Joint Press Conference, Hobart

SUBJECTS: Defence Estate Community Consultation Sessions; Defence Estate Audit, Defence Industry investment, National Construction Code, Tyndall Ranges, long-spined sea urchins research, Housing 

RICHARD DOWLING [SENATOR FOR TASMANIA]: It’s great to be here in Derwent Park, one of the hubs of innovation, innovating globally for decades now around the world. And today we’re at CBG Systems with Javier Herbon, Managing Director, who are doing some amazing projects, particularly in the defence space. And that’s why we’re very proud to have Assistant Defence Minister Peter Khalil here doing consultations across Tasmania and the over $400 million we invest in defence industry in Tasmania. And, of course, are proud to have our Cabinet Minister Julie Collins with us as well, who I’ll hand to now. 

JULIE COLLINS [MINISTER]: Thanks, Richard. As Richard has indicated, it’s terrific to have Peter Khalil, the Assistant Minister for Defence here in Tasmania with us. Peter has been in Tasmania for the last couple of days. He’s been going around the state talking with the Tasmanian community, particularly in relation to the opportunities for Tasmania to continue to participate in our defence contracting. And we’ve heard over $400 million here in Tasmania from defence contracts. It’s terrific to also be at CBG Systems and to be able to hear directly from them about their work that they are doing and how innovative it is across our defence system but also about some of the interactions that are occurring globally because of the terrific work that they do here in Hobart. It’s a terrific celebration of Hobart businesses, who are incredibly innovative and working right across the globe in terms of that innovation and getting that recognition globally for what is happening here in Tasmania. This company is one of many Tasmanian businesses who are benefitting from defence contracts, who are supporting our local community here with jobs in Tasmania but also having that innovation right across the globe. And it’s terrific to have Peter Khalil as the Assistant Minister here, and I’ll hand over to Peter to talk more about it. 

PETER KHALIL [ASSISTANT MINISTER]: Well, thanks. G’day, everyone. Thank you so much, Julie and Senator Dowling – Richard – for having me here in Tassie, and Javier for having us here at CBG Systems in Hobart. I’ve got to say, I’ve spent a couple of days in Tasmania. It has been sunnier than Queensland here, which has been quite remarkable. I’ve spent time in Devonport and Launceston the last couple of days, as Julie mentioned, doing community consultations with stakeholders right across regional Tasmania around our commitments to defence and the Defence Estate review that has been announced and what it means for Tasmania. And as Julie mentioned, it is really remarkable that Tasmania has over $400 million invested in defence industry. The niche industries, the sort of leading cutting-edge industries that we’re seeing coming out of even just this pocket here in Derwent Park is quite incredible. When I was at AMC yesterday, I think it was, seeing the submarine research that was being conducted at the Australian Maritime College, one of the unique assets that really is not anywhere else in the world – it’s here in Tasmania. Some of the niche capabilities that are coming out of the advanced manufacturing here in Tasmania is unique globally as well. So this is fantastic. And, you know, a lot of people talk about Tasmania and its relationship with defence. Well, Tasmanians are doing the hard lifting and have been for a very long time. Per capita, we have the highest number of Tasmanians in the armed forces and the reserves. There is a real commitment and a long history in commitment to our defence and our national security from this great state. And when I’ve been engaging with people across Tasmania, we’ve discussed what is happening with respect to our estate. You know, Anglesea here, which I’m going to visit, Anglesea Barracks, the longest and oldest continuous operating – operational base in Australia. I think it was 1811 it was first established. Really important. But we’re also making commitments, Defence is making commitments to Tasmania, particularly the new build of a tri-service facility for cadets, another multi-user depot for reservists. We understand the importance of that commitment that Tasmanians make, and we want to make sure there is a better offering of facilities for Tasmanian reservists and cadets. I visited Lake Barrington – I’m sorry I’m talking about Launceston a lot – but I visited Lake Barrington, and it was amazing to see the cadets, the national leadership of the cadets there and the work that they’re doing. The resilience and the leadership of these young people are learning and their commitment to service is really inspiring. So it’s been a great trip to Tasmania, and I want to make sure that people understand the very clear message that there is a strong commitment to Tasmania – over 400 million in defence industry – the commitment to new state-of-the-art facilities that we'll be building in Tassie. We’ve spent – we’ve invested over 20 million in the Anglesea Barracks as well, and we understand the importance of Tasmania and its commitment to our Defence Forces. We’re going through a volatile period globally. We all know that. A lot of uncertainty, a lot of geostrategic instability. But what is certain and what is constant is the commitment that make Australians make, and particularly Tasmanians, to our national security and defence. And I think there is a real template for that here in Tassie, and there has been for a very long time. So it’s important that we honour that commitment and work constructively with stakeholders on the future for Tassie. And it’s very bright. And with that, I wanted – I’ll take some questions. We’ll take some questions. But I wanted to give Javier an opportunity to say a few words about CBG and the great work that you do here. Javier, I want you to come over. 

