House debates

Monday, 31 August 2020

Private Members' Business

Defence Industry

11:52 am

Photo of Vince ConnellyVince Connelly (Stirling, Liberal Party) Share this | | Hansard source

No Australian government in modern history has invested more or done more to modernise our military than this coalition government. By way of comparison, the previous Labor government sat idle for six years in what could be referred to as a valley of death for the Australian defence industry. Not only did they famously fail to commission a single Australian built ship but they gutted $18 billion from the defence budget, bringing it to its lowest level since World War II. When I say that they gutted $18 billion, I mean that it was an actual cut, unlike what those opposite refer to in aged care as a cut. By comparison, aged-care funding has gone up by more than $1 billion each year under this government.

Having served both full time and part time as a Reservist in Australia's military, as many in this place have as well, it was very disappointing to see these cuts which impact on our ability to protect Australia's national interests. The protection of our national interests does require a strong and capable Australian Defence Force. Our ADF was a casualty of Labor's inability to effectively manage the budget. That lack of investment in defence industry really did cost jobs. Under Labor, 119 defence projects were delayed, 43 were reduced and eight were cancelled. This really did risk creating critical capability gaps.

By way of contrast, the Morrison government is getting on with the job of delivering for Defence and for our defence industry. In my home state of Western Australia, the Morrison government has restored hope to the defence industry. Ten of the 12 Arafura class patrol vessels, 21 Guardian class patrol boats, two minehunter support vessels, one hydrographic vessel and six patrol boats will be built at Henderson in Western Australia. Acknowledging that I have already reminded those present about Labor's inability to commission a single ship, it's my pleasure to point out that all of these numbers are in addition to that sum total of zero new ships commissioned by those opposite.

Let me focus now on the all-important aspect of Australian jobs. This is particularly topical at the moment as we move towards economic recovery through our response to and now recovery from coronavirus. The Morrison government is building a stronger defence industry through an unprecedented investment of $270 billion in Australia's defence capabilities. There are 15,000 businesses and 70,000 Australians employed in our defence industry that are directly benefiting from our $270 billion plan. We are creating at least 15,000 jobs in Australian defence shipbuilding with our plan to build more ships and create more jobs and more opportunities for small businesses right around the country. The 12 new offshore patrol vessel will be delivered by Australian workers in Australian shipyards using Australian steel. Now only will this project create employment for up to 1,000 Australia workers but the vessels will play an important role in protecting our borders and keeping Australians safe.

The Australian defence industry is also growing by taking up opportunities to participate in global supply chains, including that relating to the Joint Strike Fighter, or JSF. Under the JSF program, 50 Australian companies employing 2,400 people around Australia are involved, sharing $1.7 billion in production contracts. The Morrison government will meet our targets and go further in the JSF program, as the numbers are expected to increase to $2 billion and 5,000 jobs nationally by 2023.

On 26 August we announced a $1 billion defence recovery investment to keep defence industry strong on the road ahead. We're doing this to back local tradies and suppliers to do work on our defence bases. We're also increasing funding for defence industry grants, including the Skilling Australia's Defence Industry grant, and more than quadrupling the funding of this program from $4 million to $17 million a year. The Morrison government is getting on with the job of delivering for defence industry. (Time expired)

Photo of Rebekha SharkieRebekha Sharkie (Mayo, Centre Alliance) Share this | | Hansard source

I rise in support of this motion by the member for Herbert. South Australia is not immune to the rising tide of unemployment in the wake of the economic downturn caused by this pandemic. While unemployment in our state climbed to 8.8 per cent in June, the defence industry in South Australia is bucking this trend and providing a consistent stream of skilled work for our state, including in my electorate of Mayo.

Just around the corner from my electorate office in Mount Barker, you will find Zenith Custom Creations, owned and operated by Craig and Linda. Housed in an unassuming warehouse in a light industrial area, Zenith could be mistaken for any ordinary factory if it weren't for the occasional convoy of camouflage-clad equipment coming and going from their rapidly expanding business. I visited Zenith in October 2019, and their factory has doubled in size since my first visit back in 2017. Zenith has been operating since 2001, and in conjunction with Daronmont Technologies they manufacture the latest-generation, lightweight, air-transportable shelters for military applications. I had the opportunity to inspect one of the shelters during my most recent visit and gain an understanding of the many uses that these pods could be adapted to meet—from office spaces to scientific laboratories and, sadly, even for morgues. Whatever the specifications, Craig and Linda and their team meet the brief.

