Senate Foreign Affairs, Defence and Trade Legislation Committee, , 7:30:34 to 9:31:36
Final topics include F-35 export controls, the PNG recruitment treaty, and a valedictory for the outgoing Secretary of Defence, Greg Moriarty.
Topics: Trade policy, Papua New Guinea, Procurement
Speakers: Hon Sarah Henderson, David Shoebridge, Nadine Williams, Hon Jenny McAllister, Admiral David Johnston AC RAN, Air Marshal Robert Chipman AO CSC, Celia Perkins, Chris Deeble AO CSC, David Nockels, Greg Moriarty AO, Hugh Jeffrey, Jessica Collins, John Reid PSM, Lieutenant General Natasha Fox AO CSC, Mark Hammond, Raff Ciccone, Rear Admiral Michael Houghton, Sheryl Lutz, Speaker 36, Speaker 7, Susan Bodell PSM
>> Oh, thanks, Ch. Um uh sticking with the major projects theme um I was going to ask um about the beautifully named C1 1180 or the offshore patrol vessel. And we might just start um with a um simple question. What's the um what's the current budget for the total project of the offshore patrol vessel and how many boats uh are we going to get for
Senator Rear Admiral Michael Hton, head of patrol boats and special ships. Uh the current uh total budget for the um offshore patrol vessel is um $4.734 million.
>> Yep. And how many of these little boats
do we get for that? We are currently
acquiring six offshore patrol vessels. And um and I'm reading through the um through the project data summary sheet from um from the audit office and they put as you know one of the red threats the the traffic light threats um the actual weapon systems being proposed for the offshore patrol vessel. And they they point out that um initially they were going to have some guns. Now then they were going to have no guns. Then they're going to have a renovated gun, refurbed gun. Now some are getting a rebur gun and some aren't getting guns. And that whole thing has been very expensive. The design and redesign shifting and changing. What's the current situation for the six OPVs? Are some getting a a sort of, you know, patched up secondhand gun from the Armadale class and some not? What's the
>> Uh, Senator, I would like to pass that uh question to the chief of navy as it relates to uh capability uh issue rel relating to the OPVS.
>> Oh, and this is one of the risks that's been transferred to you um vice.
>> Yes, Senator Vice Mark Hammond, chief of the Navy. Uh the OPV program, as you're aware, was originally uh 12 vessels um off off the shelf purchase uh with an integrated forward uh gun. Uh over the last few years, that program has changed in scope. It's been reduced as a result of the um independent assessment team, surface combatant review, uh down to a program of six ships. uh and the armament options now in include a mix of uncrrewed systems. So we're looking at the uh Arafura class as being a platform that will integrate uncrrewed uh surface systems uh and uncrrewed air systems in the future. There are a number of different options underway. Uh but at this stage uh the uh that that includes potential for um main armorament uh that remains uh at the moment uh under consideration.
>> Having chats about that that's good but what is actually what's actually in the contract and what is actually going to be delivered um under the um $4.7 billion budget. What's actually in the contract? I mean, I could read out what I think it is from the major projects report, but I just thought I might give you the opportunity to tell me.
>> I'll refer back to ship building sustainment group for the contract out.
>> The risk is now being transferred to you, your admiral.
>> Senator, under the uh the contract um the for the remaining uh four OPVS that are yet to be uh delivered, there will be no gun that is fitted to those uh
Now, no gun for those. But how many
>> There are no other further armaments on
those vessels. >> Um, >> Senator, >> no further armaments.
>> No, no other armaments are being
delivered. >> Other armaments? >> No armaments. >> Okay. Um, but they're going to be painted a menacing gray. Is that the
>> They're going to be painted the standard Navy gray of other
>> Navy warships. Now, um, aren't they based on that Brunai vessel? The Darus Alam Darus Alarm class. That's what they're based on. I'm mispronouncing.
>> That's correct. It's the Doris Alarm
class. >> Doris Alarm class. That's it. Um, and and the idea was we get an offtheshelf one from the Darus alarm class and it's going to be cheap and we can deliver it early. It can be modular. You can do this with that. Hasn't worked out, has it? These are incredibly expensive and slow to a bit delivered.
Senator, >> what we found with the um with the Arafura class offshore patrol vessel was that the design was not compliant with the Australian Maritime Safety Authorities regulatory requirements with respect to a number of safety related issues including structural fire protection. uh notably the chief of navy from the Royal Brunai Navy was here uh in December for our Indopacific separ conference uh and he toured Arafura in Sydney harour uh and his comment to me was they have some work to do to resolve the safety issues in their class. So I'm confident that the changes that we have implemented and I acknowledge that that has slowed down the program has resulted in a safer uh more effective platform for the Royal Australian Navy and those lessons will transfer now to at least
um I I I'm I'm looking at this project and you know, there's a room full of hawks as a rule. Um, I'm trying to work out how this room full of hawks thinks that delivering the last four of these vessels, which are based on a Brunai design or the Brunai design has, last time I checked, four exet missiles, 57 mm bofers, um, a cannon and two other secondary guns. And the room full of hawks who like things to go whiz and bang and stuff have decided that we'd pay more. We'd address the fire risks maybe and then deliver the last four of these at incredible costs with no missiles, no guns, no weapons. How did you come to that solution? We pay more and get less than Bruno had. Who who came up with this genius plan?
Senator, the program was subject to review by the independent assessment team as part of weapons review and we had to integrate a number of different factors including opportunities to enhance the lethality of the fleet in being the ANZAC class frig and the Hobart class destroyers. So a view was taken across the surface combatant force as to where we would invest those lethality upgrades at speed. uh and the priority was integration of Tomahawk land attack missile standard missile six naval strike missile into the principal surface combatants recognizing there is an opportunity to enhance the lethality of the offshore patrol vessels once in service. Uh and as I testified earlier uh we anticipate the offshore patrol vessel is the ideal platform to leverage the full potential of uncrrewed systems as part of an integrated capability.
That naval review said, "You have no idea what to do with these ships. They're too big for patrol boats and too small to do any war fighting." And it said, "At some point, you might come up with a cunning plan for them, but we've got to keep doing some continuous ship building. So, we'll keep churning them out at incredible cost." That's what the review said. >> You don't know what to do with them.
>> Senator Schub, you might recall that purpose of the RFUR is when the government today made the decision was for a constaborary task which we would characterize as border patrol activities, counter fishing, some work with our partners in the Pacific Islands where the size of the vessel is more akin to the nature of vessels that are operated by our Pacific neighbors. So the function they were intended to perform and that which they will perform are those border work where the armaments are less relevant to the type of task. But importantly the range and seakeeping capability of those vessels enables the work to be done further offshore sparing some of the service combatants the frigots and other vessels who otherwise would perform that work.
Um, it it takes some verbal gymnastics to say that the reason you've decided to take all the armaments off these four incredibly expensive ships is because you want to have enhanced lethality. This is, you know, I represent I represent a party that doesn't want to take us to war with China. You all seem hot to trot to go to war with China and join Donald Trump. And then you want to go to war with China with ships that don't even have a gun on it. Like it's it's it's incredibly doubly dangerous what you lot doing. >> Um it's like going to a going to a bar fight and
>> All right. So now have you got a question because I think we're keen to
move things around. >> I think you know the quote about Zarism chasm being the lowest form of weird. Can I invite you if to put questions to the officials who are taking this hearing seriously uh in ways that they can answer seriously and uh you are pursu quite within your rights of course to pursue the questions you have about this particular project. But can I ask you to just dial it back a little and approach it in a way that gives officials uh the capacity to engage seriously with the questions you seek to
ask? >> Minister I I I don't know if you you talk to people about what's happening in defense, but if you go out into your electorate and you said to people, well, do you know what? We're spending $4.9 billion building six ships for the Navy. Two of them are going to have some renovated guns that we whacked on an old armor class. And the rest of them will have zero weaponry, but we're going to paint paint them menacing gray. And we don't know what we're going to do with them. You're like, do you seriously think that would survive public review? But but of course, you know, um you desperately don't want to talk about this stuff. You want a secret defense committee where all this happens. But do you seriously think if you told people the truth in plain language that it would survive public review without sarism and ridicule?
>> Uh Senator, even that question in engage sarcasm, but let's let's move on. Um we are here at Defense Estimates. officials are here to answer your questions about uh the nature of the project, its progress, and uh the deployment of this capability when complete. [clears throat] Um I'm not going to speculate about how others might judge um the project, but officials are here to answer your questions. My suggestion is that you put questions to them uh and they'll answer them as they have already. Well, why
don't we move to the one of the potential things that you say, Vice Admiral Adam Hammond, may be paired with these. You're talking about remote weapon systems. Is that right?
>> Uh, uncrrewed autonomous system. And I should add to my testimony, the 50 cal machine gun, which is been traditionally fitted to our patrol boats as well. And um Senator, we do not we are going to be using these vessels for as the CDF uh testify, they are for border protection and Southwest Pacific engagement activities principle.
>> Um uncrrewed autonomous systems like for example the ghost shark. Is that what you would that kind of system? That's an uncrrewed autonomous system.
>> Senator that's that's probably on the larger side of our family of uncrrewed autonomous systems. I'm I'm talking principally about uncrrewed air systems, uncrrewed surface uh vessels that can be developed. This the Arafura class has three seabo launch positions port starboard over the side and a stern launch and recovery capability and a very large flight deck.
