Reference
1.1
On 6 October 2020 the Senate referred the following documents to the Senate Foreign Affairs, Defence and Trade Legislation Committee (the Committee) for examination and report:
Particulars of proposed expenditure in respect of the year ending on 30 June 2021; and
Particulars of certain proposed expenditure in respect of the year ending on 30 June 2021.
1.2
A reporting date of Tuesday, 17 November 2020 was set for the committee to report on its consideration of the 2020-21 Budget Estimates.
Portfolio coverage
1.3
The Committee has responsibility for examining the expenditure and outcomes of the following:
Defence Portfolio (including Veterans' Affairs); and
Foreign Affairs and Trade Portfolio.
Portfolio Budget Statements 2020-21
1.4
The Portfolio Budget Statements for 2020-21 for the Defence Portfolio, Department of Veterans' Affairs and the Foreign Affairs and Trade Portfolio were tabled in the Senate on 6 October 2020.
Hearings
1.5
The Committee conducted public hearings from 26 to 29 October 2020.
1.6
On 26 and 27 October, the Committee examined the Defence Portfolio (including Veterans' Affairs) and received evidence from Senator the Hon Linda Reynolds CSC, Minister for Defence, and also representing the Minister for Veterans' Affairs; Senator the Hon Richard Colbeck, Minister for Aged Care and Senior Australians, representing the Minister for Veterans' Affairs and Minister for Defence Personnel; and from officers of the Department of Defence, Department of Veterans' Affairs, and relevant portfolio bodies.
1.7
On 28 and 29 October, the Committee examined the Foreign Affairs and Trade Portfolio and received evidence from Senator the Hon Marise Payne, Minister for Foreign Affairs, and Senator the Hon Simon Birmingham, Minister for Trade, Tourism and Investment; and from officers of the Department of Foreign Affairs and Trade and relevant portfolio agencies.
1.8
The Committee expresses its appreciation for the assistance of the Ministers and officials who appeared.
1.9
Over the course of the hearings the Committee took evidence from the following bodies:
Defence Portfolio (including Veterans' Affairs)
Naval Shipbuilding Advisory Board
Defence Housing Australia
Department of Veterans' Affairs
Australian Signals Directorate
Foreign Affairs and Trade Portfolio
Department of Foreign Affairs and Trade
Australian Trade and Investment Commission
1.10
The Committee released Export Finance Australia without being examined.
Questions on notice and Hansard transcripts
1.11
In accordance with Standing Order 26(9)(a), the Committee set 11 December 2020 as the due date for the return of answers to questions on notice.
1.12
The transcripts of these public hearings and answers and additional information are available on the Committee's website at:
1.14
In this report references to Hansard page numbers are to the proof transcripts. Page numbers may vary between the proof and official Hansard transcript.
Defence Portfolio, 26 October 2020
Naval Shipbuilding Advisory Board
1.15
Topics examined during the hearing included:
Future Frigate Program – advice to government regarding the schedule to meet milestones; risks to the schedule associated with the impact of COVID-19; engagement with the Capability, Acquisition and Sustainment Group and BAE; design progression; weight management to ensure adequate margin; and local content (pp. 3-7)
Meetings in Australia attended by current board (p. 17)
Future Submarine Program, including the failure to meet scheduled milestones, costs and examination of alternative options for supplier (pp. 17-18, 25-26)
Sustainment as a factor in the design (p. 18)
Collins Class submarines Life of Type Extension (LOTE) program and decision on location of full cycle docking (pp. 18, 20-24)
Advice to Ministers (p. 18)
Australian industry content and transitioning to Australian-based supply chain (pp. 19-20)
Shipyard design review (p. 20)
Department of Defence
1.16
Topics examined during the hearing included:
Future Submarine Program, including (pp. 27-38, 39-40, 56-61, 73-74, 83-85)
Schedule, timeline and milestones
Defence Strategic Update and Force Structure Plan, particularly in relation to the requirement for a regionally superior submarine capability and the continuity of capability through the Collins Class LOTE
Consideration of off-the-shelf option
Basis and sequence of costs, including use of constant and out-turned figure
