Conclusion and recommendations
4.1
This chapter outlines the conclusions and recommendations of the
committee arising from the hearings in Rockhampton and Townsville.
4.2
The evidence from the hearings and contained in the submissions generally
indicated strong support for the significant and longstanding Defence presence
in the Fitzroy and Townsville regions. The committee heard from a range of witnesses
who recognised the benefits to the local economy from the Defence facilities
and training activities over a number of years and the future opportunities of
enhanced training exercises, particularly through the Australia-Singapore
Military Training Initiative. However, the committee also heard about a number
of issues and concerns from local government, local business, and community
members arising from the Defence presence and the proposed expansion of training
activities in the region.
Business opportunities
4.3
A key issue raised was the ability for local business to engage in Defence
procurement opportunities and the committee is keen to see mechanisms in place
to ensure local businesses are able to maximise the potential benefits flowing
from the increased Defence presence.
4.4
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 on the challenges
they had faced in getting information about opportunities and navigating
Defence's procurement processes. The message the committee received from the
hearings was that there needs to be more information flowing to local
businesses about opportunities and the requirements for engaging in Defence
contracts.
Local communication mechanisms
4.5
The committee was encouraged by some initiatives intended to facilitate
better communication between Defence and local businesses regarding procurement
opportunities and the processes to engage in those opportunities. For example, the
committee heard that in Townsville there is group convened by AusIndustry in
Partnership with Defence with representation from local government and
enterprise groups which is designed to capture opportunities out of the Australia-Singapore
Military Training Initiative. The committee was encouraged by the initiatives
of local and regional enterprise bodies in running information sessions and
facilitating forums with key officials and tier 1 contractors.
4.6
The committee welcomes the creation of the Australia-Singapore Military
Training Initiative Business and Community Liaison position to 'lead local
engagement for the Initiative on behalf of Defence, keeping community leaders
and local elected representatives informed.'[1]
The committee also views the creation of a Townsville Defence Liaison Officer by
the Townsville City Council as positive step to assist local engagement.
4.7
The committee was pleased to hear that Defence has no issues being
involved in localised communication processes.
Recommendation 1
4.8
The committee recommends that, in consultation with the local councils, Defence
review its mechanisms for communication and coordination in the Fitzroy and
Townsville regions to ensure the most effective flow of information including
plans which may generate potential business opportunities.
Visibility of local engagement
4.9
The committee heard some notable examples of the level of Defence
expenditure on local suppliers that tell a positive story about Defence engagement.
The committee sees the capture and availability of local procurement
information as an important element in fostering engagement and a positive
relationship with local communities. Defence recognises the importance of
visibility of information on local engagement and the committee welcomes Defence's
intention to produce more the metrics on levels of local engagement and making
it publicly available.
Recommendation 2
4.10
The committee recommends that Defence make information available to
local communities about Defence expenditure in the area.
Economic impacts
4.11
The committee heard about the likely reduction in rate-based revenue as
a result of expansions. While acknowledging the contribution of Defence,
communities told the committee that the increased presence would put pressure
on local infrastructure and the loss of land would have a flow-on effect to
local businesses currently supporting agricultural producers in the region.
Communities were more than willing to work with Defence to ensure shared
benefits.
4.12
The committee believes that there should be more data available in
relation to the economic impacts of Defence activities on the community and that
it is necessary for this aspect to be reviewed.
Recommendation 3
4.13
The committee recommends that Defence commission an independent economic
impact assessment of the loss of rateable land which would result from the
proposed expansions in these areas.
Procurement processes
4.14
As noted in its first interim report, the committee recognises the constraints
of the Commonwealth procurement framework in prioritising local engagement. At
the hearings the committee heard suggestions about changes to the Commonwealth
Procurement Rules in order to encourage more local content. Some proposals
included a requirement that tier 1 contractors be required to have a percentage
of local engagement or a weighting on the level and nature of local content in
the assessment criteria. The committee was pleased to note that in the context
of the updated CPRs and 2016 Defence Industry Policy Statement, Defence is
currently:
...reviewing how principles relating to Australian Industry
involvement and economic benefit assessment could be applied more consistently
across materiel and non-materiel procurements of $4 million and above,
including addressing local industry activities.[2]
4.15
The committee welcomed the announcement by the Minister for Defence,
Senator the Hon Marise Payne, on 31 August 2017, of the Local Industry
Capability Plan pilot which aims to provide local industry with more
opportunity to participate in major Defence infrastructure projects. The new
framework will be piloted by three projects that will go to the market shortly,
including the Shoalwater Bay Training Area Redevelopment and Townsville Field
Training Area Mid-Term Refresh.[3]
The Minister's announcement advised:
The pilot projects will require tenderers bidding for major
capital facilities projects to state clearly how they have engaged with local
industry in providing their tendered solution, and how local industry will
specifically be involved in delivering the work packages that underpin the
project.
