again. So I thank the member for Braddon for putting forward this motion that provides the opportunity to speak on the lack of support that this government has been providing to Australian defence industry or to developing our sovereign capability for our defence force industry support, sustainment, procurement and build.
What absolute rot and untruth from the Labor Party. Time and time again they come into this chamber and they do the same. Firstly, I acknowledge the 20 years of service from the member for Braddon, who has put forward this motion on defence procurement. I thank him and other men and women who have given themselves in service to our military and to the people of Australia. It is a pleasure to support a motion put forward by him.
It is not at all surprising that Labor again drivel untruths to try to tell a story. We know that Labor's spend on defence when they were in office—1.5 per cent of GDP—was actually lower than before World War 2. That is an absolute and utter disgrace. It takes a coalition government, the only side of politics that happens to know how to run an economy, to be able to ensure that defence spending is lifted. Defence spending has been lifted to be on track to two per cent of GDP. Part of that is the largest recapitalisation program that this country has seen in a long, long time, and part of that recapitalisation program is for the Army. Within the Army is the Land program, and within Land of course is Land 400 phase 2, which is the building of 211 combat reconnaissance vehicles. It is the largest contract in the history of the Australian Army. It was won by Rheinmetall and is to be delivered through Queensland.
Clearly, Labor have a problem with Queensland because of what happened in last year's federal election. If you don't get support from Queensland at the election you have no right to stand in this chamber and try to suggest that something be taken away from Queensland. It is a cheap trick to try to penalise the very state that didn't give you support. It is absolutely no coincidence that they stand up, opposing companies in Queensland that will benefit from this job.
One of the wonderful things about the way that this government has run procurement has been to make sure that small and medium businesses reap rewards, and that is precisely what is going to be happen with a particularly high Australian industry content out of this program. We're talking about a $5 billion procurement project that will probably have at least that amount of spending on its sustainment and through-life support. We know that through the Rheinmetall job about 330 Queenslanders will be directly employed to deliver on these reconnaissance vehicles. We also know that it will be up to 450 when you account for people based at Rheinmetall headquarters.
Is this the largest contribution of jobs through that contract throughout the country? Yes, it is. Queensland does win big time out of Rheinmetall. Indeed, Land 400 phase 2 establishes not only a large contract for our Army but the capability of our local industry, through which we can not only ensure the transfer of intellectual property from Germany but also build deep expertise that will go into new products that we can export. Those opposite don't like that idea. They don't like that idea, because Queensland, which obviously did not support them in last year's federal election, is the big winner of Land 400 phase 2 jobs. They like to tell mistruths. They like to misuse numbers. They misused numbers again with the 'over 1,400 jobs at the peak of manufacturing and sustainment' comment. They know that the jobs which can be divvied up and specified by state, with Queensland getting 330, are for the procurement piece, but the big, high-level number of over 1,400 at the peak includes sustainment, for which there has not been a breakdown. Again, this is Labor mistruths.
Here's the rub. With support of the Queensland LNP team, colleagues on this side of the House—with not a word from those on the other side—helped advocate to ensure that the single-largest contract in the history of the Australian Army came to Queensland. It is our state that is building that expertise. It is our state that will win. It is our state that will get the jobs. If Labor have a problem with it then they should tell us exactly where they want those jobs to go, if not Queensland.
It's an honour to speak on the procurement of the Land 400 phase 2 combat reconnaissance vehicles for the Australian Army because investments like these keep Australian soldiers safe. The German Boxer eight-by-eight CRV will replace the ASLAVs that have seen continuous operational service since 1996. I pay credit to the ASLAVs because back in the early 1990s, as the 2nd Calvary Regiment moved north to the Robertson Barracks in Darwin, they received the ASLAVs and then when Timor erupted in 1999 the ASLAVs were put into service and have been continually in service, with upgrades that provide greater protection for the crew, in Iraq and Afghanistan. They have performed a very important role for our nation in keeping our people safe.
These new generation Boxers will operate in high-threat operations, ranging from peacekeeping through to close combat operations. It's vital that our soldiers have the best available kit to not only protect them but enable mission success. It's also excellent that they're going to be equipped with very potent weapon systems, like the Israeli Rafael Spike long-range antitank guided missile, which has a range out to four kilometres. Again this will keep our people safe.