Sustainment costs in the budget
Battery technology and battery tender process
Australian industry content, including amendment of the contract for the Strategic Partnering Agreement to reflect a minimum local content of at least 60 per cent spend of the contract in Australia
Manufacturing and workforce
Increase in sustainment costs in the budget
Contract cancellation cost
Consideration of nuclear power
Expansion of acquisition of self-propelled Howitzer artillery system project (p. 38)
Update on Hawkei vehicles project (pp. 38-39)
Delay on decision on location of full cycle docking for the Collins Class submarines (pp. 40-41, 61-62)
Decision to remove weather reports by Bureau of Meteorology forecasters from RAAF Gippsland and Sale on local radio (pp. 41-42)
Status of the detention of former Afghan soldier Hekmatullah (pp. 42-43)
Future Frigate Program, including (pp. 43-56)
acquisition cost increase and decision to publish figure in the 2020 Force Structure Plan
Batch 1, including cost per ship and Australian industry content
Minimum Australian industry content in contract
Release of the Australian industry content plan
Defence capital program, including shortfall in capital spending over last four years (pp. 63-66, 70-73)
Capability Life Cycle Manual, sovereign defence industry implementation plans, and latest policy guidance for defence test and evaluation plans (pp. 67-69)
Defence budget, including increase in total sustainment costs; availability rates for critical capabilities; and reclassification of $3 billion defence expenditure across operating, sustainment, capital categories (pp. 75-77, 78-80, 81-82)
Independent Australian Industry Capability Plan Audit program (pp. 86-90)
Defence Housing Australia (DHA)
1.17
Topics examined during the hearing included:
Update on the Mount Lofty redevelopment project (pp. 91-93)
New business model (p. 93)
DHA projects across the country (pp. 93-94)
Implementation of recommendations from the Australian National Audit Office Report No. 31 2019-20 Management of Defence Housing Australia (pp. 95-94)
Australian War Memorial
1.18
Topics examined during the hearing included:
Financial contributions from military and defence firms (pp. 95-96)
Redevelopment project (pp. 96-99)
Public letter to the Prime Minister on 22 October 2020 with 70 signatories raising concerns with the project
Therapeutic benefit for veterans and their families
Public consultation process, including the Australian Heritage Council response to call for public consultation
Allocation of new exhibitions to new gallery space
Special Air Service Regiment exhibition (p. 98)
New Director’s vision for Memorial (p. 98)
Collections process for the donation of items from veterans (pp. 99-100)
Department of Veterans' Affairs (DVA)
1.19
Topics examined during the hearing included:
Fees for allied health providers, including occupational therapists and physiotherapists (pp. 104, 129-130)
Hearing Services Program (HSP), including concerns from TPI Federation regarding the hearing devices available, number of requests for devices outside the HSP which are declined, education of audiologists regarding the HSP, and review (pp. 104-105)
Access to support for a group of Initial Employment Training (IETs) soldiers who were injured when an unexploded ordnance exploded on 7 February 1989 at Singleton (pp. 105-106)
TPI pension level, including reviews by David Tune and KPMG, budget measure for TPI veterans' rent assistance, and consultation (pp. 106-110)
Prime Ministerial Advisory Council on Veterans’ Mental Health meeting on 23 July 2019 and consideration of a Royal Commission into Veterans' Suicide (pp. 110-113)
National Commissioner for Defence and Veteran Suicide Prevention, including terms of reference to enable access for veterans and families, Defence’s and DVA’s role in the development of policy options, and appointment of Dr Bernadette Boss CSC as the interim Commissioner (pp. 113-114, 130-133)
Claims processing times (pp. 115-119)
Implementation of recommendations from the Australian National Audit Office report No. 52 of 2017-18 Efficiency of Veterans Service Delivery by the Department of Veterans' Affairs (p. 117-119)
Update on the implementation of the recommendations of the inquiry into facts surrounding the management of Jesse Bird’s case (p. 119)
