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

I present the second interim report of the Foreign Affairs, Defence and Trade References committee on the impact of defence training activities and facilities on rural and regional communities.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

I seek leave to have the tabling statement incorporated in Hansard and to make some additional comments.

Leave granted.

The document read as follows—

I rise as Chair of the Senate Foreign Affairs, Defence and Trade References Committee to speak on the second interim report for the committee's inquiry into the impact of Defence training activities and facilities on rural and regional communities.

The committee has decided to table interim reports after regional hearings so local communities don't have to wait until the final report from the committee for the issues in their area to be highlighted. This report covers public hearings in Rockhampton and Townsville.

The committee was pleased with the level of engagement by the Department of Defence during these hearings and the willingness of officers to acknowledge that there is room for improvement in their engagement with local communities.

Policy framework

The 2016 Defence White Paper sets out a number of investment projects in QLD particularly upgrading the Shoalwater Bay Training Area, redeveloping the Townsville Field Training Area and upgrading facilities at RAAF Base Townsville and Lavarack Barracks.

In addition, there is the investment from Singapore of up to $2.25 billion in the expansion of the Shoalwater Bay and Townsville Training Areas.

Government ministers have emphasised the new investment in Defence will create jobs across the regions and bring benefits to local businesses and communities.

These policies and statements from the government have generated expectations that regional Australia will be able to benefit directly and indirectly through the participation of local businesses, particularly SMEs, in building defence capability.

Focus of the committee

The focus of the committee has been to investigate whether regions, local communities and businesses have sufficient awareness of and effective access to information about the plans to upgrade training facilities so that they can be in a position to offer goods and services.

The committee also explored communication by Defence with stakeholders in the local communities who will be affected by upgrades or expansion as well as communication about existing training activities. In addition to looking at channels of communication the committee spoke with businesses currently working with Defence in an effort to provide guidance for other businesses looking to engage.

Rockhampton hearing

The committee held a hearing in Rockhampton on 12 July 2017. The Shoalwater Bay Training Area is a category 1 training area with Rockhampton as the closet regional centre. Exercise Talisman Sabre is a biennial Australia and US training activity conducted at Shoalwater Bay and other sites in the NT.

The committee was pleased to hear the overall message that the Defence presence is welcomed and supported. The committee would like to see Defence capitalise on this goodwill as well as the local knowledge, experience and skills.

The committee recognises that Defence cannot source everything it needs locally as do the local communities. However, the clear message from the hearing was that local businesses wish to have the opportunity to be fairly considered when Defence is sourcing goods and services.

Communications mechanisms

The committee heard about a number of regional forums such as Capricorn Enterprise which engages with Defence and provides information and workshops to develop local capacity. In order to look specifically at opportunities in relation to the Singaporean investment the Capricornia Business Advisory Alliance has been established. The committee was pleased to hear that Defence is open to being more involved in localised processes.

Exercises

A key issue raised with the committee was communication regarding exercises. It was explained to the committee that it is crucial for landowners to be notified of exercises conducted in airspace as some graziers have light aircraft or helicopters, or engage contractors, for mustering. In addition, there was a call for better consultation for noise and plane activities over animals, especially cattle at weaning time. Defence acknowledged the impact of aircraft noise on the local community and outlined the steps being undertaken to address the issue.

Land acquisition

A key issue for the Rockhampton community was communication about the proposed expansion of training areas and land acquisition. The community was profoundly disappointed about the processes undertaken and level of consultation by Defence. Witnesses were also concerned that Defence engagement had only been with the landowners, and local business which would be potentially affected by the expansion plans, were not considered to be stakeholders. Defence indicated that they have learnt from the process and advised that a local community engagement officer has now been appointed who will be based in Townsville.

Land management

Land management of training areas was another issues raised with the committee. Defence confirmed that two people used to be based locally in order to deal with issues around the Rockhampton estate. They were relocated to Townsville around 2 years ago but are still available to be contacted about issues. However, Defence indicated that they will review the arrangements going forward in light of Talisman sabre exercises and the partnership with the Singaporeans.

Indigenous business

The committee heard about limited engagement with Indigenous businesses and that the size of the businesses could be a factor affecting the level of engagement with Defence. Defence noted the growth in Defence Indigenous procurement in the last two years and spoke about recent initiatives.

Townsville hearing

The committee held a hearing in Townsville on 14 July 2017. Townsville is a major base for defence facilities and hosts four major Defence establishments. The message was that Townsville was proud of its historical and current military role and there is strong support to sustain and expand Townsville's capability as a base for ADF operations and personnel.

Communication mechanisms

The committee heard about some communication mechanisms in place which are working well to facilitate local business engagement with Defence and planned arrangements designed to enhance engagement. In particular, the Townsville City deal will improve visibility for local businesses about defence industry investment in Townsville and encourage local business involvement. A Townsville Defence Liaison Officer position has been created and the council is in the process of appointing someone to that position.

The committee was told about a Defence community stakeholder group where there may be an opportunity to strengthen the agenda beyond relationship building.

The committee was please to hear that Defence has no issues being involved in localised communication processes.

Business experience

The committee heard from some larger companies which had secured contracts with Defence and were utilising local businesses where possible. These companies generally indicated that they have had positive interactions with Defence. However, smaller businesses advised the committee of the challenges they face in getting information about opportunities and navigating Defence's procurement processes.