The team at Zenith use cutting-edge technology, including wi-fi enabled aluminium welders, to deliver high-quality products for their customers. But what Craig and Linda stressed to me during our visit was that, while investing in the latest equipment was a necessary business expense, what was crucial to their success was their staff. They value their staff and they want their staff to grow with the company. They also recognise the benefits of a diverse life experience. For example, during my visit I spoke with an employee who spent years working as a baker but who is now learning specialist welding skills with the guidance and support of Zenith. Between 2017 and 2019 Zenith have doubled their staff and were offering a stable, attractive source of employment for our local community.

They continue to go from strength to strength. Just last month Kongsberg Defence Australia and Raytheon Australia announced the commencement of an in-country manufacturing activity for the fire distribution shelter system as part of its national advanced surface-to-air missile system capability for the Australian Army. In making the announcement, Kongsberg's general manager, Mr John Fry, said he was 'proud to partner with Australian businesses such as Zenith Custom Creations' and went on to note:

Zenith … have an excellent track record and have demonstrated their ability to manufacture to demanding specifications, which will be suitable for not only the Australian Defence Force, but for Kongsberg's global supply chain

Zenith Custom Creations is an example of what can happen when we support our regional businesses, who in turn support our regional workers, who can then support our regional economies. I can't tell you—

A division having been called in the House of Representatives—

Sitting suspended from 12 : 01 to 12 : 19

As I was saying. Zenith Custom Creations is an example of what can happen when we support our regional businesses, who, in turn, support our regional workers, who can then support our regional economies and communities. What this means in my electorate is that instead of somebody leaving for work at seven o'clock in the morning, heading down to the city and coming back at seven o'clock at night, they are home and present in their communities. They can be part of footy practice and they can be part of netball. They can be part of all the good things that we need them to do and to volunteer for.

With concerning losses and redundancies across the hospitality, tourism and accommodation sectors—sectors that are typically dominated by women—it may be that defence industries are able to provide new career opportunities for those workers who are keen to remain in our regions. I know that the Working Women's Centre in Adelaide is hoping to partner with defence contractors to look at ways that the sector can encourage women who have lost employment during the pandemic to take up apprenticeships and learn new skills in this industry. I support this initiative and I encourage both the state and federal governments to consider providing financial support to these programs to improve the chances of keeping in the workplace not only women but also, particularly, those in the regions, where the opportunities are fewer. I'm very proud of all of our businesses across Mayo, and it has been a pleasure today to talk about the great work of Zenith.

12:20 pm

Photo of David GillespieDavid Gillespie (Lyne, National Party) Share this | | Hansard source

The coalition government certainly is supporting defence industry capability in Australia by contracting local work to build boats to defend our nation. We are all aware of the development of 12 attack class submarines and the Hunter class frigates in Osborne in South Australia. The Arafura class offshore patrol vessels are not only great boats but also a great way of us engaging with our Pacific partners. They are going to be built at Henderson in WA. The guardian class patrol boats, two minehunter support vessels, a hydrographic survey vessel and more patrol boats are also being built at the Henderson shipyard in Western Australia—with all Australian workers, Australian steel and Australian skills being developed as a result. There are at least 15,000 jobs, which means dollars circulating in the Australian economy.

I recall in this very house, in my first term, leading a series of engagements with my colleagues about why we don't get local procurement happening. I heard every excuse under the sun as to why we couldn't do it—for example, we'd be breaking WTO rules or free trade agreements. But somewhere along the line the penny dropped, and suddenly the contracting stuff in Australia was really good for the Australian economy—lightbulb moment, Australia. It is great to contract and do things in Australia because the economic multiplier stays here—and we are certainly doing that in Defence.