>> Well, it it might be a useful moment to go and start looking at the ghost shark notwithstanding if it's too big for an offshore patrol vessel. Um have we got the best is this the ghost
You got another minute there, Senator. Then we'll have to move the call around.
>> Now, last estimates when I was asking you about Androl, which is the US tech company that's um been contracted um to deliver Ghost Shark. Um you said that you've been working with Andrew since 2013. Um now of course Andrew has only existed as an entity since 2017. Um the um you know and this was in the context of me asking you about it being a recent startup and um not having any defense experience. Um, do you agree with me that Andrew only has has has been in existence as a legal entity since 2017, not 2013?
>> Uh, Senator, um, we in last estimates we said that we've been working with Andrew and there've been a research collaboration contract under ASCAR in May 2022.
>> All right. Well, >> 2013. >> I we haven't got time to go back to the transcript. Transfer speaks for itself. You said you've been working, it may not have been exactly you miss, but it was one of the one of the um one of the witnesses in this said that been working with with them since 2013, but just haven't got the time or the interest to go back over that. Um now last estimates I think it might have been you CDF um you said that the $ 1.7 billion contract and I think it's consistent with what the deputy prime minister defense minister has said is for dozens of ghost sharks and you wouldn't provide any further detail on that. Do you remember
>> no senator in that it was me? Well, it
must have been you, Vice Admiral,
>> Senator, I'm pretty sure it was me.
>> Dozens. >> Correct. >> All right.
>> I think you also asked me if I had anything further to add and I said no.
>> Yeah. But but since then, of course, Palaki um has had a bit to add. >> Um you know who Palaki [snorts] is,
>> Senator? Yes, I know who Palmer Lucky
is. And um Andrew is him and Peter Theel's um um corporate play thing. Um Palaki is largely in charge of Andrew. Um he's gone on the record and said that the $ 1.7 billion contract is for dozens and dozens. Now is he right, Palmaki, or are you
>> Senator? Both of these things can be
>> So is it dozens or dozens and dozens?
>> Senator, the beauty of uh these uncrrewed underwater systems um is lies in its stealth. The fact that their their size and their stealth uh um affords a significant capability advantage, particularly where potential adversaries don't know how many there are of these that can be at sea at any given time. So for those operational reasons as we discussed in the last set estimates hearing we're not intending to disclose the total number of ghost
sharks. >> Now talking about autonomous weapons systems palaki who's in charge of Andreel who's running the ghost sharks was asked about autonomous weapon systems and the ethics behind Andrew's autonomous weapon systems. Um and he was asked about the ethics about having autonomous kill um and not having humans involved in decisions to kill. Um do you know what he said in response to that?
Senator, I understand that he was talking more broadly about Andrew's programs which include uncrrewed air systems uh swarms of uncrrewed air systems and other other platforms. He wasn't speaking specifically to the go
program is my understanding. >> No, but you're right. and he was speaking generally in language that covers ghost sharks. And he said this, "I love killer robots." Um, and he went on, I think that the ethics of warfare are so fraught and the decision so difficult that to artificially box yourself in and refuse to use sets of technology that could lead to better results is an abdication of responsibility. And then he went on about saying the problems of having humans involved in the decision-m um that's defense's partner in Andrew. Is that what the software is going to produce? Killer robots that cut humans
and we've had this discussion previously. What I'd be clear on is of course we are the employer of those systems. The manner by which they work are determined by uh defense. that is always going to be compliant with international law with the laws of armed conflict. So I'm very clear as I am sure uh all the officials are the manner by which we employ these capabilities will very clearly be consistent with
does that prohibit killer robots that make decisions to kill without human involvement? Is that part of the design
>> So the the requirement for all of those systems and the means by which if they were to have lethal capabilities, those would be employed will be compliant with our understanding of international law.
>> Well, it's a simple question. Is the ghost shark going to have the capability to deliver lethal force without human intervention, without human decision making? >> Yes or no?
>> The way the ghost shark will work will be consistent with Australia's international in interpretation of international law. >> So you too love killer here.
>> Okay. Thank you, Senator Henderson.
Uh chair, thank you very much. I wanted to ask about national preparedness. A number of very esteemed figures, Dr. Heather Smith, Mr. Andrew Shearer have pointed out the geopolitical and economic spheres are increasingly combined. Am I correct that the defense minister still leads coordination of the national preparedness?
But Senator Henderson, no to my knowledge, the defense minister does not. If you mean by national preparedness, the national full national resilience rather than that which defense is responsible for that is the employment of our military capabilities. that the defense minister does not lead the national preparedness task. That work is led in the department of prime
>> Okay. So for what what about from the perspective of the department of defense?
>> So for defense preparedness and to for that part which might be characterized as mobilization or uplift in defense preparedness that clearly is work.
>> I I should have just clarified that. Um, can I just ask what is the what is the mechanism to coordinate that policy work and where are we up to in from from the perspective of the department of
>> Senator [clears throat] Marshall Rob Chipman. I'm vice chief of defense force. Um, the preparedness work that we have done takes its guidance from the national defense strategy which lays out the sorts of tasks that the operations that we might expect to get involved in. uh we look at the intelligence picture uh and then make assessments of when we need capabilities to be ready to go for what sorts of missions and and that is the framework that we lay out in our preparedness u directives that that both the secretary and CDF sign. [cough]
>> So how much uh economic briefing does the defense minister receive um in the context of national preparedness? So I'm asking about the intersection with trade and industry issues uh say for example the Chinese Communist Party's iron ore cartel or its coercive actions currently being undertaken
a senator, he would not receive any economic briefings as a consequence of the preparedness management work that happens within defense.
>> But Senator, >> so there wouldn't be any >> could. >> Yes. Yes. Yes. Secretary,
>> the deputy prime minister also has the the benefit of um reporting on all of these topics that are produced by our intelligence community. And there's, you know, there is there is work done on those topics by the intelligence community. The deputy prime minister also sits in full cabinet meetings and NSC meetings where it's not just the defense uh agenda that is um advanced and there are strategic discussions that take place around uh a number of those uh issues. uh and then the the work that we are doing on the national defense strategy update which also goes to the uh the issues of you know supply chain resilience, self-reliance, national resilience. Uh the the deputy prime minister is in deeply involved uh and his office are deeply involved in that
work. >> Okay. So obviously last year there was we learned about the issue with the six monthly preparedness reports. they have now resumed those regular preparedness reports. Uh can I just get a confirmation as to the status of the most recent report?
>> Uh the most recent report was compiled in December of 2025 and signed off to the minister in January this year
>> and has that uh so how has that been
Uh it is a report that is covered by ministerial submission and sent directly to the minister's office.
>> And is that available at all for publicly? >> No senator. >> So there's no part of that report that can be made public.
>> Uh no Senator, we would need if there was to be a public document then it would need to take a different format because the nature of our assessments
are classified.
>> Okay. Uh now Australia still doesn't have a national security strategy.
>> That's correct. Senator,
>> is there any contemplation that that might change into the future? Mr. Sowry, >> Jeffrey, if your your sign your name tag is place is just [clears throat] concealed.
>> strategy policy industry. So um the national security strategy or the decision to form the commission one is a decision for government. Um but as I'll just note that the when the defense [clears throat] strategic review uh was conducted and translated then into a national defense strategy 2024 um the government that that model developed essentially a a two uh part way of looking at the defense of the nation and the first is um the the capabilities that the defense department and the ADF need to build to ensure the defense of Australia but I'd also acknowledge that um given the challenge challenges around defense today. It's not something that defense can do alone and therefore the NDS introduced the concept of national defense and that's the idea and that's what um uh what the CDF was referring to um which is the multi- agency coordinated effort led by the prime department of prime minister and cabinet >> um to uh ensure that uh where defense where the defense of Australia requires >> action by non-defense agencies that that is also undertaken in a coordinated ated manner. Uh and of course that would be an element that that that we think is that addresses the sort of the core non um portfolio uh uh uh areas that contribute to defense.
>> Is there any contemplation of a national security strategy into the future?
>> I wouldn't I wouldn't I wouldn't comment on that, Senator. That's a decision for
government. >> No, I understand that. that is have has defense advised has the department advised government in that respect
>> I won't go into the content of defense
advice >> well there's nothing inappropriate about asking about advice to government
>> senator I could the department of defense has not been asked to make a recommendation on on that topic we we're very comfortable that through the secretar's committee on national security the the normal ID DC's uh that we do. We have other departments involved in the in the development of our national defense strategy including the domestic resilience supply chain resilience with like the these issues are ventilated and we have the benefit of other uh portfolios contributing to
>> I wanted to ask also about the defense delivery agency. Last night, the head of the A described the status of the Defense Delivery Agency or the DDA is conceptual. Can you explain to us why the minister has just announced the concept of a reform rather than a definitive reform
>> Senator, there's a lot of work going on in this. there's an independent task force that's working on developing this for for government and I think it's appropriate um if with the chair's indulgence we'll get the the head of that independent task force to to come and and and and talk about the work to develop the the concept for for government consideration.
I mean, I guess we were just a bit surprised, secretary, with this idea after the big halabaloo about the announcement of uh this new agency. Uh we now learn that it's a conceptual. So, it seems like there's not, if I can use that term, and not a lot of meat on the bones.
