Wednesday, 10 May 2023
Report No. 21 of 2022-23; Consideration
That the Senate take note of the document.
Sometimes, when you're looking at the way in which the Department of Defence and defence procurement is oversighted in this place, there are moments when powerful and loud truths are told. Sometimes there's a document or a moment when you suddenly look under the bonnet and see the way in which this institution, the parliament, fails to oversee what is now a $50 billion a year national expenditure on defence. With the tabling of the performance audit on the Department of Defence's procurement of Hunter class frigates by the Audit Office today, we suddenly lifted up the bonnet and had a look at how it all worked. It was a sorry tale, because, in a project for the Hunter class frigates, which has a current price tag of more than $45 billion, it turns out that, when the Department of Defence entered the contract for a $45 billion project, they got a number of tenders. There were three quite competitive tenders: one from BAE and a couple of others. They said to the government, 'Oh, we're going to do a tender process; don't you worry about it,' and they set out the documentation. Obviously, a core part of a public tender process is checking for value for money. Will this deliver what we want for value? In fact, it's hard to think of a more important element in a public tender process. They said, 'Does it deliver value for money?' That's what they said they test for. They handed the document to the minister, and they handed the document to the secret oversight committee, and they said, 'That's what we are going to do.' Then they went away and signed Australian taxpayers up to a $45 billion project without ever checking for value for money. They never did it.
They never assessed the three competitive tenders against each other for value for money. They just signed off on the current project without ever checking, and then they forgot, or they failed, to tell the government that they'd never checked for value for money. They never told the government. I find it even more astounding that nobody in the minister's office checked, nobody in the coalition government checked and nobody in the Labor opposition checked. They have access to secret documents in their secret committee, and they all come together in their secret committee and think they're very important. They see people with brass clips on their shoulders and feel they're in some secret club, and not one of them ever asked whether they assessed a $45 billion project for value for money. Has it delivered value for money? Absolutely not. It's already 18 months delayed. It's already half a billion dollars over budget, which doesn't include the 95 contract variations they've had to enter into to try and make the thing bloody well float.
The original contract provided for a frigate that turns out to be inadequately armed and inadequately defended, so they keep tacking things onto it: more missiles, more ammunition and more antisubmarine warfare project material. They keep tacking new things onto it, so now it's so top heavy you can't take it out to sea. If you put it out in a heavy sea, it will tip over and capsize. We're going to have six Hunter class frigates that'll only be able to be put out on the lake at the front of Parliament House. Did I mention it's a $45 billion project?
What is clear from the Audit Office is that we've got a bunch of amateurs in there—or a bunch of noddies or a mixture of the two—signing up the Australian public to billions and billions of dollars of expenditure without even doing the most basic due diligence. And if you want a shiver to go down your spine as a young person in this country or as a taxpayer in this country, this is the same bunch of noddies who have just been given a blank cheque for half a trillion dollars or more, where they say they'll be able to deliver some submarines by 2060. Heaven help the Australian public!