Before I finish, I would just like to highlight that there are Australian boat builders who are manufacturing technology for our most significant ally, and that is the United States of America. The humble Birdon marine, which is based in Port Macquarie, in a strategic location near the highway and on the Hastings River, have secured over $700 million worth of contracts to build bridge erection boats for the US Army. They have received their second contract. They have also received contracts to extend the life of existing coastguard vessels for the US Coastguard. They are also building ferries for the New South Wales government. They are doing all sorts of work around the world, manufacturing facilities in partnerships around the world.

So, when we are looking to expand our industries, we shouldn't always look to the primes, which are generally overseas. If we are really going to grow our manufacturing capability we should, like US defense does, put aside a slice of the funds for contracting to the smaller providers so that they're not always tied in by getting a piece of the action out of the primes. That's not to say that the primes aren't doing a good job, but I think we should really be looking to how we grow our manufacturing capability in the defence space in a more bottom-up rather than a top-down fashion. We have great capability in Australia.

I commend our government's policy of building up our defence capability by focusing on local production. It's such a great idea. But, remember, there are lots of gems hiding here onshore in Australia. The rest of the world recognises them, and I'm sure they're on the radar of people over in the Russell Offices. So don't always assume that you need a big prime contractor to get great work done in Australia.

12:24 pm

Photo of Tim WattsTim Watts (Gellibrand, Australian Labor Party, Shadow Assistant Minister for Communications) Share this | | Hansard source

We are now deep in a national recession, but the Morrison government still don't have a plan for getting Australia out of it. The Morrison government expect another 400,000 Australians to lose their jobs between now and Christmas, but they won't tell us what they're going to do about it. They've got a political plan for whom they're going to blame, and we've seen that throughout the television networks this morning, but they don't yet have a proper plan for jobs for the Australian people.

Defence industry could play an important role in a national jobs plan for Australia's post-COVID-19 recovery if the government showed some vision. In my portfolio, the domestic capability of Australia's cybersecurity industry is now a crucial part of Australia's ability to defend itself, and it could be a major source of jobs in Australia's economic recovery. Both the 2020 Defence Strategic Update and the 2020 Force Structure Plan recognised the importance of cyber capabilities for Australia's Defence Force. The defence mobilisation review found in that, in the cyberfronts of modern unconventional warfare, 'many of the targets will be civilian businesses and individuals' and that, similarly, 'the resources needed to respond will be mostly privately held'. Responding in this context will be 'a whole of nation endeavour'. But, while our cyber defence planners have a growing appreciation of the role of cyber in Australia's war-fighting capacity, the Australian government's understanding of Australia's cybersecurity sector as a crucial sovereign capability in Australia's defence industry is stuck in the last century.

Cybersecurity capabilities are slightly different from other defence capabilities. Offensive and defensive cybersecurity capabilities are two sides of the same coin. You can't understand one without understanding the other. At the same time, the terrain of these offensive and defensive cybersecurity capabilities traverses defence and civilian networks, public and privately owned infrastructure and OT networks, decades-old legacy systems and rapidly innovating new systems. Cybersecurity capabilities can't exist in isolation. They can't be built in a lab cut off from the world. They need to be embedded in a diverse, interconnected and rapidly evolving sector to be effective. They need a thriving ecosystem in which to develop—not just well resourced security agencies and defence forces but also a network of cybersecurity firms, big and small, local and international, as well as independent researchers, academics and savvy journalists.

A division having been called in the House of Representatives—

Sitting suspended from 12:27 to 12:37

The Australian private sector cybersecurity companies in particular have a significant role to play in helping to defend Australia from cyberattacks and in building the necessary resilience to protect Australians from the near constant cyberattacks that we experience today. We already have a number of world-class cybersecurity companies providing key capabilities, like Sapien's OT security monitoring, Red Piranha's threat management platform, UpGuard's supply chain risk management framework and Senetas's post-quantum cryptography. The local cybersecurity industry isn't just a part of our national cyberdefence; they are also a source of high-wage jobs in a sector that's only going to grow in coming years. Business analysis firm Canalys forecast that cybersecurity spending will increase by between 2.5 per cent and 5.6 per cent globally this year despite the wider budget pressures on companies during and after the COVID-19 pandemic.