I welcome that Rheinmetall will base its regional headquarters as well as its manufacturing hub in south-eastern Queensland. It's important, as a matter of principle, that we keep and grow our onshore defence manufacturing capabilities. Of course, principles, by their very definition, are universal. With that in mind, I'd like to read two lines of this motion that has been moved in the House. It states that this House:
(2) supports job creation in construction and sustainment;
(3) recognises this project presents an exciting opportunity for Australian industry to play a vital role in delivering leading-edge capability and technology to Australia's army …
These are praiseworthy aims. It's important that this House supports job creation in construction and sustainment and the local defence industry everywhere around the country, including of course Queensland, WA, SA and the Northern Territory, where I'm from and where such noble principles espoused by the federal government often die in a ditch.
The Top End plays an important role in keeping our nation safe and strengthening our alliance with our US allies. The government's $1.1 billion program of infrastructure upgrades at RAAF Base Tindal is a case in point. Making sure Territorians can tender for these works is the least Canberra can do for our Territory businesses. As part of the promised $20 billion of defence funding in northern Australia over coming decades, $737 million has been committed to upgrade the Tindal airfield, extend the runway and build extra fuel storage facilities. The government has said that an additional $437 million will go towards engineering services on the base for power, water, sewerage and 108 new live-in units for our defence personnel. The United States Department of Defense reportedly also plans to spend more than $400 million on developing naval and air force facilities in the Northern Territory over the next few years.
It's very important that Territorians are able to have a go at that work and are able to tender to allow local companies and workers to benefit from these huge projects. The Minister for Defence Industry, Melissa Price, has guaranteed that defence's managing contractor will be required to maximise the involvement of local industry from the Katherine region and wider Northern Territory. She said that hundreds of locals will benefit from subcontract packages and supply chain work. For those companies, I draw your attention to the fact that a public information session will be held on 4 March in Darwin, to allow companies to ask questions about what is involved and how they might get a look-in.
I mention my concerns about whether Territory companies will be able to get a look-in because, to my great disappointment and that of many members of the Territory business community, a defence contract in Darwin has been given to a state owned foreign company, when at least three local companies could have done that work. We are right to have our concerns about this. (Time expired)
I want to acknowledge the military service that my colleagues, both on this side and the other, have provided to their country. It's an absolute pleasure to stand and speak on this motion of the member for Braddon's.
The last speaker, the member for Solomon, had a different slant. I want to congratulate him, by and large, for his views on this motion, as opposed to the previous speaker, the member for Burt, who is also the shadow defence industry minister. The member for Burt came into this place and started lecturing us about defence procurement. He is from a party that did not build one ship—not one ship. It's very interesting to see that just in the last week we celebrated with the defence minister the NUSHIP Sydney being delivered to the Royal Australian Navy. The Royal Australian Navy took possession of NUSHIP Sydney, the final three of the air warfare destroyers, which will no doubt serve this country terrifically in the years to come.
Returning to the motion at hand, this Rheinmetall project—which, as we all know, is being provided to Queensland to be built in Queensland—will provide jobs not just for Queensland. I'm pleased to see the member for Oxley in here. The military defence centre of excellence, where the vehicles will be built, is in his electorate. Good luck him and good luck to the people of Ipswich. I would've liked those jobs in Fisher, but, there you go. The member for Oxley will no doubt stand up here today and talk about how great this program is: jobs for the good people of Ipswich, jobs for the good people of South East Queensland and jobs for Australians. There are those opposite—I'm sure the member for Oxley won't be one of them—who stand in this place and say that the government only provides jobs for coalition members' electorates. Well, the member for Oxley will no doubt stand up here in a few short moments and talk about how wonderful this is for his electorate.
Mr Dick interjecting—
I take the interjection from the member for Oxley. He's already done it. I congratulate him for his honesty. It'd be great to see that sort of honesty replicated by all those opposite.