Senator, the government has considered these issues and has made a decision about the direction in which it wishes to proceed. Uh at a certain point in time in these kinds of decisions, it's appropriate to communicate that both to the public sector uh but also to the public. uh Minister Miles and Minister Conroy made a decision to do that and we are now in the next stage of work and Miss Williams is in a position to talk to you about what that work entails. Um,
look, I would welcome that. But just on that, if I could just also ask for clarification because government GBEs and agencies have said that beyond a briefing on the 4th of December, the only engagement they have had to date was an industry round table. Is that
>> Nadine Williams, head of the defense reform task force. Thank thank you for that question, Senator. The task force was established in December, early December and as part of its work program and working through um its advice to government on an optimal implementation pathway for these reforms that were announced in early December. We have been doing quite extensive consultation um and as you note there was a quite a long um industry forum or a series of industry forums that were conducted um with a whole ra range of stakeholders including um uh industry uh GBEs etc. So yes that's correct. There were quite a number of discussions that have been had.
>> I mean it just it just starts it's starting to smell a little bit like a program out of utopia. There's it's the same work with a different slogan. And the reason that I say this is that government GBEs and agencies have have now said and consistently that they see no difference in how this reform will affect their relationship with defense. So we are struggling with what is the point and I put I'll perhaps put this to you minister. What is the point when there's a new name, there's a new slogan, perhaps it's been put up on a whiteboard, minister, but >> more sarcasm. >> But perhaps we could >> Well, well, I think there is a proper basis >> proper basis to have a bit of sarcasm because it doesn't look like this is reform in substance. Minister,
>> uh, Senator, I entirely disagree with that characterization. So we came to government and there were significant challenges that we observed in the way that uh procurement and the development of capability was being undertaken and we resolved in a collaborative way with uh the department of defense and with the ADF to start to address that. Um earlier in testimony today uh officials have made the observation that our projects are increasingly complex. They require increasingly more complex approaches to um managing to project management to acquisition to supplier management and we consider that developing a concentrated capability with deep skill in these areas is important and significant and these are part these are some of the reasons why a new approach has been recommended. uh you've made a number of assertions that suggest that um you don't see detail work underway. Miss Williams is at the table. She is leading that work and is in a position to talk to you about what she has been tasked.
And so I would I would start by saying Senator that I wouldn't characterize those discussions with uh industry in in that way. They've been extremely constructive and we've received quite significant feedback from particularly um sort of the industry players that defense works with that they welcome the opportunity that these reforms present. Um they certainly see significant benefit in terms of the potential for the reforms that have been announced by government to accelerate capability delivery uh through clearer decision pathways for very much for much more um
>> but is it just the one industry round
table Miss Williams? No, absolutely not, Senator. There have been several industry roundts that were held. There were two um substantial roundts >> and what were the dates of >> that were held with the primes on the 28th of January 2026 and that was quite an extensive round table. I think that was scheduled for for almost two hours. And then there was a second round table that was held um on the same afternoon with state and territory governments and small and medium enterprises. And those roundts were an opportunity to get feedback from industry um from state and territory governments and GBAs and others on where they saw the merits of the reform, what they wish the task force to explore in terms of design with
sorry just I think there's just been a confusion with my question because what I was asking for is the GBEs and agencies have said that beyond a briefing on the 4th of December um the only other engagement has been an industry round table and that was what was occurred occurred last week.
>> So several industry roundts
>> several industry. So there's one on the 28th of January. When was the other one?
>> Uh both both of those that I was referencing were on the 28th of January. Separate to those there have been a number of one-on-one meetings that have been undertaken um with a range of stakeholders including um uh a range of GBs within the portfolio and otherwise
>> and and so who led that briefing last week from defense and what was the substance and purpose of that industry?
So the briefings on the 28th of January were led by myself and the purpose of those briefings as I was saying was to talk to uh the range of stakeholders who were represented about the design of the reforms to seek their feedback on where they saw improvements could be made in terms of the current capability delivery functions that exist within defense and to seek their views on where they saw the opportunities for greater um for for the reforms in terms of greater benefit
industry participants attended and and could you just outline uh which participants actually were there on the day?
>> Well, there were quite a number. I'm happy to table the list given it's quite a significant number.
>> No, no, that's fine. If you could table the list and also
>> or alternatively, Miss Pull may have the um the exact number perhaps of participants.
>> Thank you. Yes. So Vicki Pollen my um and my role is deputy head of the task force along with Naen. So to date we've engaged with 43 organizations so far um 27 defense industry primes and 16 state and territory advocates and um peak
>> and 16 state and territory
>> um advocates and peak bodies. So that's that's together.
>> Okay. And so just at this 28th of January, the industry briefings on that day, were there slide decks or briefing packs or consultation papers? And if so, could we have those on notice?
>> So Senator, there were a series of framing questions to guide the discussion and be very happy to provide that [laughter] advice on notice.
>> Um, thank you. I just want to go just ask a some basic questions about the DDA. What will be the organizational structure of the DDA?
So Senator, the task force is currently in the process of working through its advice to government on the detailed organizational structure, but you'd be aware that government has announced um the groups that will be consolidated, the current groups within the defense uh system that will be consolidated under the DDA and they're of course the CASG group um the GUI group and the national naval ship building sustainment group and the those functions will sit at the heart of the DDA
>> and what is that what is that advice to government in terms of the proposed organizational structure.
>> So that is the advice that the the task force has been working through and will provide to government. We are working through what a detailed implementation plan needs to look for for look like for implementation of these reforms. That does include advice on the construction of the DDA, how it is stood up, when it is stood up. It's it's due to be stood up on the 1 of uh July 2027. And so there's a runway of implementation steps that need to be put in place.
>> So just to be clear, there's no proposal in relation to organizational structure.
>> So the task force uh is still in the process of providing its its advice. It's due to provide that advice to government in early this year. So we're
>> Anything that you can provide on notice in relation to
>> draft papers or draft advice? Not at this stage, Senator around a matter such as structure. Um, so we are still working through that.
>> Well, if you could take that on notice, please I am I am seeking that. >> Uh, what will be the resourcing in the
>> So, Senator, um, I that that is still a matter that we are working through, but as I said, the first stage in creating the DDA is to consolidate the three existing delivery groups within defense. um and then to translate those through to an executive agency um on the 1st of July 2027. Um I would envisage that there would need to be further advice on what if any additional work is required to um to bring those agency those groups into a single agency and that advice would include advice on what the financial um arrangements need to be for
the entity. So, I guess what I'm trying to get to, and it goes back to my flippant but real concern in relation to the utopian nature of this arguably and we're getting this feedback. How is this going to change or shift the focus of major project delivery? So what is specifically going to change from the current CASG, NS, NSSG and go operations? Operationally, >> yes, we understand the merger. What is going to change operationally?
>> So I think Senator, ministers have been very clear around the purpose and the objectives of this consolidation. So bringing together all of these delivery functions under a single head provides for a single point of accountability around delivery within the defense system. And I do think that that is probably the the most significant sort of benefit in terms of uh project delivery according to cost and to schedule and to scope and to allowing ministers and government to set performance requirements on the organization.
>> But those performance requirements are currently exist don't they in relation to those three separate.
>> So Senator they do but this is an opportunity for us to consider how we can actually refine those how we can bring those together under a single entity. and also the benefits of of actually consolidating the skills and the expertise around delivery into a
single. So I understand how you might bring them all together and you might make those performance benchmarks maybe one >> across merging the three organizations. But what operationally is going to change >> if if for instance like just using something very basic you know project A has got to be delivered within this time frame within this budget using these resources. So you you set out benchmarks for the delivery of any project by merging these agencies together. what operationally is going to change.
>> So what you're doing is merging together those functions under a single accountability and I think that is a really important change. It allows for ministers to hold a single entity to account. It allows for that entity to set very clear delivery expectations um for the projects that it's working with. It allows that entity to consolidate its expert delivery expertise and to lift the professionalism the delivery capability and the professionalism of its organization. Um and so in many ways I think it is as much about that clarity of accountability as anything. Um and you know we are not the only uh the only country making this kind of change. Um we are seeing with the complexity of projects increasing other places like the UK and Canada also coming to a view that there's real merit in creating a delivery entity that's explicit focus is ensuring the delivery of defense
capability. So there's one funnel of delivery,
>> a single funnel of delivery and a single set of expertise.
>> So so in terms of enhancing the performance of that one agency, what are the changes to the deliverables to the performance measures that will ensure the performance of that single agency will improve? You can't, you know, if you're going to make that statement, >> Miss Williams, we need to see the evidence and to to understand >> how those performance deliverables are going to change such such that the single funnel >> is going to live to deliver a much better outcome >> than the current three separate
>> Completely right and and I would agree with you and that is one of the the core pieces of work that the task force has been looking at. So setting out the optimal implementation pathway includes that that question of kind of what arrangements need to be in place.
>> So so that hasn't yet been determined. >> Sorry, >> that hasn't yet been determined.
>> So as I said, Senator, we are still working through our advice to government. We were established in December as a task force. Um and we are in the process of working through these
>> Okay. That doesn't give me a lot of confidence because it doesn't seem why you have those aspirations and I understand why you've got those aspirations. It doesn't appear there is the meat on the bones to use that basic phrase as to how you are going to deliver enhanced performance.
>> So senator the work of the task force and my role is to provide the meat on that bones and so that is what we are in the in the process of doing right now.