AustCyber has forecast that Australia will require an extra 17,000 additional cybersecurity workers by 2026 to meet this security challenge, but, despite the pressing need for local capability and the job creation opportunity that it represents, we're missing the opportunity. The Morrison government's recently released Australia's Cyber Security Strategy 2020 set no objectives for domestic cybersecurity industry development and supported no policies to grow the local industry. Similarly, there was little urgency to scale up investment and technological innovation in the recent Defence Strategic Update. We're investing more and more in the cybercapabilities of our security and defence agencies—well and good—but we're not matching this in the local ecosystem needed to support, grow and develop our national cybercapabilities.

Given the security and economic imperative, it's time for government to consider an Australian strategic technology industry policy. A strategic industry policy for the information age would align research and development, government procurement rules on local and SME participation, defence spending, higher education and industry policies to the development of strategically important sovereign capabilities and growth opportunities in a cybersecurity sector, a framework for the Australian government to back Australian companies to meet Australian security needs and create jobs for other Australians in the process. In the midst of a global pandemic and a national recession, this is just what the doctor ordered. Australia's changing strategic circumstances could be an opportunity as well as a challenge for Australia. If the government has the vision and foresight to lead this change, we can develop world-leading cybersecurity capabilities right here in Australia. We should grasp these opportunities and address the challenges that we're facing on the global stage.

12:40 pm

Photo of Angie BellAngie Bell (Moncrieff, Liberal National Party) Share this | | Hansard source

The defence of our nation is a solemn duty of our government, and with an unprecedented $270 billion investment the Morrison government is rising to meet the challenge of our times as we work towards two per cent of GDP for defence spending.

That investment will create new opportunities for small businesses and create thousands of new jobs. By contrast, Labor raided the defence budget to pay for their economic mismanagement; they cut $18 billion. In Moncrieff, business leaders have been coming together to rebuild the existing industries and to create the future of new and emerging industries. I'll be spreading the word to Gold Coast small businesses to scan our defence industry for opportunities. The families of Moncrieff will also benefit from jobs which are created by defence industry. One that comes to mind in Moncrieff is Combat Clothing Australia in Southport, owned by Stuart Bruce. It manufactures clothing for defence. And there are definitely a lot of other opportunities that one may not think about which could apply to the central Gold Coast seat of Moncrieff. Imagine also the inspiration for Gold Coast students enthusiastically studying STEM subjects, knowing the potential of a career in the defence industry.

We ask so much of all those who serve in the Australian Defence Force. The member for Herbert exemplifies that service. He served with the Australian Army in East Timor and in Afghanistan, where he was severely wounded by an improvised explosive device. The arduous recovery process did not quell his desire to serve others. The member for Herbert has worked tirelessly to promote mental wellbeing and suicide prevention. In 2018, he was awarded the Medal of the Order of Australia, an OAM, for his service to war veterans. Mr Thompson, I thank you for your service. I thank your wife, Jenna, and your two daughters, Astin and Emery, for continuing to share you as you serve the people of Herbert and Australia more broadly.

The more we understand the sacrifices made by ADF families, the better we can understand the importance of the many different ways we can better support them. Our words of support matter to our women and men in uniform, but even more vital is that we support them with the capability to do their job well. Australia needs that capability for all of us to be safe. Building that capability creates defence industry jobs—it's a double win. The 211 new combat reconnaissance vehicles to be delivered through LAND 400 Phase 2 demonstrate well how the defence industry can deliver jobs, capability and improved safety for ADF members. This program will create 1,450 jobs across Australia. The Morrison government's significant shipbuilding for the defence of Australia includes 12 submarines and 51 surface ships, creating at least 15,000 jobs for my former state of South Australia. This contrasts with Labor, that didn't commission a single Australian-built ship.

