SUBJECT: Defence White Paper
SENATOR STEPHEN CONROY, SHADOW MINISTER FOR DEFENCE: Thank Labor strongly supports the peaceful rise of China. Labor does not believe that China's rise will lead to an inevitable choice between Australia's alliance with the United States and the growing relationship with China. It's important to acknowledge that our relationships with both differ. Our relationship with the United States is long and deep, and our relationship with modern China is only just developing. We can expect China to want a greater say in existing global and regional arrangements and institutions and to promote new arrangements and institutions which reflect its interests. But trust and confidence will require China to demonstrate a commitment to supporting the international system of laws and norms from which both our countries have directly benefitted.
As a maritime trading nation, Australia has a direct interest in freedom of navigation and is the beneficiary of an international system of laws and norms – a system that is under increasing pressure in the South China Sea. Labor is united in its view that the tensions in the South China Sea should be resolved peacefully and in accordance with international law. Labor also believes that Australia and other like-minded countries have an obligation to act in support of international law and norms in the South China Sea. It's important that these actions not be directed at any single claimant, consistent with our longstanding approach of not taking a position on competing claims. It is critical that Australia continues its diplomatic efforts to encourage a peaceful resolution to the disputes in the South China Sea. Australia is entitled to operate anywhere in the world in accordance with international law and norms and specifically the UN Convention of the Law of the Sea. Our defence force should be authorised to conduct freedom of navigation operations consistent with international law. The details of operational activities conducted by our defence force are, of course, a matter for military planners, not politicians. Given that the Chief of Defence Force has confirmed that the ADF is not authorised to conduct freedom of navigation operations, the Turnbull Government should just come clean about what its policy in the region really is. The militarisation in the South China Sea does not contribute to the de-escalation of tensions in the region. Just yesterday we have confirmed that China now have aircraft on Woody Island and I would call on the Government, the Minister for Foreign Affairs, to call the Chinese Ambassador in and ask them what is going on. What explanation is there for this activity?
Now, at this point I will pass over to David to talk about particularly the ship-building sector.
DAVID FEENEY, SHADOW ASSISTANT MINISTER FOR DEFENCE: Good afternoon. On the 20th of September last year, Kevin Andrews in one of his final remarks as he left the office of the Minister of Defence said; “the Defence White Paper is finalised and ready for release.” The fact that some five months later, today is the day that that document - finalised and ready for release in September of last year - is released today is of course because the Prime Minister is seeking to avoid a tax reform debate.
As someone who is very passionate about the Defence conversation, the fact that the Defence White Paper is being released in that way and as a shield is a great disappointment. As Stephen said, we will have a more substantive response to the White Paper in due course, but let me make some initial comments.
Firstly, I think it's of interest that with respect to the submarines the White Paper and the Government is talking about a ‘rolling acquisition’ rather than a ‘continuous build’ and that language very plainly leaves it open for this Government to buy those submarines from overseas and for them to be built overseas. That's very significant, because while we are obviously very pleased that the Government has signalled that it is going to seek to 12 rather than eight submarines, and that is important retreat by this Government, we still remain very committed indeed that these submarines should be built in Australia.
We hold that view because the submarine enterprise in this country is of enormous strategic importance to this country. We will continue to fight for those submarines to be built right here in Australia. The fact that the Government has now nominated 12 submarines rather than eight has another significance; and that is that the Competitive Evaluation Process that the Government initiated asked the tenderers to calibrate their bids for eight. So the material that is now presently before the Government is entirely designed around the number eight, not 12. The fact that the goal posts have shifted is of significance, and we welcome that shift, but it is another blow to the credibility of the Competitive Evaluation Process. The fact that the number is 12 strengthens the case for a local build and it strengthens the case for there now to be a critical mass for a continuous build of submarines in this country. We have three companies – two companies and Japan – that have tendered on the basis that it be eight, and the fact that the hybrid build is now less competitive, the fact that the local build makes more sense will not be reflected in the material they give to Government. This is of significance and it means the Competitive Evaluation Process coming to Government is calibrated for a set of conditions that no longer exist.
In terms of what the Defence White Paper had to say around Defence industry and innovation, let me make this observation; we have seen the Government collapse 35 existing programs into two. This represents a rebranding exercise, but it does not represent a new commitment of resources to the task of building Australia's defence industry or innovation. It is not only not an increase in money, but it is not an increase in the scope of work, so while the Government might be engaged in a marketing exercise, we are not seeing a substantive public policy announced today in the field of Defence industry. And let's remember the Defence, Science and Technology Group of Defence continues to have to wear cuts and those cuts, as best as we can tell, have not been restored.