>> Okay. Right. But you don't know how that's going to be done at this point in
time. >> Senator, as I said, we are working through these questions. It's our role to provide advice to government on that matter. I It's not that we don't know how it's done. It's that we're in the process of developing this advice at
>> Thank you. Secretary responds to a very significant loss in public sector capability which came about when the Liberal government in 2014 uh caused a significant loss of public sector capability. Job losses that essentially saw many of those project management functions outsourced. Uh it is our view that that contributed to the 97 years of delay attached to 28 projects when we came to government. We consider that the core skills around managing major and complex projects do need to be uh lifted up. Uh we're very confident that we can do that in a public sector context context. It's different to the approach taken by the Liberal government. Uh but we think that these reforms will support greater budget management uh cost estimation and assurance and delivery across the life of defense projects. uh and we've made clear the direction. We've started communicating with people uh about that as is appropriate and Miss Williams is now in the next phase of this project which is making detailed recommendations about implementation.
>> I'm probably the wrong person to have a crack at in terms of cuts to defense because even in my own region land 400 phase 3 was dramatically cut. the how it's a program was
>> Henderson I'm nearly laying out what
sorry I'm just I've just got the call so I just want to >> just I want to respond but also just to quickly move through a couple of because the chair rightly needs to wrap me up. Uh so secretary can I just ask what's the evidence that the DDA will be able to provide will be able to recruit and retain professionals with engineering and complex project management skills noting that defense has failed to do so.
previously um and as a on behalf of the secretary um which is that this question of professionalization and how we recruit in that capability as one of the core tasks that's been allocated to the task force to consider it is a really crucial question I think and I think from the perspective of of consolidating these resources in a single accountability I think there's real scope um for us to consider how we can actually build that capability ility and that professionalism into the new entity. Um so we will be working through those questions. Um
>> and I look can I just particularly raise the concern in relation to this matter. >> Yeah. >> Um defense's use of external consultants has been reduced by more than 40% as you know since 2022. And so we've got very deep concerns about how the department proposes to fill the engineering and project management capability gap inside the new DDA as a standup.
>> I think there's a strong argument uh senator for rebuilding that capability or that capacity within um the the workforce the APS workforce and the military workforce within defense itself. I mean, I do think sort of part of the challenge with um sort of outsourcing to external contractors is of course that that that expertise and that experience then sits outside of the public service. Um and it does make um sort of that the need to in-house that capability is probably one of the core things that we are looking at. It does make projects more expensive. It also makes it difficult to maintain the continuity that you need of experience and skills in order to do these things well. Um, so one of the things that we are looking at very carefully is how we build back in that professionalization of the workforce. How do we build career streams for the APS and the military workforce and how do we ensure that we kind of lift up that level of skill in a way that's comparative I guess with other countries where it is kind of done um it's it is done very differently. It's a very much a professional stream of work that people work to >> and defense has done quite a bit of work in this space already. Um but what we are looking to do is to sort of build on that and to see how we can actually enhance it in this model.
>> Miss Williams, this is an enormous mountain to climb and I think the DDA and you would accept this surely that if the DDA cannot realistically build those skills internally, >> um will the government concede that the DDA needs to be rescoped? And perhaps more fairly, this is a question for the minister. as primarily a contract management and oversight body. Because here's the challenge, Minister. You can have all the aspirations you like, but if you cannot bring in internally all of those experts, industry experts back into the DDA, then that's going to lead to huge uncertainty with project delivery, huge uncertainty with whether you have the expertise in DDA, and and frankly could undermine the very essence of the DDA into the future.
Uh, Senator, I'm not I don't really think there's a question there, but um >> I think I repeat my earlier evidence that
>> will the government I I did ask Sorry, I please. I did ask will the government concede that the DDA may have to be rescoped because this is a really a live a very live um possibility that it will not be possible to rebuild that amount of expertise internally.
>> Senator, I'm happy to perhaps dive in think Senator the way that I would look at this is that the government has set out um what I would consider to be a very sensibly staged implementation approach. The first stage is to stand up the defense delivery group and to bring together the existing functions, skills, experience, staff that sit within defense. The actual implementation of the DDA model doesn't commence until the 1st of July 2027 and then it is clearly going to be a progressive piece of work to stand up the capability, the skills, the experience and the professional career um elements that you're talking about. Part of the job of the implementation task force is to advise government and how you can do that in a way that is sustainable and enduring and actually addresses the issues that you're talking about here. So, we're very cognizant of that. We appreciate that it is a big hill to climb to lift the level of APS and and military capabil uh skill sets around capability that there has been um quite a reliance on contracting and that that is a that sort of um shift in the workforce is going to take some time to achieve but part of the job that we've been tasked with with is to provide advice to government on how you can do that and um and how you can do that in a sensible way over time and so I think that's a measured it's a sensible way of doing it and I'm confident that there is a a pathway we can chart for government that allows for that to happen.
>> Thanks very much, Miss Williams. Chair, I'm very happy I've got more questions, but very happy to share the call at your will.
>> Thank you. Very generous of you, Senator Henderson. Um, I'm going to take that offer and hand over to Senator Schub.
>> Uh, thanks. Um, that's his last question about the Australian Naval Nuclear Power Safety Regulator. And I was told that this is the session in which to ask those questions. Is that right?
>> We can we can do it.
>> Chair. Sorry. Um I don't have a copy of the program in front of me. >> I can't hear. >> Did senators call the regulator uh as a witness? >> Sorry. >> Sorry. Did senators call the regulator as a witness?
>> The regulator? Sorry. Which one?
>> The Australian Naval Nuclear Power Safety Regulator. We had some questions of them and we were told I think after the secretariat consulted with defense that this is the um session in which to >> you listen >> discuss the Australian naval nuclear power safety regulator.
>> Something you had
just just hang on a sec. We'll just get some advice here as well too cuz So are you suggesting that that there were conversations had that the regulator
>> We we we have some questions of the regulator. We asked the secretariat I'm not trying to put the secretariat in a spot. They
>> can can suspend let's just suspend briefly. I don't want to have this conversation broadcast across the world, All right, welcome back everyone. All right, we're resumeuming programming now. Senator Shoebridge,
>> uh thanks chair. Um and thanks for that discussion and as always the secretary to right um the um [laughter] the >> they're always right. >> They're always right. The as I understand um minister you might be able to confirm this you or may not. The Australian Naval Nuclear Power Safety Regulator actually commenced operation I think as a separate agency within defense. Is that right?
>> Uh they are a separate agency. That's
correct. >> And and that was in November of last
year. Uh, I don't have the date with me,
Senator, >> and I have a series of questions here, Minister, but I I get the sense that in the absence of the agency being here, I'll get a lot of taking on notice. Is that correct?
>> You could submit them in writing. I think that would be more efficient way
through this. >> Well, for once, I agree with you, Minister. Um, >> only once. >> Well, now I've agreed with you twice. >> Amazing. We're living >> the um um which will then naturally leads us to the F-35 project. Um >> natural transition. Now, Secretary, the um when the Australian Defense Force speaks about the F-35 or when the the government, the Australian government speaks about the F-35, they talk about it as a joint project, a multilateral project. Um um how how do you describe it now? Now the F-35 project you describe it as a multilateral project whereas Australia is a partner you describe it as a US project. How do we describe it Mr.
Devil? >> Thank you very much Senator. It is [clears throat] a we are a a partner in the joint um uh strike fighter program. We were one of originally nine partners. Turkey uh withdrew was withdrawn some time ago. There are eight partner nations. There is now a number of significant other players in the joint strike fighter which have joined um the overall program through FMS cases and that's through foreign military sales um opportunities with the US >> and that's done in a bilateral basis. >> There is a governance structure um that involves the partner nations which we
>> All right. So the I mean normally [clears throat] partners have um you know partnerships are understood to give the partners a say in the direction of a project particularly over critical decisions of a project. Is that what the partnership arrangement gives Australia for the F-35?
>> The partnership provides us with a number of opportunities on being able to influence that program. An example of that might be how we would choose to prioritize capability upgrades for that program. Um we have opportunities of looking at um issues that related specifically to Australia. One of the largest features of the program um was the industry benefits. We have achieved over six billion dollars worth of industry benefits over the time that we've been involved in the joint strike fighter program. And we're still gleaning those benefits through things like maintenance, repair, overhaul, and upgrade opportunities for the 72 aircraft we now have in our fleet.
[clears throat] Um, sorry. So the upgrade benefits as you described them are about and the the maintenance benefits as you described them are about about our the 72 F-35s that have been acquired for the RAWF.
>> Yeah. The um support that we have for the 72 aircraft. We have opportunities for Australian industry in that. But the other benefits that are gleaned is we get a boat as to um how the capability will evolve. we are we have opportunities of being able to look at how the aircraft is supported. Um we have those opportunities through a range of forums that exist um in the joint strike fighter governance
>> and and we Australia Australia is a as part of the global supply chain. >> Correct. >> Is that where some of the $6 billion comes from selling parts into the global
supply chain? Yeah, the $6 billion has been acred through the acquisition process. We have a number of companies that have provided component parts and been engaged in um the development of that capability and um parts that are used for the construction of those capabilities. I can give you some examples like Mirand um is a very successful company in that place. In terms of support arrangements, we have a company called TAE uh based out of Queensland that provides support to the Prattton Whitney engines on the aircraft.
>> Um and indeed we produce the lift for the engines that takes them and for maintenance at one of our facilities.
>> Yeah. The Morand capability included an engine um an engine jig that allowed the removal of the engine that was produced
>> All right. and and I think it was RUAG, don't know if it still has that title, produces the uplift actuators for the bombs.
>> Uh RUAG, now Rose Bank, >> Rose Bank, >> you know, is associated with um doing the maintenance, repair, and overhaul and upgrade of a number of hydraulic and other components
>> and produces the uplock actuator system. I think as
>> I need to confirm that um Senator I don't know the specifics around that, but um that is part and parcel of their expertise.