Building on Australia's defence capability is building our nation's defence industry, including small business. The jobs that flow from building up Australia's defence capability are not just from assembling ships, vehicles and other equipment but also from inputs such as Australian steel for the Arafura class offshore patrol vessels and, as I said before, uniforms for soldiers. One of the important roles for the offshore patrol vessels is securing our borders from the illegal arrivals that would recommence if Labor's past weak border policies were implemented again. That weakness—that inability to commit to outcomes over virtue signalling—was disastrously enabling for the people smugglers. This resulted in over 50,000 illegal arrivals. There is nothing compassionate or virtuous about over 1,200 people dying at sea. Our defence capability has proved its value in securing our borders, supporting bushfire response and, can I say, in the current crisis. This is the much broader context of this capability, beyond the obvious military roles.

The Morrison government is determined that its $270 billion defence investment involves Australian businesses in all aspects of these important projects, including design, construction, project management and sustainment activities. The government has mandated that tenders must demonstrate how the maximisation of Australian defence industry capability will be achieved. We should all share that determination to create opportunities for Australian business. The opportunities are not just national; they are global. Fifty Australian companies are sharing $1.7 billion in contracts for the Joint Strike Fighter program, employing 2,400 people. The Morrison government will deliver the right capability for the women and men of the ADF, job creation through Australian business and the upskilling of the defence industry. The Morrison government is backing the Australian defence industry, especially the role of small and medium business in its success.

12:45 pm

Photo of James StevensJames Stevens (Sturt, Liberal Party) Share this | | Hansard source

I start by commending the mover of the motion and also the contribution that was just made by my good friend the member for Moncrieff. The defence industry has been transformational, particularly for small businesses, since the coalition were elected in 2013. I think it's important to start by reflecting on how we've gotten to where we are right now, because the point the member made is quite right: under Labor, for six years, not a single capital ship was commissioned for the Royal Australian Navy. By contrast, since we've been in government, since 2013, we've made important decisions on the Attack class submarine, the Hunter class frigate and the offshore patrol vessels as well as the Pacific patrol vessels that we're producing for our friends throughout the South Pacific.

Those decisions have been transformational for so many small businesses across the country, particularly in my electorate of Sturt. I have a business called Supashock in the north of my electorate. They've always been in my electorate, but they've moved to new premises in the north of my electorate because they're expanding. They're participating in the Land 400 and Land 121 programs through the supply chain for the Rheinmetall vehicles that are now being constructed in Queensland. They're pursuing many other opportunities in defence, in those programs and other programs, at the moment. That's just one example of the many businesses in my electorate that are benefiting from these decisions.

In South Australia, of course, the naval shipbuilding decisions are the most significant. Later this year, we should see steel being cut on the first prototypes for the Hunter class frigate at Osborne South. The shipyard there is progressively being handed over to British Aerospace, who, of course, were selected to build the nine frigates. With the cutting of steel later this year, we'll then move into production of the first of the class next year, in 2021. That, of course, is on track. It was very exciting to have visited there recently, a few weeks ago, to see what's happening on site. British Aerospace are the selected company, but there are small businesses associated with building the shipyards—the small businesses that will be a part of the supply chain. All the various supports that BAE need on that project are mouth-watering for South Australian businesses. We're already seeing some contracts bear fruit for those businesses. They're hiring new people because they need to expand because of the opportunities that they're getting from that decision.

The submarine contract for the Attack class submarines is even more significant than the one for the Hunter class frigates. We're building 12 of the submarines in South Australia. The shipyard north of the frigate yards, also at Osborne, are pouring cement as we speak. We're going to start seeing those buildings coming up on the horizon of Adelaide. It's a great proof point for the opportunities that young South Australians are going to have in the future in the defence industry because of the decisions this government has made to ensure that we've got a sovereign defence industry capability in Australia.

That's shipbuilding, but decision have been made in all areas of defence industry. When it comes to land programs, I mentioned the Land 400 and Land 121 projects that are being commissioned in this country to produce and create a sovereign defence industry capability for generations of Australians into the future. This is important for our national security. It's also important for our industrial capability and the future of our economy. Defence is always going to involve decisions of extreme magnitude. Many, many billions of dollars around these programs are being spent. We want to spend that money in this country. We want to spend that money in a way that creates opportunities for Australian businesses and also in a way that creates jobs for young Australians.