Engaging with Singapore

A cross departmental group involving all levels of government has been set up to discuss preparation for capturing opportunities from the Australia-Singapore Military Training Initiative. This is a semi formal operational level group convened by AusIndustry in partnership with Defence representatives. It looks at providing and sharing information, raising issues about how to get companies Defence ready, how to capture the opportunities and how to manage expectations.

Rates

While the contribution of Defence was acknowledged Defence does not pay rates. The loss of rateable land due to the presence of a Defence establishment and the impact this has on council's income base was raised. This effect would be exacerbated by any further uptake of land by Defence, noting the burden placed on smaller councils.

In particular, the burden placed on local government managing large road networks which are impacted by the size and volume of equipment operated by Defence was mentioned. It was noted that this will only increase with an enhanced presence.

Land acquisition

Land acquisition was also raised with the committee in Townsville by a number of graziers affected by the proposed expansion. All were highly critical of the failure of Defence to adequately consult with the local community on the proposal which resulted in a high level of stress and anxiety. Defence acknowledged the evidence from the graziers and confirmed that there would be no acquisition of land unless the seller is willing. The broader economic and social impacts on the region from the proposed land acquisition were also raised. Defence indicated that there was no automatic process for compensation but it would be open to anyone to make a claim.

Recommendations

The committee has made recommendations:

The committee has welcomed the recent announcement by the Minister for Defence of the Local Industry Capability Plan pilot which aims to provide local industry with more opportunity to participate in major Defence infrastructure projects. Two of the three pilot projects are in QLD: the Shoalwater Bay Training Area Redevelopment and the Townsville Field Training Area Mid-Term refresh. The committee looks forward to seeing the outcomes of this new approach.

Once again I thank committee members for the bipartisan approach to this inquiry. In August the committee held hearings in Darwin and Katherine and there will be a separate interim report to cover those hearings.

I commend the report to the Senate.

This report originated out of some representations from the Upper Spencer Gulf mayors who came to Canberra and said: 'We have a great disposition towards Defence. We love them in our community, and they do bring some economic activity, and we would like to see it improve.' Out of that sort of conversation, and given that Cultana was on the expansion footing, so to speak, we sought the Senate's leave to do a report. And how we've been conducting the report is quite straightforward and simple. We are producing an interim report at the end of each series of visits and/or hearings. So we produced a report in the Upper Spencer Gulf. This report is in relation to Townsville and Rockhampton. We followed a very similar framework and format.

Basically, there is good policy here. Right at the minister and the Prime Minister level, there are good, transparent statements about what should happen. There are clear, unequivocal, concise statements about the effect investment in regional economies and regional communities should have—a net positive outcome. We thought that we would find plenty of evidence that this is true. Disturbingly, the evidence isn't quite as clear. The evidence is that the money has been spent, but the evidence that we're seeing is that it's not sticking, for want of a better description, to the local economies and/or communities. We're making some abundant and clear recommendations in respect to this. I think it's really important to put on the public record that the Minister for Defence has got onto the front foot, particularly in the statement she made in the Northern Territory recently, with smaller packages of work and a better effort to get all of the opportunities from competitive tension from good local businesses into the equation. I think that is very good work.

The simple and clear recommendations we're making here is that the most efficient communication mechanism should be in place. There should be an effective flow of communication between the respective entities, which will generate potential business opportunities. We need to ensure as much information about training exercises is disseminated as possible. We need a contact point for local communities and local businesses, with either economic opportunities to pursue, environmental concerns to pursue or just some general information. They need to be abundant and clear, and easy to find and easy to contact. I think, importantly, in the Rockhampton area there's a need for an independent economic impact assessment of the loss of rateable land which may occur, if the huge expansion that is proposed there goes ahead in the format that it is in.

The evidence is really clear that the local communities are very, very supportive of Defence. They are keen to take opportunities economically and in all areas of value. But it's not quite happening. It isn't quite happening. The transparency that's required is not there. The tier 1 contractors rarely win the work. The job of engaging the local community actually goes to the tier 1 contractor. It is not coming to fruition. I wasn't going to be at all political about this particular inquiry because I think it's very useful work done by a bipartisan committee that is delivering good, effective review processes. But I read in Adelaide's The Advertiser today that the Department of Defence is deserting regional SA—it is from no less than the member for Grey, Mr Rowan Ramsey. He is quoted in the paper as saying:

REGIONAL Australian businesses, particularly those based in South Australia’s Upper Spencer Gulf, are being "ripped off on a regular basis" when it comes to securing Department of Defence work…

That's what he is reported as saying. I'm not used to seeing Mr Ramsey use such language myself, but he's reported as saying we've got a real problem.

Suffice to say the evidence we are collecting is widespread. The concerns are widely held and deeply felt. We need to do a better job here. The investment is critical to Australia's defence and Australia's economic future. To get regional businesses more in tune with the opportunities in Defence is good for regional employment, it's good for all of the tier 1 sectors that we're looking at and, I think, it's in tune with the Prime Minister and the defence minister's policies.

We look forward to pursuing this inquiry through to its fruition, so to speak. We look to having, along the way, actually achieved some regional impacts in the economy, environment and the social cohesion around the Defence networks. I seek leave to continue my remarks.

Leave granted.