>> Yeah. which is the Bombay door things opening and shutting. That's what an what that's how they describe it on their website. >> I'd need to confirm that >> the uplock actuator system opens and closes the bay doors in seconds to enable the F-35 to drop its payload more
>> I' I'd take that if that's coming off their sight center. I'd need to confirm that, but I'd take that as as you
stated. Now, in November of last year, the US president announced that um the F-35 jets would be supplied to Saudi Arabia. Um and of course that raises a number of issues. Um, are we as as part of the partner of the F-35 project, are we obliged to produce those parts and send them to Saudi Arabia and produce parts to go into aircraft that will then go to Saudi Arabia now that decision's been made? [clears throat] Is that one of our obligations?
>> We produce parts in Australia that will uh could be used on any of those aircraft. We don't discriminate. We have obligations under our arrangements, the production, sustainment and follow-on development um to provide those parts that still gives us the industry benefit and we don't discriminate or track those parts um in terms of Australian manufacturer. They support uh the broader uh global supply chain and acquisition processes.
>> One of the reasons we don't discriminate is because the agreement doesn't give us the ability to discriminate. We have an obligation to produce parts and feed them into the F-35 global supply chain
>> and gain the gain the benefit of that from an industry perspective.
>> Yeah. May make some money from it but there's an obligation to provide them into supply chain. We we can't choose which country they go
are uh provided to Australian companies through Loheed Martin the agent of the US government and uh that is an arrangement between those companies and Loheed Martin from a commercial perspective
>> and I should have indicated in the previous questions I saw you nodding [clears throat] Mr. the people but as you know not in turns up very badly on the transcript.
>> Understand?
>> Um now when the US made the decision Oh sorry when the decision was made to extend the F-35 project to Saudi Arabia. Were we consulted about that before it
>> I don't believe so, Senator.
>> Um but we're a partner How is a partner not even asked about a critical decision like that to extend the program um you know substantially in this regard to to a country like Saudi
Arabia the um FMS arrangements are bilateral arrangements between the US government and that nation um we don't get visibility of those FMS cases the advantage of having FMS customers um including nonpartner ner nations is that increases the fleet size which increases the benefits through global supply chain
and otherwise. But we also end up supplying parts which go on F-35s that go to a country which has an appalling record of using its military most recently in in circumstances that raised enormous human rights concerns in the conflict in Yemen. And and we weren't even asked. So now Australian industry is supplying parts to go onto F-35s to be used by Saudi Arabia and we know what Saudi Arabia does with its military. It's used it in appalling circumstances in Yemen recently and we didn't we won't even ask. We just have to keep pumping the
>> Senator, it is not my place um not my role to comment on those particular policy issues. Um I would probably refer to Mr. Jeff in that regard. Well,
but it it is your role to make sure the parts flow, that the partnership agreement is complied with, and that the F-35 project remains on track. And and in that role, questions about morality, ethics, war crimes, um ethical questions, they're all outsourced to the United States in its FMS project, um foreign military sales approval. It's all outsourced to the United States. That's that's that's the reality of it, isn't it?
>> Senator, we I mean the our general framework in terms of, you know, how we approach the these issues, we we've been over that several times in in this committee before, but all all of those um policy frameworks u you know remain in place um in in relation to you know
>> what what policy frameworks are we talking about? What does this mean?
about the provision of of support to um to a program, you know, to programs. But we have there are there are terms and conditions of of our participation in this program that that are set and we have you know we have benefited from participation in the program. Um there are there are other issues around where we have a decision about whether we provide you know material to to which countries. But in terms of the parts for the joint strike fighter program that that that's governed by by um sort of these arrangements between Loheed Martin and and and several Australian companies.
>> Mr. Deles's made the position quite clear. issues of ethics or morality don't don't don't come into it. We have an obligation to provide the parts and the US decides which countries will get them. I mean it's not it's not complex. That's just the arrangement. and and and in this case, >> we're supplying parts that will go to the F-35 that will be used by Saudi Arabia when organizations like Amnesty International Australia, the Medical Association for the Prevention of War, other human rights organiz organizations have said, well, we should have no part in supplying weapons to Saudi Arabia because of their human rights record and most especially the appalling use of military equipment by Saudi Arabia in the conflict in Yemen. But it's just not relevant, is it? We just we're what the US decides we comply with.
>> Senator Jeffrey, Deputy Secretary, Strategy, Policy, and Industry. As Secretary said, we've discussed this before. And in terms of the policy issue that you're talking about or that that um Mr. D will reference, it's what we have discussed, which is Australia's export control regime. Um, as you know, Senator, we take our export control obligations very seriously. I don't know. >> Each export application is assessed on a case-by case basis to determine whether it would be prejuditial to Australia's national interests as you know uh any item that is controlled uh that is exported from Australia uh would need an export permit and we assess that on that basis.
>> Well, previously Mr. Jeff, you said this and was asking about weapons parts going from the regional hub north of Newcastle to Israel. And you said the F-35 supply chain is a particular arrangement. You can use the word special if you want. It's a unique arrangement. It's a global supply chain. We participate in that. Goods are moved around the world. These are US-owned goods. They're managed by Loheed Martin. Australia does not direct the export of these goods. It does not control the export of those goods. Um, is that still the case?
>> Well, I think Senator, the context of that answer was that you were I think was it was the question that you had which was we had decided to export a uh controlled item to Israel. I think I was making the point that I was describing the uh supply chain agreement that we have under the um F-35 program. Mr. Dell has explained. I was also setting out that uh under that program, Loheed Martin moves goods around internationally to support uh the maintenance and sustainment of the platform, but it doesn't change what our obligations are under and then how the regime works. So Senator, as you know, if the if Loy Martin needs to move that item into Australia, they will need an import permit. They want to take it out of Australia, they need an export permit. If it's a controlled item, it's still owned by the United It's still owned by Loheed Martin. It's still their supply chain. But when it's coming inside Australia's jurisdiction and leaving Australia's jurisdiction, it and it's controlled, it will require a permit. Well,
I assume a bunch of the parts that are going for the F-35s for Saudi Arabia are going to be going from Australia to the United States for assembly in the United States and then export. Orcus Pillar 2 says you don't need an export permit to go to the United States. Or am I wrong in that? Is that not in place?
>> Uh, you're half wrong, Senator, or half right. the the under Orcus pillar 2 and Orcus more broadly we have sought to streamline our export control arrangements with the United States uh there is however an a list of uh of technologies excluded from that exemption so it depends on the technology you're talking about terms of the item that you're talking about whole range of things particularly sensitive issues sensitive things on the that are controlled will be excluded from that
>> it would be under its own terms an arrangement between Australia and the United States for the sharing of military um um equipment and knowledge. It would be bizarre in the extreme if that didn't include the parts for a US controlled fighter um jet fighter system. Are you saying the F-35 parts are not on the list? They're not not subject to so then you know well what the bloody hell are you doing if that's the case?
>> I'm losing track of the question Senator I think
>> you said they're only covered by Orcus Pill 2 if they're on the list and I'm pointing to you it would be bizarre in in the extreme if fighter parts for a US designed and controlled fighter plane were not on the list. So
what I was referring to was the excluded technologies list. So if it is on that
>> it would be bizarre if they were excluded on the list. It's US technology for a US weapon. It would be bizarre if they were excluded. >> Are you saying they are excluded?
>> It would not necessarily be bizarre, Senator. As we've discussed before, there are whole range of items that would go into a complex capability like the F-35 that would not necessarily be controlled. and would therefore not require a permit a permit under the defense control.
>> What I'm pointing out to you is the F-35 parts to be exported from Australia to the United States will not require a
David Knox, first assistant secretary, defense trade regulation and industrial collaboration. Um, let me just add a [clears throat] little bit to that. So the Orcus license free environment that you're talking about um provides a significant range of technologies on the DSGL that can move between Australia and the United States and the UK license free but not all. And I think Mr. Jeffrey was referring to what's referred to as the ETL or excluded technologies list. And there are some items on that ETL that will not be able to travel license free and they will need um a license or a permit in our context and some of those are in fact parts related to the F-35.
>> All right. Um, [snorts] are you saying that Australia can refuse to export parts to the United States even though we're contracted and obligated to provide them as a partner to the F-35? Are you saying that there's some independent sovereign capability for Australia to say actually notwithstanding the partnership and the obligations to produce the parts and feed them into the system there's some sovereign capability for Australia to say actually we're not going to send them to the United States?
>> So I think what I said Senator was [clears throat] there are some aspects of uh what is on the ETL that will require a permit.
>> All right. Um, we come back to the point that the United States could choose to extend the F-35 project to any country regardless of their human rights um record, regardless of our own strategic interests. And we don't even get a letter. We don't even get asked. And once the US decides where the planes are going, we pump them in. We pump the parts into the supply chain. That That's the reality, isn't it, Secretary? We're not a partner. We're a I don't know. We're a contracted partner. They decide where to go and we don't even get a letter. Do you seriously think that's a partnership?
>> I think that the the the terms of the partnership benefit Australia. There's there's there's obviously that the terms of the partnership does not give Australia a veto over certain sovereign decisions that the United States government might make, but that we have a partnership. We have the ability to input on important aspects of the program. That's the nature of the partnership and it is very successful and Australia's voice on those issues that are covered by the partnership. uh are made made often and they are listened to by our US and other partners.