This is a $5 billion project, just in the initial build. Over its lifetime sustainment it's $15 billion of defence procurement that will ensure sovereign capability for Australia, because that's what this is all about. Through the 2016 Defence white paper, Mr Deputy Speaker Zimmerman, you would no doubt be aware that this government has seen a shift in defence industry procurement. No longer are we, as a government, prepared to just buy equipment off the shelf. We want to see Australians get good, meaningful, hi-tech jobs and there's no better way to do that than through defence industry procurement. This government, through that 2016 white paper, has announced $200 billion of defence industry local builds. Yes, there will be some products that are purchased overseas. We're not, at this stage in our country, able to build our own fighter aircraft, although we are providing domestic material that goes into that supply chain across the world. But we have made a very conscious decision to increase our Australian industry content. We will continue to do that. Land 400 phase 2 is a classic example of that. I congratulate the government on its Land 400 phase 3 project, which has just recently gone out. I know the minister is doing some terrific work in the community. If you're interested in small business, get in. Now is your chance to get into that next phase.
I intend, in my five minutes, to talk about the last part of this motion, the Integrated Investment Program. This government likes to brag about that program, but this government is already cutting that program. This government has already cut $5.2 billion out of that program a mere 3½ years since announcing it. We've seen a $1.2 billion cut through omitted schedule delays. We've seen $566 million spent on PFAS remediation. We've seen $560 million diverted to wages blowout. We've seen $465 million diverted to an ICT blowout. We've seen $165 million diverted to compensation for Defence's response to the royal commission into child sexual abuse.
The last two of those, and the PFAS remediation, are really important topics and they deserve support, but not out of Defence's capital budget. The government can't talk about this spend in the Integrated Investment Program if it's then going to use it as a honeypot to spend on other things. The government have made a commitment to the country that they will be spending this money on defence capital acquisition, but they've already breached this commitment. This is made much worse by their mismanagement of the projects. This government likes to brag about how much money it's spending in defence capital acquisition, but it is wasting so much of it. They cannot manage defence procurement.
They have an awful track record. Their last government, under Prime Minister Howard, mismanaged the Seasprite helicopter project so badly that it had to be cancelled. We spent $1½ billion on a helicopter and missiles that weren't delivered. Sadly, it has got worse under this particular iteration of the coalition government. They have 36 major defence projects that are running cumulatively 74 years late. Seventy-four years worth of delay across 36 major projects. That is an average of over two years of delay to each of these projects. That means that the Australian Defence Force is not getting the equipment they need when they need it, because of this government's mismanagement. This means that the ADF is making do with outdated equipment because this government can't manage defence acquisition. It's not just the ADF that suffers; it's Australian taxpayers that suffer, because these 36 major projects also have a cumulative $10.3 billion worth of budget blowout. Seventy-four years of delay and $10.3 billion of budget blowout.
There's a simple reason for this: the revolving door of defence ministers. Sadly, this government has been in power for a bit over six years and they've had five different defence ministers. Seriously, goldfish have an average life expectancy greater than defence ministers in this government. On average, about one defence minister every 14 months. The latest one is a doozy. This defence minister, Senator Reynolds, had a total ministerial career of five weeks before being appointed defence minister. Five weeks! I'm sure it was a very fruitful five weeks, where she really got to grips with the challenging role of a minister. That's not discounting her role and contribution in other roles, but quite frankly you do need to actually have some experience as a minister, and in particular a cabinet minister, before you take on such an important portfolio as defence. Five weeks as a minister before becoming defence minister!
What we have seen is a complete step back from this government in terms of oversight of defence. They've had three ministerial projects of concern summits in 6½ years. They've watered down the projects of concern process, which is a key oversight mechanism for making sure that projects are delivered on time and on budget. We have seen that. There have been 36 major projects delayed 74 years. There is a 37-month delay in the landing helicopter dock. There are 29 months in the MRH-90, 44 months in deployable air traffic management, 42 months in Defence satellites, 40 months for special operations vehicles force the commandos, 28 months for ADF IFF and 18 months for Hercules upgrade. Only this last week we learned about a 12-month delay to JORN, the Jindalee Operational Radar Network, a key early-warning system for this country.
This government likes to brag about how much money it's allocated to Defence. They've already cut $5.2 billion from the integrated investment plan and they've already mismanaged so many projects because each of their defence ministers has training wheels on.