JAVIER HERBON [CBG SYSTEMS]: I just would like to say that we’re very thankful to the Federal Government for the work, the inspiration that they’re giving us to be part of some of the most important defence projects happening here in Australia. We are a contributor to those projects through our [indistinct] and some occasions directly to the Department of Defence, providing safety systems to our service personnel. So we’d like to thank the government; they’re a big part of what we do. And that’s creating jobs, future R&D innovation for out of Tasmania and out of Australia as well for some export projects. So thank you very much for the opportunity. 

KHALIL: Thanks, Javier. Thank you for having us. 

JOURNALIST: Actually, I wouldn’t mind putting a couple of questions to you, Sir, if you don’t mind. Javier, what are some of the projects that your company is currently working on within our national defence landscape? 

HERBON: In Australia, we’re involved on Hunter Class, the future frigate problem – the future frigate project. And our customer is BAE Systems. Then we’re involved with Hanwha on 8116, Project 8116, also LAND 400 Phase 3, which is the infantry fighting vehicles. And we have been involved on the LAND 121, which is the Rheinmetall trucks. That’s the main defence projects, yeah, in Australia. We’re also involved in many other projects with similar technologies for non-defence projects. 

JOURNALIST: And how important are these projects to the viability of your business long term? 

HERBON: It’s absolutely critical. It’s paramount. It’s what we need. Commercial projects come and go and we have very little visibility of them. We’re more a third, four-tier supplier. While along the Defence project, while they take a long time to secure, they are multi-year projects – eight, ten-year projects. They take a long time to secure and to build that [indistinct] and to start to deliver, but once we start delivering, it gives the business the constant continuity that allows us to invest further in R&D, in other technologies, products and employment and it gives us that certainty moving forward. So, actually, it is paramount. 

JOURNALIST: So in terms of your contribution to those projects you mentioned, what does that look like exactly? I mean, we’ve got people sewing things behind us, but it sounds like you do a diverse range of things? 

HERBON: Yes, we have three main technologies. What you can see behind us, that’s what we call a mobile camouflage system, so pretty much it’s a cover that we put on the top of defence assets, typically vehicles, to try to reduce their signature on thermos, infrared and satellite image that the asset provides to the sensors from the [indistinct]. So it’s to be unseen and increase the safety of our assets and servicemen. So that’s the product that we’re delivering for the main defence land-based platforms here in Australia. 

KHALIL: I was just going to add, too, that if – we were talking to Javier earlier, if the questions got too tough for Julie and Richard and I, we were going to ask Javier to bring in that mobile camouflage in front of the screen here  

HERBON: And make him invisible. 

KHALIL: And make sure that we’re protected. But the important point that Javier is making is yes, there’s job creation in Tasmania, but what’s really incredible that I found in visiting CBG – and I’m visiting Taylor Brothers, which is across the road, there’s other companies all here at Derwent Park and across Tasmania – is the advanced manufacturing, the kind of niche capabilities that you’re producing and manufacturing which are really cutting edge and going to fitting out the capabilities that we need for the Australian Defence Forces, as well as the export markets that you’re doing. And that commitment, that contribution, is quite critical in the phase that we’re in where we’re building up that sovereign capability. And Tassie is leading the way. 

JOURNALIST: Lastly, Javier, the defence landscape, the businesses that operate in it, it’s a very niche market, but it’s also a very competitive market when it comes to tendering and procuring those major projects that the Federal Government is working on. How are you finding that procurement process? Is it difficult for Tasmanian companies to get a look-in with some of these major contracts, or are you finding it’s actually a good process? 

HERBON: A lot of improvements have been made in the last few years to make it much more accessible and streamlined. It’s still a bill of a journey. We need to have certain security systems, but the defence contracts that typically we engage with the defence primes, but on a flow-down from the Commonwealth. They have been simplified and make it – they have been made more appealing and easy to deal for small medium-size enterprises. So I think that it’s still a journey. You need to be committed and willing to go through that journey, but it is totally possible. So I do encourage other manufacturing businesses to jump on board this industry segment. Originally, we weren’t a defence manufacturing company. We started as a business 49 years ago, only working on commercial projects, and we transitioned 15 years ago, and now we have a nice balance of both. And I think that is possible, it’s doable. It makes business more sustainable in time. 

KHALIL: Thanks, Javier. Any questions for Julie or I? 

JOURNALIST: Yes, if that’s all right. Could you just reiterate how you are – Australia broadly is strengthening its defence capabilities right now and why? 