>> Minister, does your government, the Labor government, have any concern about Australia um supplying parts, sometimes the only parts for fighter jets that are now being sold to Saudi Arabia? Um, given the human rights record of Saudi Arabia and given the role that Saudi Arabia has taken in the civil war in Yemen, do you have any concerns at all about Australian industry being a critical profit-making part of that?
>> Uh, Senator, I think um the last part of your question really reveals where you're coming from and we've canvased this so many times. uh you object to the existence of a defense industry and you object to participation of Australian companies in such an industry and you
object to the relation minister if you if you don't want to address the human rights record of Saudi Arabia Senator Shou >> and respond in that way it's not your time to interject I mean
>> does you no credit >> Senator Schub thank you minister
>> Saudi Arabia is the
>> thank you minister
>> I think the point that officials have sought to make is that this is a very long-standing partnership. It's a very important one for Australians national defense. Uh it allows us access to a very significant capability that is critical to our national security. Uh and it has downstream benefits for some of the industry partners that are also critical to our national security. Do >> you have any more questions? >> And it's on that basis that we participate. >> Um you disagree with that. I know, Senator, because you've raised it on so many occasions in this minister, but it's an area of elemental disagreement between our
>> Well, Minister, I've asked about the ethics of supplying F-35 parts to Israel while it's engaged in a genocide in Gaza, and we get the bizarre responses from your government that only non-lethal parts have provided. It's embarrassing for you, I know, but that's your response. I then ask about the ethical issues of providing F-35 parts to a regime like Saudi Arabia given its human rights record and its appalling record in the conflict in Yemen. Are they also non-lethal parts or is this just a an ethics-free moral free vacuum because Australian industry makes some money from it? I mean, would you address the issue the address if you can for once the moral and ethical issue about supplying to Israel and Saudi Arabia and don't try and avoid it. Address the moral issue for once.
>> Do I have the call, chair?
>> Well, you do, Minister. Depends how you
choose to answer. Uh Senator, it's been explained to you and to the committee on many occasions that Australia takes its obligations uh around uh our export control arrangements very seriously. Uh you have I think at this point engaged in many hours of conversation with officials particularly uh Mr. Jeff about this question. um you wish um for a different arrangement to be in place, but our arrangements respond to our international obligations. We take them very seriously. Uh we have the administrative arrangements in place to enact um and respond to those responsibilities. We do consider continuing our involvement in the F-35 program to be a very important part of our national security arrangements.
>> All right, I'm going to move the call around. Senator Collins, I think you might have some questions.
>> Chair, uh uh my questions on the puppet Thank you. Um during the October round of estimates, defense officials were reluctant to say that Australia had signed up to accept 10,000 PNG nationals under the new puckpuck treaty. Uh we then uh and and that was um at the time said that it was a a a PNG number, not one of ours. Uh Minister Miles has now has since said that it is a shared ambition. So, we're just wondering whether we can confirm whether that number is something that is shared with us, whether the 10,000 is something that
>> Uh Susan Bodell, first assistant secretary for the Pacific. Um Senator uh as the uh minister has indicated and and the prime minister has made similar comments, they both have ambitions of of re reaching high numbers in the future, but as they also announced, we're at the very early stages of working with uh our newest alliance partner uh to work out the pathway for that recruitment. We have commenced the uh consultations with uh senior officials from the Papu Guini government and are together working on a pathway towards uh establishing um a suitable rec recruitment pathway that meets the requirements of both governments. Those uh consultations are in the very early stages.
>> Okay. So no no number has been settled.
Uh,
no, not at this stage.
>> So, I mean, it's been quite a few months now. Do you think it's going to be revised down to just a few thousand or is 10,000 quite a reasonable number to be expecting?
At the moment, we are working out the pathway and that's going to dictate um the numbers numbers of of that magnitude happen over a long period of time. uh and the pathway that the two governments agree on once they have um established that policy will dictate how long it will take to reach certain numbers
because I guess the the the issue would be and this is going to be a question but the issue would be that if you do have uh 10,000 PNG nationals join joining the defense force uh there are caps uh on the number of personnel that you can have in the army um does that mean that that 10,000 will end up displacing 10,000 Australians that will want to join the army.
>> But Senator Collins, Admiral Johnston, if I could help you there. So I think the 10,000 number that's been expressed by our ministers and puppet guinea ministers is a number that can occur over time. I don't expect to see 10,000 in the first year or second year. Our focus very much is on making sure we get the pathway settled well and that it is successful. It is a very important initiative to the government of PNG as it is to our country. It it's a has enormous strategic value to it. So we're making sure that we can establish a pilot mechanism that has the ability to scale up over time. But there is a lot of work to be done to ensure that as we go through and making and meeting the requirements that we have for Australians entering the Australian Defense Force also would apply to Papy Naginian citizens that we are able to build to that standard to make that pathway successful. So those numbers uh will prove initially to be constrained as we bring people in. we make sure the mechanisms are working satisfactorily uh with that ambition over time that this could be a very successful means in a variety of circumstances. And you could see if we were in an environment where we had to increase the size of the Australian Defense Force quite substantially, having this as one of the means to bring more people into the defense force and enhance that capacity has great utility for us.
>> I agree. But do you think that when you're if we're focusing on the pathway now um you know there are constraints with the number of personnel that we can have? We do have a recruitment drive. Uh are you discussing whether um whether a an Australian applicant might have to be prioritized over a PNG one or vice versa uh in terms of trying to get these numbers?
>> Senator, at the moment, as we've discussed, we're not meeting our recruitment targets. And while the numbers that are entering the the defense force are improving, we're not in that problem where uh we have yet met our targets with Australian citizens seeking to join, which is why this initiative is attractive as it is for those other uh countries that we've opened to enter the defense force. I think we will be able to meet both ambitions in terms of that we will open up the array of potential positions in the defense force and it will be a balance between what we need and providing Australians the opportunity to enter the defense force as well as puppy nagginians but we have even at the moment in the order of our recruitment targets exceed 8,000 people in a year so that number as we seek to grow the force over time will increase which will mean the opportunities to draw both from Australian citizens and Papa New Guinea citizens will increase over time.
>> Sure. So that 8,000 would include both Papa New Guineian citizens and Australian citizens. >> Yes. >> And uh you said in um October October estimates that the number was a was being negotiated with the Papainian government. uh is that something that you're aware of is still happening or have you just totally put that to the side so that you can work out the
>> in the agreement? I don't think a fixed number is represented in the treaty arrangements or the agreements that have been made between the two countries. Uh it has been as we mentioned earlier a statement by ministers in both countries. So we've got a very clear target of what that may grow to over time.
>> Okay. So the the the turning to the elig elig eligibility for the program uh it appeared to only extend to permanent residents already in Australia. Uh the minister has said we're looking at uh direct recruitment from Papa New Guinea into the ADF and that these personnel will become Australian citizens. And so can you give us, you know, in terms of the pathway that you're sort of talking about now, can you give us a sense of how long that might take? So if you've got um Papa New Guinea nationals coming to Australia that would have to become citizens, is that going to be quite a speedy process or will that take some time?
>> Senator, if I could talk to the first part. So as of the 1st of January this year, we started um recruiting open recruiting for permanent residents who were Papa New Guineian citizens. uh we had done that previously for our five eyes partners. So you were a permanent resident in Australia and you had to have not served in uh foreign military for two years lived here for 12 months and of course meet our entry standards to join the Australian Defense Force. opened for Papa New Guinea and per permanent residents as of the 1st of January and that's the initial pathway while my colleague works [clears throat] out the longerterm negotiations through the ongoing park treaty conversations.
>> Okay. Has it been successful? Have you had much take up?
>> Uh we've had 25 applications to date.
>> Okay. And have have they all been successful? They've all
>> they're in their early stages. They're
terms of the um the papineian well the residents that would have to become citizens. So just just tell us about the pathway and especially uh you know for the second stage for the citizens that would come Papa New Guideian citizen residents that have to come to Australia. Are we talking weeks? Are we talking months for that process for them to be able to become citizens?
>> Senator Collins I think many of your questions go to you know quite detailed questions of implementation. Uh at the moment we are actively discussing this with with our partners in Papa Newu Guinea. Um that's planning that we do together and it's a respectful approach that involves acknowledging their interests and our interests and that's the way good partners cooperate with one another. And the consequence of that is that we're really not in a position to preempt the outcomes of those discussions which are appropriately happening between countries. So some of the things you are asking officials to provide information about are yet to be settled and it's really not uh it's not possible or appropriate to to flag them here while those discussions are underway.
>> Okay. Well, I'm I am pleased to hear though that there has been some take up and um hopefully there's a little bit more on that. I would just like to quickly turn to the East Coast submarine Okay, thank you for your patience. Um, on page 108 of the Defense Strategic Review, it states that, and I quote, "A decision on the location for this facility will be made late this decade." End quote. uh but we have heard since from the minister that it's not and this is another quote it's not in the 2020s the making of that decision is around 2030 and beyond. So I'm just wondering why there's been a a big shift in that timeline from uh late this decade to one in the 2030s.
