Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I too rise to take note of the minister's statement in response to the order this morning. I want to say at the outset that this is the work of the Senate at its best. Scrutiny of the government by the opposition and the crossbench parties is at the heart of good government, I would say, and Senator Carr, Senator Patrick and former Senator Xenophon have led what is actually an extraordinary pursuit of the production of documents which go to the heart of the integrity of this government and a $35 billion expenditure of taxpayers' money. And there should be scrutiny of that level of expenditure.

There is concern in South Australia, amongst small to medium enterprises and larger enterprises, about the government's bona fides as to Australian content, and rightly so. I mean, this is the government that walked away from motor vehicle manufacturing in our state and, basically, exhorted them to cease operation and shoot through. There was a proposition at one time to buy off the shelf—to not have, particularly in this area of submarines, any Australian content or any Australian involvement.

We have all seen, in estimates, that departments regularly use the public interest immunity argument to cloud or not clarify the most mundane questions; in fact, it seems to be a public service trait that's developing more and more under this government—that you simply claim public interest immunity, commercial-in-confidence, security or whatever just to avoid answering the most simple questions. Senator Carr said, in his contribution, in regard to the minister's proposition that the Senate asked for the disclosure of particular commercial-in-confidence details, that that was simply not true, and the minister has sought to assert that proposition, but what this return to order actually asked, if the government thinks that, is: how are you going to be able to produce capability documents later this year, which public servants have said they will be able to produce, when you can't tell us at the moment what 'sovereignty' actually means?

We know that there have been propositions of up to 90 per cent of Australian content, and, as Senator Patrick has said, that has diminished under Minister Pyne to 60 per cent, and now, though he has said 60 per cent, we see a document with 50 in it. We know that there are large, successful organisations. Austal certainly are—they actually compete and win, and build ships for the US Navy, and I think their CEO told me that they're the only one since the Civil War that has actually been able to do that. So they are a large, successful entity. They are Australian. But they're not at the forefront of this process; they're down the queue a bit.

We know that ASC, after years of hard work, has achieved—even under the government's assessment now—world's best practice in shipbuilding. I well remember, under Senator Johnston, the audit that came out that actually said the workforce at ASC could not be criticised for a lack of productivity. It was because Navantia and the designers had put up plans which meant that, in the words of the audit's authors, the workers had to do the job once, twice and sometimes three times. So to criticise the workers' productivity was absolutely disgraceful, because it was in the design and the foreign planning of all of that that the lack of productivity was evidenced.

So it appears as if there is a contest—and rightly so. There should be a contest. On our side we want clarity, transparency and maximum Australian involvement in all facets of this $35 billion spend—in all facets. Every small to medium enterprise in the country should get a guernsey in competing for this work. Every large enterprise that is competent and in this space that is Australian owned should get a guernsey in this $35 billion. But that's not what we have. What we have is the dry economic rationalists in this government, who didn't want to have Australian involvement at all, pushing parameters around so that, they figure, they might keep costs down. I'm not convinced about that. I'm not convinced that a sovereign capability, an indigenous capability, in Australia won't deliver the best outcome. I'm not convinced that we don't have the wherewithal in Australia to design, build and do great things in manufacturing. I'm certain that Senator Carr would be much more eloquent than me on this point. We actually do believe that we can make things well. We can use Australian products. We may have a design capability shortfall at the moment, but there's no shortage of intelligence and brains in our universities to go on and develop that space.

But what we have here is a minister who said the world would fall down if we knew what was in that document and who now says: 'Okay, we've moved a bit further down the path on tendering. It's okay to release that.' But, from the documentation, it looks like her own department didn't agree with her. On referral, they checked it and said, 'We should release this,' and 200-plus pages were released. So is there a contest on that side of the chamber between Minister Pyne and Minister Payne? Is there a willing, cooperative working relationship there or not? Yesterday in question time, my question to the minister was: 'Is it 60 per cent or 50 per cent? Which is right: the tender document or Minister Pyne?' And where are these percentages coming from? Is anybody able to sit down and put a factual, fiscal, evidentiary base under what will actually drive the Australian content argument?

