The Australian Greens' dissenting report

1.1The Australian Greens do not support the recommendation in the interim report that the Defence Capability Assurance and Oversight Bill 2023 (the Bill) not be passed.

1.2The Greens are deeply concerned about the lack of independent oversight in the Department of Defence (Defence) procurement. There are numerous examples of Defence failing to make informed acquisition and sustainment decisions that necessitate an independent body to assess risk with procurement and sustainment.

1.3Ensuring Test and Evaluation (T&E) in Defence procurement to make sure that Defence is ‘a smart buyer’ through the establishment of a Defence Capability Assurance Agency (DCAA) charged with assessing risk with procurement and sustainment is a step in the right direction.

1.4As the most recent Australian National Audit Office (ANAO) Major Projects report[1] notes out of the 21 projects selected there was a $17.5 billion blowout in costs after second pass approval. Further, while Defence refused to provide the national auditor key information to provide information on schedule performance, previous reports noted that 21 projects were collectively 33 years late.[2]

1.5Furthermore, the ANAO report Defence’s Contract Administration — Defence Industry Security Program[3] found that Defence has not been fully effective at implementing or administering its obligations under DISP, which is designed to address risks in Defence supply chains. The report also found that Defence has not established fit-for-purpose arrangements to monitor compliance and has not established effective arrangements to manage identified non-compliance.

1.6As of March 2021, Defence reported[4] it had more than 16,000 active contracts, with a total value of over $200 billion. In this context, it would be beneficial to have a credible and independent body that can ensure value for money and assess risk in Defence procurement.

1.7There are some minor concerns with the bill, notability around the ‘industry partner’ involved in the DCAA and possible conflicts of interest. This concern was also mentioned by the ITEA Southern Cross Chapter’s submission as the possible conflict of interest with an ‘industry partner’ that will work with the DCAA. However, these issues can be addressed if an independent body is established to assess risk with procurement and sustainment in Defence.

1.8Finally, this report was concluded without input from an identified subject matter specialist with Defence that had been requested by the Committee for this reason. The report is incomplete. It is disturbing to see Government members in the Committee refuse to back the Senate’s power to determine which public officials will be required to assist the Committee and instead surrender the authority of Parliament as they too often do, to un-elected members of the military.

1.9The delivery of the final report from this committee was delayed by a decision of the Senate to allow us an opportunity to hear in camera evidence from a critical witness. That evidence, having been taken in camera, can not be disclosed by myself in this short statement but is referenced obliquely in the majority report from the government members.

1.10I can say, having had the benefit of that further evidence, that the concerns and observations in my initial dissenting report remain. Indeed those concerns were highlighted by the further evidence we received.

1.11Defence procurement projects, whether for nuclear submarines, frigates, fighter planes or armoured fighting vehicles, are the largest discretionary expenditures of the Commonwealth government. Any fair-minded observer, who had the benefits of the evidence we have received in this committee, would acknowledge that the system is fundamentally broken.

1.12With this in mind, as The Australian Greens’ Defence Spokesperson, I can indicate there would be significant positive outcomes from implementing this Bill, with considered amendments, as a step in reforming Defence procurement.

1.13I hope that the government, and the broader Defence community, engages with the reforms proposed in the Bill and that this can be part of broader reform agenda that ensures Commonwealth funds achieve the greatest public good. That should be a project that unites us regardless of our political colours.

Senator David Shoebridge

Substitute Member

Greens Senator for New South Wales

Footnotes

[1]Australian National Audit Office (ANAO), 2021–22 Major Projects Report, 9 February 2023, https://www.anao.gov.au/work/major-projects-report/2021-22-major-projects-report, (accessed 19October 2023).

[2]‘Defence projects 405 months late and counting. Good job Australia is not facing an aggressive superpower’, Crikey, 14 December 2021, https://www.crikey.com.au/2021/12/14/defence-projects-405-months-late/, (accessed 19 October 2023).

[3]ANAO, Defence’s Contract Administration — Defence Industry Security Program, 13 September 2021, https://www.anao.gov.au/work/performance-audit/defence-contract-administration-defence-industry-security-program, (accessed 19 October 2023).

[4]ANAO, Defence’s Contract Administration — Defence Industry Security Program, 13 September 2021, https://www.anao.gov.au/work/performance-audit/defence-contract-administration-defence-industry-security-program, (accessed 19 October 2023).