>> Uh thank you Senator Celia Perkins uh deputy secretary security and estate. [snorts] Uh as the deputy prime minister has said when he has referred to the time frame, he has quite explicitly said that our focus uh this decade uh needs to remain on the important work to prepare uh for the optimal pathway particularly through the priority works at HMA Sterling uh and and the Osborne site and that's where our focus will be and we will return um to consider a Chevan East Coast base in the 2030s and
beyond. So, I'm just intrigued. Why does it why can't we make the decision now? Why can't we sort of turbocharge that? I mean, it's we've heard all day about the strategic circumstances and how quickly they're deteriorating. We heard just before about, you know, the second time in one year that the PLN has been circumnavigating Australia. So, why why is this decision pushed back so many
years? >> I can only refer you to the deputy prime minister's comments. Thank you, Senator.
>> Does the minister acknowledge that uh there has been a shift in this timeline?
>> Uh the minister has publicly stated on more than one occasion uh that the consideration of the sighting of an East Coast base is a decision that will be taken in the 2030s and beyond.
When does defense assess that an east coast submarine base will actually need to be operational? Because we're talking here about a decision. Uh these things take a long time to build. When do you assess that it's actually going to be
>> could so uh senator so Australian submarines already operate along the east coast and we do have um the uh the ability to use uh Sydney facilities. A number of our submarines have have um operated out of other ports. I think that's so we're not we're not operationally restricted along the east coast at the moment. Obviously a forward operating base gives you some some enhanced uh capacity and and and and that that was that is important but I think the in an operational context uh the east coast is is well in play in terms of submarine operations.
>> Uh absolutely. I believe though that we are uh preparing for nuclearpowered submarines. So can any of them um are any of them able to host a Virginia
>> There are a number of um existing sites that uh have in the past hosted uh uh visiting uh nuclearpowered submarines and I think the chief of navy who will be much more qualified to respond is here. Thank you.
Good afternoon, Senator. Vice Markham, Chief of Navy. Uh we have hosted Virginia class submarines in Australia at a number of different East Coast ports, including Gladston uh in Queensland uh and the port of Brisbane. Um most recently, uh the requirement, sovereign requirement for an East Coast submarine base has been discussed for some time. Uh and the timeline for making a decision is later this decade
Okay, thank you so much. That's it from
>> All right. Thanks a lot for that, Senator Collins. Um, >> I was going to call you Hendai there for a moment, but um, got to stop following your socials. Um, you have the call,
>> Thank you very much. Yeah, look, just to clarify, uh, obviously as Senator Collins has prosecuted so well, the government has agreed we need a new East Coast submarine base, but can you say
>> Um, I I would say that I think the way in which we will work through that is in national defense strategy and and that evolving strategy. as the state capability manager uh will work closely with Navy on the uh and the Australian submarine agency on on the um the work that would be required to identify the best site and the way to build that. Um
>> do we have a date?
>> As I've said, the deputy prime minister has been clear uh that his direction to us is that the the the decision-making framework around that sighting will occur in the 2030s and beyond.
>> All right. Look, I just want to turn to uh some questions in relation to Mr. Miles's social media. Uh and Mr. Morotti, you might help with the best person to answer this question. Is the department aware of or did departmental the media team provide any com support to a social media video put on Mr. Miles's Instagram page on Saturday the 7th of February that opened and with a quote. So this weekend if you are re-watching heated rivalry to get yourself in the mood for the Winter Olympics. So for those at home this is a program described by its own creator as a harlequin romance fantasy written by women and consumed by women. Um, but I I guess I I am a bit concerned because it is an R an R-rated program with some fairly explicit scenes. I I haven't seen it myself, chair. >> Uh, but I'm just wondering whether the
>> neither have I.
>> Oh, good. Thank you. >> Thank you, Secretary.
>> It is after 6 p.m. It's okay.
Uh I'm just wondering whether anyone in the department provided the deputy prime minister with support in relation to the production of the social media video uh which includes the reference to heated rivalry.
>> Uh Senator John Reed, Deputy Secretary Governance. Uh as far as I'm aware, no. Uh we wouldn't ordinarily uh support
I've got a question in my pack that I'm actually not going to read out and I'm going to blame someone in my team for that. Um, but the Guardian reviewed the show and it made some fairly explicit comments in relation to the content of uh this particular film. Uh I just in all serious no seriousness is is it appropriate for the deputy prime minister to be referring to an R rated film in his social media?
>> I'll take it on notice. Senator,
>> do you have any other comments at all?
>> nothing to add to the
>> Do have you heard of the the this particular film or watched it yourself?
Uh, no, Senator.
>> No, I haven't either. Um, could you maybe ask the deputy prime minister to review whether this is appropriate to include in his social media?
>> No, Senator, I've taken your question on notice. Um, I I I don't intend to add advocacy to my list of responsibilities. I represent the minister here at the table.
>> All right. I will I will uh I would take that as a no quite probably quite reasonably. Thanks, Minister. Um, look, I just wanted to return to the last estimates uh and talk about the the renovation of the Russell office. So, there's just a bit of just wanted to raise some concerns about the total cost of the renovation. We were told it was 2731, not the previously reported $800,000.
get the >> uh so Senator, there's two different references um that you'll uh that you have there. Um the evidence that we gave uh was in relation to the $2,490. Uh that was the the cost of refurbishing office space uh for use by defense portfolio ministers and that was around signage. Um uh that was and that was all that was that was all that was done and I can break down those costs for you around the signage uh that was installed. Um there was separately uh your reference uh to I think you said almost $800,000. There was separately media reporting at the time around other refurbishment. Um this referred to a an estate works program approved refurbishment of uh executive offices that are inside the Russell precinct. They're different offices than the one we were talking about last estimates. Um, as part of that program, there was an office space that was refurbished um at a total cost of $796,000. Uh, I can break those costs down for you as well. That was never used by any defense portfolio minister. Um, it is uh now used by executive staff. uh it uh so there is some confusion around uh which offices are used. Again, the cost imposed for the refurbishment of the office that is now used by defense portfolio ministers was $2,491.
Well, I don't think we were confused in relation to we were referring to that media report and we were asking about the cost of nearly $800,000 and we got back something that obviously now relates to some signage. So, can you just take us through what the breakdown of the nearly $800,000 was?
>> Certainly, Senator. So, this was this was a separate program. Um it is not related to uh offices that are used by defense portfolio ministers. Um it involved the construction of walls, ceilings and partitions. Uh some installation of joinery, some electrical installations, some hydraulics that needed to be put in, some additional security, some mechanical installations, and some signage. Um as I say, that all amounted to $796,000. uh it was offered as a space for portfolio ministers after the refurbishment was done. Um but the other space that I've referenced which involved only a $2,000 uh refurbishment was used by the officers. The other space um that involved the larger refurb has not been used by minister.
>> So it was offered to to um Mr. Miles.
>> Uh I think it was offered it was offered to our portfolio ministers. Senator
>> to all of your portfolio ministers. >> That's right, Senator. >> So never used, but it was used by senior leadership of defense. >> Used by senior And so when we were asking about this at last the last estimates, why didn't we receive that information,
>> Senator? I think that was my mistake. I think I misunderstood your question. I think I corrected that in writing. I think I corrected it with a question on notice about the $2,000
>> because my understanding is that the cost of nearly $800,000 for the Russell office which was offered up to portfolio ministers but not used went uncorrected in the media for the best part of four years.
>> I'm I'm not sure Senator I'd have to take on notice when different comments
>> Right. So it would have been preferable if we'd understood that the 2731
>> 2491.
>> Oh 2000. Right. We've got 2491 was actually just for some installation of signage. >> That's right. >> So it wasn't a renovation. >> No, Senator. >> And who what did the sign say?
>> Uh if I can recollect, Senator, the sign says deputy prime minister suite or It's simply indicating uh a suite that's used by our portfolio ministers.
>> Right. So it says deputy prime minister suite
>> or words to that effect. I'm happy to take on notice. I don't I don't have in my mind what what the science is
>> but he's not using the suite.
>> Sorry Senator, if I can be if I can be
very clear. >> I think the official has explained to you that you are confusing two quite distinct spaces uh which he has
described. Oh, I'm just seeking to clarify that, Minister. Yeah. >> So, >> the signage which the signage is for which office?
>> The the signage was installed in the office which the deputy prime minister and other ministers now use, >> right? >> At a cost of $2,491
>> and that's a separate office from the office that was refurbed at a cost of 79 796,000. So, where is the office that is used by the deputy prime minister? Uh, >> Oh, it is in Russell, but it's a separate office. That's right. Okay. >> Are they near each other?
>> Same floor? >> No, Senator.
>> And so, why wasn't this office that was refurbed at a cost of nearly $800,000 taken up by the portfolio ministers?
Uh Senator, if I might, Celia Perkins, Deputy Secretary Security and Estate, um uh as Mr. Reidy has said, um uh we'd undertaken to develop another office. One of the pressures in Russell offices over the last period of years is that our senior leadership group has grown. There are more group heads and service chiefs, people serving at the deputy secretary and and threear level. We had always uh maintained an office suite in the Russell complex for ministers. I recall uh the building F uh office. We've always had a a space in um Russell. Uh but over time as that uh group head and service chief cohort grew, we we consumed all that space uh with our leadership team. when um the government um uh uh commenced its first term, our portfolio ministers um uh wanted to work from Russell um uh and and we didn't have a space for them. Uh the the office with signage that Mr. Reed referred to was an existing um band three office that we repurposed. Um but it we we took a decision internally that we had we had a need for more space for that cohort. the office that was
>> Can I sorry to interrupt because I know we're talking about two separate offices. So just to make it clear where which floor is the office that the ministers are using in Russell is it on a separate floor. Can you just so we can identify it? >> Second floor. >> Okay. So the second floor office is being used by Mr. Miles and other
portfolio
>> portfolio ministers. Yes. >> And where is the office that was refurb that's not? >> It's on the fifth floor. >> Okay. So the fifth floor office that was offered up by to the portfolio ministers and did they declined to use that office?