Staffing, including average staffing level, Australian Public Service staff and contractors levels and training, turnover, and engagement of Chief Data Officer (pp. 119-122, 126-128)
Conclusion of the grant funding for the Centenary of Anzac Centre under Phoenix Australia (p. 123)
Centre for Traumatic Stress Studies, including the Transition and Wellbeing Research Program, and closure of centre (pp. 124-125)
Employees working from home during COVID-19 (pp. 126)
Delay in the release of the Veteran Mental Health and Wellbeing Strategy and National Action Plan (pp. 129)
Defence Portfolio, 27 October 2020
Department of Defence
1.20
Topics examined during the hearing included:
MHR-90 helicopter gun mount, including procurement processes and costs for three designs to address flaws in functionality (pp. 3-9)
Navy Force Structure Plan, including MH-60 Romeo, tender to replace Tiger aircraft, expanding maritime support helicopter, and LAND 2097 Phase 4 project to acquire light utility helicopter (pp. 9-13)
Defence Strategic Update and 2020 Force Structure Plan, including update on Indo-Pacific region, South China Sea, procurement investment in capability, and cybersecurity (pp. 13-15)
USS Ronald Reagan operation in South China Sea, Joint Operation Command and Indo-Pacific Command (p. 16)
Future of the Port of Darwin lease to the Landbridge Group (p. 17)
Navy helicopter procurement JP2097 (p. 18)
Update on the Defence Estate Works Program funding announced in May 2020 (pp.18-20)
HMAS Perth, including dry docking under the Anzac Midlife Capability Assurance Program, crew shortages and workforce growth (pp. 20-22)
Air Warfare Destroyer, including Hobart class upgrade and costings (pp. 22-26)
Acquisition of sea boats for the Offshore Patrol Vessels from Boomeranger (pp. 26-31, 33-34, 118-119)
Afghan inquiry task force investigations, including document freeze in relation to records regarding ADF operations in Afghanistan, time delay and possible destruction of records (pp. 31-33)
Future Submarine Program, including (pp. 34-35, 46-47, 83-87, 100-102, 108-113):
System requirement review
Investigation into allegations of misappropriation of funds by an officer in France and subsequent action through the Fair Work Commission
Defence analysis of the 60 per cent target figure for minimum spend of the contract value in Australia
Consideration of an increase in rate of delivery
Estimated acquisition cost
Systems functional review schedule
Build process by batching
Ability to update the combat system software
Transition arrangements from Collins Class to Attack Class
F-35 Joint Strike Fighter Program, including budget, replacement of the Autonomous Logistics Information System with the Operational Data Integrated Network, status of the joint program office, technical refresh 3, and estimate for through-life sustainment (pp. 35, 60-63)
Future Frigates Program, including budget, achievement of planned expenditure and milestones (pp. 36, 45-46)
Employment status of Mr James Gaynor CSC, the Inspector-General of the Australian Defence Force (IGADF) (pp. 36, 38-39)
Appointment of Dr Bernadette Boss CSC as the interim National Commissioner for Defence and Veteran Suicide Prevention, and Defence involvement in policy options for development of the office (pp. 37, 39-41)
Performance reporting in the Office of the IGADF (pp. 37)
Report into the death of Captain Paul John McKay and Defence response (pp. 37)
Employment restrictions for individuals on a J40 classification within the medical employment classification policy framework (p. 38)
Investigation into a matter in 2011-12 at the Royal Military College regarding a doctor (p. 39)
Review of the C-27J Spartan aircraft for final operating capability (pp. 42-43)
Replacement of the Growler aircraft following its destruction by fire in the US in 2018 (p. 44)
Hawkei military vehicle production schedule (p. 44)
LAND 400 Phase 2 Boxer Combat Reconnaissance Vehicles and Australian industry content in contract (p.45)
Sovereign munitions manufacturing capability (pp. 47-49)
Military uniforms produced in Australia (p. 49)
Naval Exercise Malabar and military relations with India (pp. 49-50)
Operation Bushfire Assist and Operation COVID-19 Taskforce (pp. 50-52)
Medcon and the production of face masks (p. 52)
Defence assistance in regard to hotel quarantine compliance (p. 52)
Point Wilson Wharf remediation (pp. 52-53)