...
The pilot projects will inform the development of a Defence
Industry Participation Policy the Minister for Defence will release in the
first half of 2018. The Policy will provide a more consistent approach to
maximising Australian and local industry involvement in Defence procurement of
$4 million and above, recognising that Defence procures a range of different
equipment, services, and support across many sectors of the Australian economy.[4]
4.16
The Minister explained the objective of the pilot:
“This is fundamentally about ensuring that local companies in
the vicinity of our Defence bases, facilities and training areas are properly
considered and provided the opportunity to compete and win work,”...[5]
4.17
Some evidence from the hearings also suggested that Defence consider moving
away from the prime contracting model and structure its procurement into smaller
packages to enable small to medium enterprises to be more competitive.
4.18
The committee notes advice from Defence that it does not use a
one-size-fits-all approach to tendering with the method based on the risk of
the project and how best to mitigate that risk. Defence reported that the managing
contractor model facilitates competition to achieve value for money. Defence
also highlighted that under a managing contractor there will be various smaller
trade packages to be competed for. In addition, in using this model, a majority
of head contractors will look to use local subcontractors.
Exercises
4.19
The committee heard from local community members about the lack of effective
notification by Defence about forthcoming exercises in training areas and the
difficulty in locating an appropriate contact to convey concerns. The committee
sympathises with local residents about disruptions like road closures and aircraft
noise, particularly the concerns of local graziers which were conveyed at the
hearing in Rockhampton. Defence acknowledged the impact of aircraft noise from
exercises on the local community and advised of the implementation of a
restricted operating zone around the SBTA.
4.20
The committee welcomed the advice from Defence that for Exercise
Talisman Sabre, a 24 hour hotline had been set up to respond to concerns.
However, it appears from the evidence that there was not widespread knowledge
of this contact number in the community. The committee hopes to see this as an
ongoing arrangement for future exercises and with more effective dissemination
of this information.
4.21
The committee reiterates its view from the first interim report that it
sees value in a formal post exercise debrief with community representatives to
discuss lessons learnt and future improvements.
Recommendation 4
4.22
The committee recommends that Defence review its formal mechanisms for
communication and coordination in the areas around the Shoalwater Bay Training
Area to ensure that:
-
as much information about upcoming training exercises is being
disseminated to the local community with as much advance notice as possible;
and
-
that a contact point regarding local exercises is available on an
ongoing basis and this this information is disseminated regularly.
Proposed expansion of training
areas and land acquisition
4.23
The committee heard persuasive evidence from landowners and business
owners in areas adjacent to the SBTA and TFTA who are impacted by the proposed
expansion plans. Witnesses advised that committee of their anxiety as a result
of the processes Defence followed, which did not provide sufficient information
or consultation, particularly in regard to direct engagement in the initial
stages. The committee notes Defence's acknowledgement that lessons have been
learnt from this process and supports the appointment of a community liaison
officer in Townsville.
Environmental impacts
4.24
The committee also heard concerns about the environmental impacts and
land management issues in relation to Defence training areas, particularly
around Shoalwater Bay. Defence confirmed that it has in place environment and
land management programs. However, it also advised that two people used to be
based locally to deal with issues concerning the Rockhampton estate, but had
been relocated to Townsville. The committee welcomed Defence's advice that it
would review the current arrangements, particularly in light of the proposed
increased level of training in the future.
4.25
The committee also anticipates a further response from Defence on notice
about the problem of the infestation of Siam weed which was raised by graziers from
the Charters Towers areas and which it heard about at the Townsville hearing.
Senator
Alex Gallacher
Chair
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