KHALIL: Yeah, that’s a great question. Well, the why, I’ll start with the why. The reason we are strengthening our capabilities is because of the important role that the ADF plays in helping shape the future of the Indo-Pacific. The security and stability of our region is really critical to the prosperity that we as Australians enjoy, our way of life. We’re a maritime nation. We have to have certain capabilities that protect the sea lanes, that protect the maritime approaches, that add deterrent effects to the strategy of denial, really, which was articulated in our Defence Strategic Review that the government released. And that is the point that we have to add our collective deterrence, with our partners in the region in the Indo-Pacific, to send a clear message that the cost of conflict is too high; it is much better to come back to the diplomatic table to resolve disputes and differences. But in order to do that, you have to invest in defence. You have to invest in defence capabilities. You have to invest in capabilities that provide that deterrent effect and fit out our ADF men and women to be able to do their job. The surveillance that we do across the north of Australia, the work that our ADF men and women do in all of their various deployments and so on and the operational tempo that we have, that is critically important. And because, I think the other answer to your question about why, we are in a very volatile world. It’s strategically unstable. It’s uncertain. We’ve heard this before, that it’s probably the most unstable it’s been, probably since World War II. And I was just saying earlier today – and this might be counterintuitive – but Australians, I think, understand this, that when we invest in defence we’re also investing in peace. Now, it sounds strange, but the more you invest in defence, the more you invest in that deterrent capability, the more you deter the likelihood of conflict. We don’t want to get into a place where there is conflict because in the midst of World War II we were spending 34 per cent of our GDP on defence. We don’t want to do that. But – so that’s why the investment in defence is so important in getting those capabilities right, evolving our armed forces to do the work that they need to do to protect Australia and Australian interests. It is of critical importance as we navigate through this very difficult period. And Tasmania is a big part of this as well, the commitment that we’ve seen, the distribution we’re seeing from defence industry, the contribution we’re seeing from Tasmanians in the armed forces and the reserves, those capabilities are a very big part of that as well. 

JOURNALIST: And in what ways is the Middle East conflict impacting on our ability to bolster these defence capabilities? Are there supply chain issues impacting this? 

KHALIL: Well, I think the Middle East conflict, as everyone knows, has had a huge impact on the global economy and also on everyday Australian citizens. Australia has responded and the government has responded by trying to alleviate some of the pressure on Australians at the bowser on petrol prices by reducing the excise by 32 cents but also increasing supply through another 100 million barrels a day by changing some of our thresholds with refined product, securing supply with our international partners. The Prime Minister is in Singapore. The Defence Minister and Deputy Prime Minister is in Japan working with our partners to lock in some of that supply over the coming months. And that’s critically important. Supply is actually, you know, it’s at the highest it’s been for 15 years. There’s obviously been a real spike in demand, and we’ve tried to respond to that spike in demand to alleviate that cost of living pressure that Australians are feeling. But it is having a dramatic effect on the global economy and on Australia. We welcome the ceasefire. We hope that it holds because that will allow some of that shipping hopefully to come through the Strait of Hormuz. We have as a government been very clear in articulating our desire with the international community for a de-escalation of this conflict so that the impacts that we’re feeling across the global economy can be managed. But there’s a lot of hard work to do, and that’s why the Prime Minister and Defence Minister and our Energy Minister are all working, you know, every minute of the day to try and ensure that we have those supplies of fuel locked in and also alleviate the pressure on demand as well. 

JOURNALIST: And just on the review, to clarify, is that a review of the Defence land asset sales that was announced about a month or so ago, or is that a different review? 

KHALIL: Sorry, I was referring to the strategic review that was released a couple of years ago and that sort of annual updated National Defence Strategy, which was clear in its articulation of the importance of the type of capabilities we need to invest in for our Defence Forces and for us to be able to help shape the strategic circumstances that affect Australians every day. The estate review is very, very important. We announced about that a month and a half ago now. We have the largest landholding in Australia – 3.8 million hectares – hundreds of bases and facilities. But the fact is when I came in as assistant minister and looked at the audit that had been commissioned and the recommendations very, very closely and spent I think almost a year going through every single recommendation, we have dozens of sites across Australia in the estate which are under used or underutilised and we are spending hundreds of millions of dollars on sustainment and maintenance. That is a waste of taxpayer dollars and is unacceptable. And also there are a number of sites that are very beautiful – they’ve got sprawling golf courses and tennis courts and so on. But they’re not operationally fit for purpose. And the estate audit made recommendations to get our estate, our defence base up to standards and fit for purpose for the current force structure and the future force structure of our ADF. So we’ve made some tough decision and announced the divestment of 67 properties around the country, and that will bring back $2 billion in savings on sustainment and maintenance and another $3 billion from the proceeds of sale. And importantly, every single dollar, every single cent of that will be reinvested back in the men and women in uniform and our capabilities in defence. And that’s a really important thing for Tasmania and also right across the mainland. We’re investing in new facilities in Tasmania as part of that transition. As I said, a new multi-user depot for reservists and for personnel and cadets up in the north west of Tasmania, a new tri-service facility north of Launceston as well, which is going to be great for cadets. We’ve invested in Anglesea and continue to make those investments here in Tasmania. So we are doing what we need to do to make sure that our estate is fit for purpose on the back of that reform. 