>> Yes, Mr. Miles um uh uh uh in some engagement um uh uh was happier using the suite that had already been
>> so why then was the fifth floor office
refurbished? As I said, um, we had always maintained a ministerial office suite. Um, uh, we had more people working in Russell at that wreck level. We were in the middle of a refurb and it it was a decision that we made to refurbish a space to a stand. It's a common standard for all all of our officers um that would give us more capacity for both the increase in the group head and service chief cohort and portfolio ministers to have a space to
work with us in Russell. Do you mind if I ask for a timeline as to what happened when the the refurbishment was commissioned? When it was offered, when Mr. Miles declined to use that fifth floor office?
>> I think we'd need to take that on not
on. I'm sorry. I meant to say, could you provide that on notice? Was it because he didn't like the view or the couches couches weren't as comfy? >> Same view. >> Same view. Is there any other reason why the fifth floor office wasn't as good as the second floor office? I think your
question assumes certain things about Mr. Miles's decision making, Miss Perkins, is undertaken to give you a timeline.
>> I'm I'm at liberty to ask the question, Minister, so I'm just asking that question. >> Is there any other reason why your >> That's why I'm asking the question, Minister. Is there was there any other reason why the fifth floor office offered up to the portfolio ministers
was not taken up? I couldn't add to my previous comments. I wasn't involved in that um engagement.
>> All right. Well, if you could if you could advise on notice why that wasn't taken up, just so we can understand precisely what's happened because it is a lot of money and if $800,000 was incurred when perhaps arguably it shouldn't have been, then that's obviously a a live issue for Australian taxpayers.
I I would say it has been developed in line with a a standard fit out uh as part of the rolling upgrades to the Russell offices which are now dated um and is being used actively by um uh by a deputy secretary.
>> So is it also correct to say the department of finance also spent $600,000 fitting out a new office for in Jalong for Minister Marles?
Senator, you have to refer that question to Department of Finance about what whatever costs they may have may have
incurred. I >> But are you aware of Can you answer that question?
>> Senator, I I am aware that after the 2022 election, there was some work done in Jalong uh by by the Department of
>> Yeah, there was and and it was a ministerial office, wasn't it? So, a separate ministerial office was established in Jalong.
>> I think the official has referred appropriately to the Department of Finance. Defense is not involved in managing
I'm just confirming this was a ministerial office though.
>> The office that Mr. Miles Mr. Miles has a ministerial office in Julon. Yes.
>> And that $600,000 was spend spent fitting out his ministerial office, not his elected office.
>> So I I I don't I don't know, Senator, if if if the um if the Department of Finance incurred those costs, you'd have
>> Right. Could you please find um could you please take that on notice and provide any further information
>> to the extent that our department can send it? Yes.
>> Um or if anyone else in the in the department has got knowledge of that because if it's a ministerial office I would have thought the department would have plenty of information about the
>> Certainly senator we support the running of his ministerial office in Julon. What I don't have in front of me is
>> does Minister Miles use a defense issued or defense IT administered phone and other network out of that >> Um, so there's no suggestion for instance that any defense resources are being used by the minister for any purpose other than for ministerial purposes?
>> Certainly none that I'm aware of.
Um okay. All right. I just want to and I know we have committed to wrap up by dinner. Um in October you took on notice questions about how Minister Miles choose chose to manage conflicts of interest regarding his ministerial duties. The the answer we got back was fairly vague. Can you just walk me through what steps the minister miles makes or has made to manage conflicts of interest in his portfolio? Clearly, we're talking about a very substantial amount of money, $59 billion a year. Uh could someone step me through how he manages his conflicts of
Um at a at a general level, Senator, um on occasion where perceived or potential conflicts of interest have arisen with the ministerial responsibilities of deputy prime minister. Um he has signals his intention to recuse himself in relation to departmental engagement. um uh and he has put in place arrangements in writing with uh alternate portfolio ministers to manage those issues. I'm not aware senator of other arrangements he might make for instance in relation to cabinet things that might happen within the cabinet room but where it relates to engagement with the department and briefings that the department might be required to provide or or support arrangements put in place with alternate portfolio ministers.
>> All right. If I could just ask for more detail on notice because we did get a fairly vague answer. So if we could just get some specifics on notice, we would be grateful. Um I just want to quickly move in relation to questions were taken on notice last estimates about the ministerial action the deputy prime minister took when he learned of reports into the procurement activities in the ASD. Uh so I'm not just to be clear not seeking any revelation of I just details uh whatsoever. I'm just seeking a very plain explanation as to when the minister found out and what the minister did um which I think are fairly within the remit of this uh committee.
>> Senator, I don't have anything to add um to what we've provided in relation to what the department is aware of. I think your questions went to what the what the deputy prime minister did in relation to
those accusations allegations >> and when minister miles was first made aware uh of the inspector general of intelligence and securities investigation into the procurement activities of the ASD.
>> I I don't have anything to add to the evidence we've provided. Senator
>> Minister, do you mind taking that on notice? >> Thank you. >> I can do so. >> And just Thank you. And when was Minister Marles first made aware that the probe extended to contracts regarding Director General Bradshaw and her husband as well?
>> I can't confirm um the assumption in that question, but I'll take it on notice and that matter can doubtless be addressed in any response.
>> I I I accept that. So I'm not asking about the substance of the allegations. I'm just asking when Minister Marles first became aware of the investigation and I just quote Michael Reidy in the Finn review wrote that Minister Marles office is regularly brief by the inspector general. So that was reported how regularly is is he is he briefed? >> Sorry, Senator. How regularly
>> just in order to take that question potentially on notice which inspector general? The Inspector General of Intelligence and Security or
>> That's right. >> Okay. the inspector general of intelligence and security. So I'm just keen to understand how regularly he is
>> I will take that on notice.
>> If you can take that on notice. Uh was Minister Miles made aware of the investigation and the allegations within it before or after Mr. Bradshaw's appointment? Miss Bradshaw's appointment in November 2024.
>> I'll take that on notice, Senator.
And then I appreciate that you don't have personal knowledge of this minister. Um I assume I I assume so. So and then I'm seeking on notice what action did Minister Marles take after he was first made aware of the investigation? So did he seek to have a conversation with Miss Bradshaw? Did he make any requests for her to stand down while the investigation continued? How many meetings has Minister Marles had with the director general Bradshaw, Miss Bradshaw since January 2025? So, if I could also ask you to take those on notice and secretary to the extent that you're able to assist as well with those questions. If you could also take them on notice.
>> I'll take it on notice, Senator, but I'm not not aware of anything in relation to
>> All right. Thank you. Thank you very much chair. I will leave my questions there >> and thank you very much everyone.
>> So I have some good news. The department can go home. Yes. So relief uh as well as the committee has agreed to release ASD uh aspie uh as well as the veterans review
Okay.
>> just just hang on a second. Sh. Not
>> I'm not saying.
>> All right. Um, on that note, sorry on that note. Thank you, Minister.
I think uh on behalf of the government, I I have had the great pleasure of appearing alongside Mr. Moriarty uh for a number of years now in these estimates hearings. Um I've appreciated working with you, Greg. I know you have a new task ahead of you and I'm sure that you will execute your responsibilities as diligently there as you've done here. Um, but I thought uh I should acknowledge that this is his last estimates and the committee may wish to do so as well.
>> Thank you. >> Thanks, Minister. And I guess on behalf of the committee, I just want to echo uh what you've just said. Um, thank you, Greg, for your service. Um, I know we've enjoyed having you here on the committee in estimates. I'm I'm sure >> you've enjoyed it >> and I'm sure you have enjoyed as well, too. But um I think also it's fair to say uh you're a quality candidate and individual who will do uh great work in representing the Commonwealth in the United States. Uh with your experience uh you are the right person obviously to um fill very big shoes, but I'm sure you will do it very well. um uh many um individuals who have taken the role of ambassador in the United States um do so with um great recognition of the service and the quality that you will bring to that office and I look forward as I'm sure many members of the committee maybe even meeting you in Washington uh one day. Uh but can I just on behalf of the committee congratulations and uh we wish you all the very best whenever you officially start that role uh unless we decide to have a spillover in the next few weeks and get you back here but [laughter] probably no I won't jinx it. Um I'm not sure if Senator Henderson also wanted to add some words as well
too. >> Chair, thank you. Look, I just want to also echo our very best wishes to you. Secretary. Um I know Senator Cash, if she was here, she would also want to reiterate uh our congratulations, which of course um she has publicly said that in her statement. Uh we know you have an incredible impressive track record. There's obviously very very strong bipartisan support for your appointment as the next ambassador of the United States. Thank you so much for your service to date. uh we wish you all the very very best in this very important role and uh I too look forward hopefully to visiting one day uh in Washington. So thank you
>> Thank you Senator Chair if I could just please say thank you uh for that night by the way and I just want to say it's been an honor >> to serve as the secretary of the department of defense. This is vital work uh and it's been a privilege to be part of the leadership team for this
>> No, my pleasure. All go well and look forward to seeing you over in the US. >> Congratulations. All right, everyone. On on on that positive note, happy to say the department, all the officers of the ADF are now happy to go and you are released. Um, we will have the Australian Submarine Agency um after our dinner break. Thanks everyone. Enjoy