10 October 2022
LIAM BARTLETT: We're joined on the programme this morning by Defence Industry Minister Pat Conroy. Minister, good morning.
PAT CONROY: Good morning
LIAM BARTLETT: Minister, the Defence Minister, your colleague Richard Marles, has well and truly put the boots in, talking about flushing money down the toilet. You're talking about bungling the portfolio. You blokes are not holding back this morning.
PAT CONROY: No, we're not. And the reason we're doing that is it's important to level with the Australian people about what we've inherited in Defence. We've got 28 critical projects running cumulatively 97 years late and six and a half billion dollars over budget. And that means that the brave men and women of the Australian Defence Force are getting the equipment they need, when they need it, and the taxpayer is paying more, and a lot of this is the responsibility of the last government and a lack of Ministerial oversight. The average Defence Minister in the last government lasted 18 months. Goldfish lasted longer than Coalition Defence Ministers.
LIAM BARTLETT: So which projects are set to be axed?
PAT CONROY: Well, we're not talking about axing projects, we're talking about fixing up projects that are running late.
LIAM BARTLETT: Well, you must be talking about delays or delays to the point of axing or something. I mean, you're softening us up for something, aren't you?
PAT CONROY: Well, Liam, what we're doing is being honest with the Australian people about what we're facing and we've given them a commitment today that, one, from here on in, we take responsibility for what occurs. And two, we put in place reforms to improve the way that we can deliver these capabilities. But some of these projects have long-term challenges. One example is the Hunter Class Frigate that are running four years late because the last government lied to the Australian people and said that they were buying a frigate that had been designed and was in service with other navies when it's still being designed today. And so it's important that we be honest and chart a way forward that's measured and responsible with meaningful changes to improve performance.
LIAM BARTLETT: Look, I understand what you're saying and the way you're putting it. I mean, you're absolutely leaving no room for misinterpretation, but again, the timing. So tomorrow fortnight is the new budget, the new Federal budget. Just a pure coincidence, but you blokes have been in power now for what, a few months? You must have known what the books looked like. So I ask you again, which project are you going to just put on the sidelines or axe completely?
PAT CONROY: I'll repeat what I'm saying, this is not about axing projects, this is about fixing projects. The ADF, the men and women of the Australian Defence Force need this equipment. So this is not about cancelling projects, this is about fixing projects. Another example is the offshore patrol vessel that's being built in Henderson right now. We need that capability for the Navy as soon as possible and we are working with Defence and the defence industry to fix that project. This is not about a pre-budget softening up this is about being honest with the Australian people and saying, this is what we're going to do to fix the projects. And that includes establishing an independent project management office within Defence so that there's a greater focus on fixing these projects. It includes things like monthly projects of concern, reporting to myself and the Deputy Prime Minister so that we have Ministerial oversight and energy. To give you an example of how things have slipped, the last government had six Ministerial summits in nine years to fix projects. Three years of the last Labor government before then, there were six in three years. So the last government just wasn't active enough in working with the Defence and defence industry to repair these projects.
LIAM BARTLETT: So, Minister, we all agree that we need the projects. I mean, there's nothing here surplus to requirement. We need them, the country needs them. And I think we both agree, don't we, that there is worsening strategic circumstances. So are you telling me this morning that nothing is going to be trimmed? All these projects will go ahead?
PAT CONROY: The plan is that we deliver these projects, nothing is going to be trimmed. You're absolutely right to say that we face the greatest strategic uncertainty since World War II. The 2020 Defence Strategic Update said that we've lost the ten year warning horizon that we used to have before a major conflict. So we need these capabilities to be delivered on time and on budget rather than being delayed. So today is about announcing reforms to improve the process, to say, the Defence Industry, Department of Defence, that you've now got Ministers that are committed to fixing these projects and being good partners with you to do that and to throw extra resources from the Department, the fixed projects, when they get into trouble.
LIAM BARTLETT: So, it's a better oversight, which no one is going to argue about. But again, coming back to the point that Richard Marles made $6.5 billion over budget in combination, so what happens to the money?
PAT CONROY: Well, the defence budget has absorbed that, which means, typically, that projects are delivered slower than they would otherwise be. So this is not about cutting the defence budget. The Albanese Labor government is committed to spending at least 2% of GDP, so 2% of our national income on defence. And when cost overruns occur in the past, the department of Defence has absorbed that cost by delaying other projects. And that's why it's really important that we avoid this into the future. That's why it's really important that we have Ministers convening regular summits, that we have early warning signs for projects in trouble, that we work together to change the culture so that the ADF get the equipment they need and we don't face further cost increases.
LIAM BARTLETT: Minister, thank you very much for your time this morning.
PAT CONROY: Not a problem, Liam. Have a good morning.