JOURNALIST: Thank you, Assistant Minister. Julie, we might move on to yourself, other issues, if you guys were happy to move on. On the National Construction Code, Julie, the Tasmanian Government is wanting that to be deferred and paused saying now is not the time amid rising fuel costs and the other challenges that builders and developers are facing at the moment. Should the National Construction Code changes be deferred to giving a bit more certainty and relief for builders? 

COLLINS: The Federal Government announced some time ago that we’d pause the National Construction Code in light of some of the issues that we’re facing in terms of the housing challenges right across the country. But importantly, you’ve also seen from our government a very significant investment – over $43 billion going into housing right across the country. So we are stepping up to the plate. We’ll continue to work with states and territories in terms of getting more homes on the ground. Here in Tasmania since we’ve come to office now more than $800 million has gone into additional housing and homelessness services here in Tasmania. 

JOURNALIST: In regards to the Tyndall Ranges walk, why wasn’t the walk declared a controlled action? 

COLLINS: Well, Minister Watt would have taken careful consideration of this, or his delegates in the department would have gone through the usual processes to assess it according to the law. And the decision has been taken in relation to its assessment, and Minister Watt has agreed that it will not need to do that. 

JOURNALIST: There are some environmental concerns being voiced loudly. Is the walk appropriate – in an appropriate area? 

COLLINS: Well, that’s obviously for the proponents of the walk to determine. What our role is as the Federal Government is to assess it under the federal laws, and that assessment has been done. 

JOURNALIST: So there’s also been new research that’s proven new growth of eucalyptus to be highly flammable when compared to mature forest, meaning that decades of logging and some significant bushfires in Tasmania have made communities and industries more susceptible to severe fires. Scientists behind this say that there is an urgent need for work to protect people and resources from the hazard regrowth poses. What work is the Federal Government doing to minimise the risk before another bushfire occurs? 

COLLINS: Well obviously our government continues to work with states and territory governments, who are responsible for the land management and forestry operations on the ground. So it would be a matter for the Tasmanian Government about how it is managing its forestry estate here in Tasmania… 

JOURNALIST: Will it support [indistinct] more research into the hazard of regrowth? 

COLLINS: What I would say is that as a federal government our role is essentially in applying the EPBC Act and in terms of the regional forest agreements that we’ll be moving into the EPBC Act. And we’ll continue to work with the Tasmanian state government to get best outcomes for Tasmanians. 

JOURNALIST: Will it consider limiting native logging forests, with scientists saying that mature forests act as fire breaks in bushfires? 

COLLINS: Well, as I’ve said previously, that would be a matter entirely for the Tasmanian state government. What we’ve said as the Federal Government is that we don’t have enough timber here in Australia. What we want to see is more value-adding of our critical timber resource to make sure that we’re getting the best value for what is an important fibre for many Australians. We just talked about housing. We need timber to build homes for Australians. 

JOURNALIST: And finally, long-spined sea urchins researchers are asking why the government hasn’t funded the $55 million strategy to try to stop the spread of sea urchin, as recommended by the Senate committee. Researchers have found that the urchin is in areas on the west coast, and then they’re saying that funding industries, abalone, are under threat, like the abalone and lobster industries are under threat. What do you think about that? 

COLLINS: What I’d say is we continue to work with states and territories in terms of invasive pests and species, whether they be in the water or on the land. But the management of those in terms of land and Tasmanian waters is a matter for the Tasmanian Government. In terms of Commonwealth waters, we continue to work with our state and territories in relation to how we might deal with those invasive species. 

JOURNALIST: Will you reconsider the sea urchin strategy? 

COLLINS: As a federal government, we’re always considering priorities when it comes to dealing with invasive species and other important environmental outcomes. And we’ll continue to do that. 

JOURNALIST: Just going back to housing, Julie, there’s some new ABD data that shows a modest uptick in attached homes which have been rolled out across Tasmania, but the HIA and other industry groups are saying there’s still a long way to go if we want to meet the housing demand in Tasmania. Is the Federal Government doing enough to support the construction of more housing across the state? 

COLLINS: Well, as I said, we’re investing very heavily as a federal government – over $43 billion nationally and here in Tasmania today over $800 million into housing and homelessness services. I think the Federal Government is certainly doing our part. What we want to see is more homes for more Tasmanians, and we’ve been very clear about that. And we’ll continue to work with the Tasmanian state government on that. 

SPEAKER: Thanks, guys. 

KHALIL: Thank you very much.

ENDS