Defence Budget Isn’t Supporting Local Jobs

Published on Monday, 11 September 2017 18:33

It's pretty clear that there needs to be less self-congratulation from the government and a lot more application to the very difficult challenges ahead. Let me as a Western Australian say that, so far, with regard to support and opportunities for local companies and workers, whether they are companies like Austal or small and medium enterprises like the Henderson Alliance, from their point of view it's been a case of all show and no dough.

Mr Wilson (6:33pm) — It's critical for government to get defence expenditure and procurement right for several reasons—firstly, to ensure that our Defence Force is properly resourced to provide for Australia's security needs and to contribute to regional and global security, including through peacekeeping missions. As part of that, it's vital that our service women and men are supported to do their difficult and dangerous work as well and as safely as possible. We also have to get it right because defence expenditure, like all government spending, involves the allocation of scarce resources, making decisions that inevitably come with opportunity costs. The key issue here this evening is the question of how defence spending develops Australian capacity and expertise, creates jobs and builds on what is currently a below-par defence export industry.

Before I say more on that, I want to make a point in passing that there's a strange disconnect or blind spot in this government's approach to national security. There's a lot of chest-beating about defence expenditure reaching the highest level since 1994, but we hear virtually nothing, in pride or in sorrow, about the fact that Australia's international development budget will fall to 0.2 per cent of GNI, the lowest in our history. For a government that puts great stock in its national security credentials, it's bizarre that no-one in the government talks about the relationship between international assistance and regional peace and security. You simply cannot be serious about national or regional security and run down the delivery of well-targeted foreign aid in the way this government has done. You can't be serious about national and regional security while ignoring the looming and steepening impact of climate change. As former head of the Defence Force retired admiral Chris Barrie has said, our response so far to the 'existential threat' of climate change is not good enough.

I'm glad the government has embarked on a naval shipbuilding program, but I'm conscious there is an enormous challenge before all of us if we are to see that occur in a way that meets our strategic needs, provides value for money and leverages defence spending to create a domestic design, shipbuilding and sustainment capability. The fact is Australia performs poorly when it comes to the value of our defence related exports as a ratio of defence spending. Other nations with comparable levels of spending parlay that into export-earning opportunities for their businesses and jobs for their citizens. We do not, and we're kidding ourselves if we think that repairing that imbalance will be easy. On the contrary, what may well be easy, relatively speaking, is for other countries to have a very healthy piece of that $200 billion defence budget, and the evidence of the government's approach to date doesn't give a lot of confidence on that front.

I feel for the member for Fisher. His motion was listed midweek, and on Friday there was evidence given to a Senate inquiry that the defence department chief had personally called the three international bidders who were part of the $35 billion future frigates program to tell them that they don't need to work with local companies. There was similarly concerning evidence given to the treaties committee about the $50 billion Future Submarines. I was very surprised as a member of that committee when we looked at the agreement to find that the relevant provision said the French government, through DCNS, would facilitate the involvement of Australian businesses on an equal basis with French companies. I thought to myself, 'Well, surely it's our money, it's our project; Australian companies ought to participate on a preferred basis, all things being equal,' and I sought to recommend a change to that aspect of the agreement, but government members preferred to merely call on the Australian government to revisit that principle in the detailed contractual arrangements. It does worry me that the high-level agreement between Australia and France on this very costly project was settled in language that set an unnecessarily weak obligation in terms of our industry's participation.

It's pretty clear that there needs to be less self-congratulation from the government and a lot more application to the very difficult challenges ahead. Let me as a Western Australian say that, so far, with regard to support and opportunities for local companies and workers, whether they are companies like Austal or small and medium enterprises like the Henderson Alliance, from their point of view it's been a case of all show and no dough.

Defence spending is serious stuff. It should be discussed in an open, warts and all fashion. It shouldn't be sacred territory. It must always be shaped by a rigorous consideration of our strategic needs. It must be fit for purpose. It must be determined and supervised by a civilian government free of any inhibition that regards defence as an area of decision-making in which only people with defence experience can fully participate. Finally, if we're serious about national security, we have to reconcile the current disconnect between our policies and expenditure on defence and our policies and expenditure on foreign aid and climate change.

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