The Government has made much of its new integrated investment plan and made much of the fact that there is now a 10-year horizon for defence planning. I would simply make the point that this is not new. The previous Labor Government offered a Defence Capability Plan that went six years beyond the Forward Estimates; it, too, was a 10-year horizon. The most significant thing is not the fact that there is a 10-year plan before us - that's not new - the most significant thing is that this is the first one we've seen for three years and for three years we have had rolling uncertainty across Defence industry and that has produced job losses and failure of investment. In particular, we've seen 1500 jobs lost across our shipbuilding industry and we know many, many hundreds more will be lost in the coming days. This really is a Government trying to restore confidence in an industry sector it itself has broken.
Lastly, let me respond to the Prime Minister’s assertion at the end of his press conference that Labor had neglected the Navy. This is a grotesque distortion that cannot be allowed to go unremarked. When we came to office, the previous Labor Government confronted a number of significant challenges, all of which were the fruit of systemic under investment by the previous Conservative Government. Let me quickly take you to them: Firstly, the Collins Class Submarine. You will remember that its readiness had fallen to dismal lows and Labor confronted the challenge of making a significant investment in those submarines. The Coles Inquiry, a reform process, an increase in the sustainment budget of those submarines from $250 to $500 million, and the fruit of that endeavour of course was an improved performance and improved level of readiness that has been so successful that this Government and the Conservatives have abandoned their favourite hobby of bagging the Collins Class submarines - you haven't heard them do that for a while - and that submarine was successfully remediated. That of course was a significant accomplishment and it repaired the years of neglect that we confronted.
Under Labor, Australia's shipyards were working at capacity. They were working at capacity on a range of projects, including of course, the Air Warfare Destroyer project; a project that required significant remediation: a project that required re-baselining: a Howard-era project that required a significant effort from Government. Our plan was that the shipyards were not only working at capacity then, but they would continue to work at capacity, and our plan to make that happen was of course to have Navy replenishment ships built here in Australia, in our shipyards. What happened to that plan when Tony Abbott came to office? He dumped it. He announced that those ships would be built overseas. He specifically excluded Australian shipyards for tendering for that work and they were designated for South Korea or Spain. It is now a matter of history - 20 months later the Government still has not made a decision about those ships, we still don't know where they going to be built and that question remains unanswered in the Defence White Paper today.
Let’s also remember when Labor came to office previously, we found our amphibious capability had fallen to a terrible state. We found that HMAS Kanimbla and Manoora were unable to go to sea and do the work required of them. Labor found itself dealing with a fleet that had fallen to such a state of disrepair it could not go to the assistance of communities in Northern Australia when they faced cyclone and flood. We had to remediate that embarrassment, in part with the help of our New Zealand colleagues and with the loan of the HMNZS Canterbury, and also in later months working with the Spanish and the Cantabria, a replenishment ship from the Spanish Navy working here in Australia. So the allegation that Labor neglected the Navy is not only an appalling and grotesque distortion, but readily disproved and of course our commitment to the modernisation of the Navy, all of our services and the joint capabilities of the Australian Defence Force are absolutely very, very strong indeed.
Thank you very much.
CONROY: Now I’d just like to ask Gai to talk on a couple of areas.
GAI BRODTMANN, SHADOW PARLIAMENTARY SECRETARY FOR DEFENCE: Thanks very much Stephen. Thanks very much for coming along today.
Yesterday it was 5,000 additional ADF personnel, and today it’s 2,500. Labor is broadly supportive of these additional 2,500 personnel. From what we understand it’s across all three Services. That said we remain concerned about the continued attack on the public service, the Defence public service. Since this Government was elected there have been thousands of public service jobs lost in the Defence Department, and these attacks continue. So we are concerned about the sustained attack on civilian public servants, despite the fact that we have these additional ADF members.
We’re also concerned about what these 2,500 ADF members are going to be doing. Are they going to be filling those gaps where civilian jobs have been axed? We’d be interested to know the detail of what those 2,500 ADF members will be doing.
We are going to be keeping a very close eye on whether they’re going to be deployed to areas where civilian jobs have been cut.
We’re also heartened by the fact that the Government has made a strong commitment to retention and a commitment to quality work and decent pay and conditions. As you know this Government cut ADF pay and conditions and it was only thanks to Labor that those pay cuts and condition cuts were reversed.
We’re going to be keeping a very close eye on what the Government’s doing on retention. We’ve got the ongoing enterprise agreement that’s being negotiated - it’s taken years to negotiate - on the civilian front. That is actually being voted on at the moment, it’s being voted on today and over the next couple of days, and so we’ll be holding the Government to account on ensuring that civilian pay and conditions are not in any way cut or eroded.
We also welcome the Government’s commitments to Labor’s initiatives of Project Suakin and also the Pathway the Change project – a major program designed to create diversity, inclusion and cultural change in Defence.