I think every dollar in this $35 billion should be tested against a competitive process to maximise Australian dollar involvement. And, if it comes out that we can't do it for the achievable price, then that's an appropriate decision that a government would make. But there's no clarity on that. There's no process for testing it. How do small, medium or large enterprises actually know, when there is this arbitrary figure plucked out of the air and put into tender documents? Where is the evidentiary base for that?

There are people who say that the former secretary of Defence was all for outsourcing and buying off the shelf and that the ministers have been dragged into building locally for electoral reasons, particularly in South Australia—and it may be that Minister Pyne's own seat depended on the fact that we built submarines in South Australia. As the major factional leader, it may be that all of his flock in South Australia were under the pump electorally. He was able to convince the government to build locally, and we welcome that. It's a great decision to invest in manufacturing in every state in Australia, particularly in South Australia. We know, with the nature of exactly-on-time logistics and manufacturing chains, that there probably won't be an electorate in Australia that doesn't get a benefit out of this $35 billion.

But the average Australian voter understands maximising Australian content. They don't like or don't see how a government in a tender process can pick a figure out of the air—Minister Pyne will tell us 60 per cent, the tender says 50 per cent, and you've got industry professionals saying they put in at 90 per cent. Is this just a simple economic rationalist contest on that side of the chamber? Are Minister Pyne and Minister Payne fighting? Are the Treasurer, Minister Morrison, or the Prime Minister, the Hon. Malcolm Turnbull, putting some arbitrary criteria in here? Or are we simply going to do what we should be doing, which is building sovereign, indigenous capability and having manufacturing sustained into decades in places where we sorely need it? That's the objective that everybody talks about. But, when, through this process, you find the detail of the tender documents, it appears as if people are making interesting arbitrary decisions about Australian content.

I think that this is, as I started to say at the outset, exceptionally good work of the Senate. This is proper Senate work and proper scrutiny of a government and an extraordinarily large procurement decision into the next few decades. We all want, and I presume those on the other side want, maximum Australian involvement. It would be counterintuitive to believe otherwise. But they're not, in an evidentiary way, proving that. The simple fact is: this minister—as Senator Patrick has said and as Senator Xenophon has said—and, I will go as far as to say, the previous ministers have been obtuse, recalcitrant and not open and transparent with the Australian public or the Australian Senate, and that's not good government. That is not good government. If their argument stacks up financially, fiscally, then everybody with an ear or an eye will look at it, read it, absorb it, test it against common sense and/or the marketplace and they will probably win the argument. But they're not even mounting the argument; they're hiding behind public interest immunity, commercial-in-confidence, security issues. I have to say, as the Chair of the Foreign Affairs, Defence and Trade References Committee, that's an argument I've heard a hundred times at estimates. You hear it all the times in inquiries. Public servants are well skilled at hiding the true motivation of their ministers and, in a lot of cases, the department. That needs to change.

I do welcome Senator Patrick's call that the President or the Deputy President actually look at the performance of ministers who, in an evidentiary way, subsequently appear to have failed a public interest immunity test, because if their own department is saying it's okay to let this stuff go then we need actually to test why the minister didn't accept that at the first call.

So with those few words I would like to finish by saying: I can speak for South Australia; the maximum amount of Australian content is a burning issue given the treatment of the manufacturing industry in that state. You have a once-in-a-generation opportunity to rebuild out of the destruction you caused in motor vehicle manufacturing, the demise of that. So let us get this right. Let's get a really high bar on Australian content—not 50 per cent or some arbitrary figure; let's get our real industry capability assessed and let's get, if we can, 100 per cent Australian capability. If we can't, let's work out what we don't do well, what we can't do efficiently, and contract it out—fine; everybody accepts that. We do some things really well, but we've got a chance here to build, into the future, sovereign capability and indigenous capability in all facets of this project. We shouldn't, at the start of $35 billion worth of expense, say we're only going to do 50 per cent of that.