10 October 2022
MICHAEL ROWLAND: Okay, let’s come back to politics, and new government figures have revealed major defence projects are running a cumulative 97 years late and billions of dollars over budget. Defence Industry Minister Pat Conroy joins us now from Canberra. Minister, good morning to you. So how has the situation got so bad?
PAT CONROY: Well, it’s got so bad – good morning, by the way – it’s got so bad over the last nine and a half years because we had a last government that just didn’t focus on the key issues. They were very happy to make big-spending commitments, but they didn’t follow through with the actual management of these projects. And that’s why we’ve got a situation where 28 projects are running cumulatively 97 years late, six and a half billion dollars over budget, and that means taxpayers are paying more and the men and women of the ADF are not getting the equipment they need when they need it. And that’s a national disgrace.
MICHAEL ROWLAND: Wouldn’t Covid and the lockdowns and stops to production caused by the virus have played a factor outside the control of any government?
PAT CONROY: Well, Covid has had a role, but, quite frankly, the vast majority of these delays have been driven by other factors. Let me give you a couple of examples: the $3.7 billion offshore patrol vessel for the Navy, the successful tenderer was instructed by there last government to delay the project to start negotiating with the unsuccessful tenderer to include them as a subcontractor in the project. That delayed the project, and that’s now facing 12 months’ delay.
Another one is the Hunter Class frigates, a project where we’ve seen a 50 per cent increase in costs to $44 billion and a four-year delay because the last government lied when they said that they were getting a proven off-the-shelf design when that project, in fact, the design is happening right now. So a four-year delay because the last government lied about what they were purchasing on behalf of the Australian public.
MICHAEL ROWLAND: Going back to the offshore patrol, German-designed offshore patrol vessels, are there any concerns about the seaworthiness, for instance, of the first vessel?
PAT CONROY: Well, we’re working through some issues around civilian registration, civilian licensing and civilian safety standards. But that hasn’t driven the delays at the moment. As I said, the main delay driver has been the ridiculous contracting strategy the last government forced upon the German maker, Lürssens. We’re dealing with those other issues now, but the 12-month delay is related to other issues mainly.
MICHAEL ROWLAND: Okay. Okay, but I’m going to ask the again – it’s very important when it comes to any vessel: are there any concerns about seaworthiness of these boats?
PAT CONROY: Well, this project, we’re working through the details now. As I’ve been advised there are issues around civilian safety standards. These aren’t in service yet, and we’ll make that all the issues are resolved before they do enter service. And we’ll obviously make sure that the men and women of the Royal Australian Navy get the equipment they need.
But this is an example of the last government really making very silly decisions around contracting strategy that really hamstrung these projects from day one.
MICHAEL ROWLAND: Today you’re announcing monthly reports on where things are at with defence projects. Practically, I mean, what difference will that make? How will that help?
PAT CONROY: Well, we’ve announced six key initiative that will improve management of defence projects. The first is establishing a standard-alone project office within the Department of Defence. Secondly, we’re requiring monthly reporting on projects of concern and interest to myself and the Minister for Defence, the Deputy Prime Minister. Thirdly is establishing formal criteria for projects to become projects of interest and to come off that list. Fourthly is more resources for troubled projects. Fifthly is adding – changing the culture of defence, and sixthly is having regular Ministerial Summits.
What’s critical is having ministerial energy and oversight of these projects to bring industry and defence together to resolve these problems. That’s how we solved very challenging projects when we were last in government, for example, the airborne early warning project called Wedgetail. That was resolved by the then Minister for Defence Procurement, Greg Combet, bringing industry and defence together. So all these reforms are about getting more resources to manage these projects, changing the culture of defence, but overwhelmingly increasing ministerial oversight and energy.
The last government had six defence ministers in nine years. Goldfish lasted longer than Coalition Defence Ministers. And that meant that the last government wasn’t doing its job of overseeing this massive portfolio.
MICHAEL ROWLAND: Okay, yeah, just another topic – you’re a minister, obviously also a government MP. Pat Conroy, should the government honour its promise to bring in in full the stage 3 tax cuts?
PAT CONROY: Well, our position on the stage 3 tax cuts hasn’t changed. I’ve seen a lot of media speculation over the last week, but as the Prime Minister confirmed yesterday, our position is unchanged on the stage 3 tax cuts.
MICHAEL ROWLAND: Would you like them to come in in full?
PAT CONROY: Our position on the stage 3 tax cuts hasn’t changed –
MICHAEL ROWLAND: I know. I know what the government’s position is. I’m asking your view.
PAT CONROY: And that’s my position.
MICHAEL ROWLAND: You’re fully in favour of stage 3 coming in in full?
PAT CONROY: I’m fully in favour of our position. I’m a minister of the Albanese Labor Government, and our position is that the stage 3 tax cuts approach has not changed.
MICHAEL ROWLAND: Okay. And you’d like the government to honour any election promise, right?
PAT CONROY: My position is the government’s position, and I fully support our position.
MICHAEL ROWLAND: It’s an election promise, though. You’d like the government to honour this election promise?
PAT CONROY: I fully support our position on the stage 3 tax cuts.
MICHAEL ROWLAND: Do you fully support governments honouring election promises?
PAT CONROY: Absolutely.
MICHAEL ROWLAND: Okay.
PAT CONROY: Obviously that’s really important to do that.
MICHAEL ROWLAND: Pat Conroy, appreciate your time. Thank you.