That's one of the really important things for us to do. I certainly take the opportunity, whenever it's presented to me, to talk to young Australians about the opportunities that they will have in their future through the decisions we're making in the defence industry. That's the exciting career pathway that young Australians can look forward to, thanks to the decisions that we're making. There will be tens of thousands of new jobs created in the defence industry sector in years to come because of the important, strong decisions that we have made and will continue to make to resource the armed forces with the capability that they need and deserve and produce that capability in this country so that we're also creating an economic dividend from that expenditure. I commend the motion.

12:50 pm

Photo of Jason FalinskiJason Falinski (Mackellar, Liberal Party) Share this | | Hansard source

One of the disadvantages of being the last speaker on a motion such as this is there have been so many good speeches prior to me that they've taken all the reasonable material that you can possibly be expected to say on this! I want to commend the member for Herbert. I have not served my nation in the armed forces, and I have an admiration and respect for those people who choose to voluntarily put their lives on the line so that this nation may continue to be a free and fair nation. Our freedom is a direct result of their sacrifice, not just those people who have served in the armed forces in this parliament but who have served in the armed forces throughout the ages. It is, indeed, the ultimate sacrifice that you can make. The member for Herbert has done that and, as the member for Moncrieff pointed out, at great personal sacrifice both to himself and to his family. That he chooses to serve his community and our nation now in this place is both a testament to him and a testament to this parliament.

The member for Stirling also has served our nation, incredibly admirably. I think the most extraordinary thing about the member for Stirling is the process he went through in applying to be a member of the Special Air Service, the SAS. The SAS was only expecting their usual attrition rates. They started off with 50 people, expecting only to have five or six left at the end of it. Unfortunately, in that particular batch, there were 14 people who made it through what sounds like hell on earth, if the truth be told. So he was drawn out of a hat and told that despite having gone through the process of the six or seven weeks of applying for the SAS he wouldn't be accepted, because too many people had done too well in that particular group. That, I think, is an extraordinary sacrifice. But his contribution to this debate cannot be easily forgotten, nor his contribution to our nation.

The member for Moncrieff, the member for Sturt and the member for Lyons have all pointed out the extraordinary benefits of this unprecedented growth, in peacetime, of expenditure on armed forces hardware. In my electorate, we have HIFraser, Universal Seals, North Sails and Incat Crowther, who have designed an incredibly innovative naval craft that is being used in the US. It is being built by Birdon, which is in the member for Lyons' electorate. The point the members for Moncrief and Sturt have both made is that it's not just the work and the number of people who get employed through this process that's important, it's the research, the design, the development of the intellectual property here in Australia. This program, this unprecedented build-up in military expenditure, is allowing those companies to do this.

One hastens to add that a lot of the intellectual property that Birdon has been able to develop in their $¾ billion contract with the US Navy has gone into their contract with Sydney Ferries, where they've developed new ferries here, in Australia, for public transport. So they will be combat ready, if ever they are needed to—that, of course, is not true. I just thought I'd throw that in. In any case—

Hon. Members:

Honourable members interjecting

Photo of Jason FalinskiJason Falinski (Mackellar, Liberal Party) Share this | | Hansard source

Well, you guys weren't reacting. I was a bit concerned that you were taking it seriously! The member for Gellibrand made an extraordinarily good point, which is that, increasingly, the threats we will face will be those on the internet. There'll be cybersecurity threats. I think, of the iPhone and smart phones generally, which were based on 11 key pieces of technology, they were all originated and developed by DARPA, the US military's secret unit, Defense Advanced Research Projects Agency. I honestly believe we can use this program to ensure that we are able and allowing companies to move forward and develop IP, especially in artificial intelligence, that will put Australia at the forefront of the coming revolution, in that particular part of the economy. It's incredibly important we do that, because it will be very disruptive and we need to be at the forefront of it. I commend this motion to the House.

12:55 pm

Photo of Ian GoodenoughIan Goodenough (Moore, Liberal Party) Share this | | Hansard source

There being no further speakers, the debate is adjourned and resumption of the debate will made an order of the day for the next sitting.