And finally we welcome the Government’s commitment to the non-sale of DHA.
The White Paper talks about the value of DHA to Defence families, to the Defence community. We welcome the Government’s commitment not to sell DHA and again we will be holding the Government to account on that.
Thanks very much.
JOURNALIST: Would delaying the return to a budget surplus be justified considering the level of Defence spending needed and the fact that the cost of building the submarines seems to have been grossly underestimated?
CONROY: Well I think the hypocrisy of the Government when it was in opposition, when it continually attacked Labor for not being able to bring the Budget back into surplus, is now exposed. It is one of the great lies that they told before the last election - Joe Hockey, Barnaby Joyce: ‘we’re heading for Greece’ ‘debt’s going to kill the economy’ ‘debt’s going to do all of these things.’ And yet this is a government that admitted last week – before these figures were added in – basically they’ve saved $80 billion and spent $80 billion. And now they’ve spent more. So they’re actually in the negative - they’re spending continues to be well outside their revenue.
We’ve put forward budget repair measures. We’ve put forward a tax on foreign multinationals. Their tax will raise almost nothing – it is a joke. We need a real tax on multinationals. We’ve talked about superannuation at the high end. We’ve talked about tobacco taxes. We’ve talked about capital gains and negative gearing.
This is a government that likes to talk about repairing the budget but actually when it comes to crunch is missing in action. His hypocrisy around budget matters is just laid bare every single day.
JOURNALIST: Senator Conroy, Bill Shorten was asked yesterday about those exercises, freedom of navigation, within 12 nautical miles of those disputed islands in the South China Sea. He said ‘if our military people feel that that’s necessary then they’ll get Labor’s backing.’ Do you agree that it’s a decision that the military takes?
CONROY: No, I think you’ve misrepresented –
JOURNALIST: That’s what he said.
CONROY: No you’re misrepresenting what he said. Bill and I are in absolute agreement. We’ve made it very clear that we believe it should be authorised, and then as an operational matter we take advice from the military.
So I think to try and misrepresent what Bill said yesterday – to try and pretend there is some sort of division, it’s simply not true.
JOURNALIST: I was quoting him directly word for word.
CONROY: I know you are, and I am aware of the story that ran. But we’ve been very clear we’re on the same page and that we would authorise, that it should be authorised, it should be on the table, it should be an option and then we take advice from the military on the actual operational issues.
JOURNALIST: Senator Conroy what would happen to the Competitive Evaluation Process for the submarines if Labor is elected mid-year or later in the year? Would it be scrapped?
CONROY: No. We’ve said all along that we don’t agree with the process. We don’t agree with the way it’s being conducted. We have deep concerns about down selecting to just one company. All the advice from the experts, from Warren King to independent experts, says this is a deeply flawed strategy and it will not be the best outcome for Australian taxpayers.
We’re very concerned and this is something we explored in Senate Estimates and I explored with the Minister yesterday about why the Government felt the need to reopen the tender, the competitive process, after each company had put in their final bid. They actually reopened it. We asked the questions yesterday and we had no satisfactory answers whatsoever. Did they do it because one company didn’t comply? We still don’t’ have an answer to that.
So no, we have very many concerns about this process – but it will be too far down the track for us to scrap it and start again. That would not be in the country’s interest. But we do have a number of serious questions that remain unanswered about this process.
JOURNALIST: Should the Government hold off on it until after the election? What if they locked in, say, a contract?
CONROY: Look we don’t know when the election is going to be. We’re not going to sit and wait until November before we make the decision here. So, I accept that the Government has started a process – it’s a flawed process. I think it can still be improved – the Government can still down select to two and that will remove a lot of these ambiguities and problems. But I don’t think we should allow the timing of an election - whether it’s called next week or it’s called in September/October – and could be as late November and December. Because you allow three months after the final sitting when the Parliament resumes. So I don’t think we should hold hostage our submarine process to the fickleness of whether Malcolm Turnbull thinks he can dash to the poll before his popularity collapses, the Government’s popularity collapses further, or if he waits until towards the end of the year.
JOURNALIST: Senator how much should cost be a factor in the current weighing up of these three bids in the process that’s under way?
CONROY: Well I think there’s a whole range of factors that have been put in. I think there’s consistently been evidence tendered to Senate committees that a local build – and this is a very, very important point that David has made – the difference between pricing of eight and 12 is a substantial difference as to whether you build locally or overseas.
The whole through life cost must be taken into account. This is the most important point – the through life cost of the 12 has to be taken into account and all of the assessments done, from France who’ve said it will be the same, and Germany who’ve said it will be cheaper through life to build them in Australia. I think cost is very important – but you’ve got to make sure you have the right costs you’re comparing.
Thanks very much.