RAAF-US Navy Triton aircraft cooperative program, including impact of funding suspension by the US Navy until 2023 (pp. 52-59)
Defence budget, including Force Structure Plan measures and growth in funding profile, reprioritisation, transparency, JobMaker plan and contribution to COVID-19 recovery (pp. 64-67)
Reprioritisation of funding for the budget measure Pacific Step-Up – delivering security infrastructure in the Southwest Pacific (pp. 67-68)
Jindalee Operational Radar Network upgrade project (pp. 68-71)
Capability Acquisition and Sustainment Group reorganisation (pp. 71-73)
Export permit applications under the Defence Trade Controls Act 2012, particularly in relation to arms sales to Saudi Arabia (pp. 73-74, 75-76)
Address to the Institute of Public Administration by the Chief of the Australian Defence Force and Secretary of the Department of Foreign Affairs and Trade – Diplomacy on the Front Line (pp. 74-75)
Review to consider the possible use of Defence bases to increase the quarantine capacity for Australians returning from overseas (pp. 79-80)
Increase in Defence recruitment applications (pp. 81-82)
Continuous shipbuilding program (pp. 102-103)
Collins Class submarines LOTE program, including design schedule, core work scope, funding from within the Future Submarine Program provision, assurance processes and risk mitigation strategy (pp. 103-108)
Staffing, including costs, and level of public servants and contractors (pp. 113-117)
Replacement of the Tiger armed reconnaissance helicopters fleet, including procurement process, and consideration of upgrade and LOTE (pp. 117-118)
Australian Signals Directorate (ASD)
1.21
Topics examined during the hearing included:
Termination of the contract with the Australian National University for drafting the agency's official history (pp. 88-89)
Ministerial authorisations to conduct intelligence on Australians (p. 89)
$1.35 billion funding for cybersecurity capability and priority areas (p. 90)
ASD activities in response to particular threats or vulnerabilities as a result of COVID-19 (pp. 90-91)
Watering hole attacks (pp. 91-92)
Members of Parliament websites, including a website set up by the Member for Dawson (pp. 92-93)
Support provided to Members of Parliament regarding cybersecurity and awareness (pp. 92-94)
Ransomware attacks, particularly in regard to intelligence on threats to Australian healthcare providers (pp. 94-95)
Measures under the Cyber Enhanced Situational Awareness and Response (CESAR) package to assist Commonwealth entities with cyber resilience (pp. 95-97)
Foreign interference through social media, including advice to Members of Parliament and Government about the use of WeChat and Tik Tok (pp. 97-101)
Australian National Audit Office budget cut (p. 97)
Foreign Affairs and Trade Portfolio, 28 October 2020
Department of Foreign Affairs and Trade
1.22
Topics examined during the hearing included:
Incident on a QATAR Airways plane in Qatar where women were required to undergo an invasive physical examination, including notification of incident, representations to Qatar and engagement with Qatari authorities, support provided to the women (pp. 5-16, 53-54, 72)
Bilateral relationship with India and the Australia-India Comprehensive Strategic Partnership (p. 17-18)
Assistance to Indonesia to respond to the impacts of COVID-19 (pp. 18-19)
Audit of Australia’s involvement in multilateral organisations (pp. 19-20)
Coordination regarding aggregating demand for personal protective equipment (pp. 20-21)
Repatriation of Australians stranded overseas as a result of COVID-19, including (pp. 21-23, 31-41, 54-72)
Prioritisation and allocation of people on flights
Data breaches and new protocol
Advice provided by consular officers
Numbers repatriated by Christmas
Caps on international arrivals
Additional facilitated flights and funding
Statements by the Prime Minister and Minister for Trade, Tourism and Investment
Mr Julian Assange, including communications with US, consular assistance, attendance of Australian High Commission staff at the extradition hearing, superseding indictment announced 24 June 2020, health and welfare of Mr Assange, offer of a pardon deal by President Trump, and reports of spying on Mr Assange and his legal team (pp. 23-26)
GOV.UK press release 'PM call with Prime Minister of Australia: 27 October 2020', and the process for preparing and releasing the readouts (pp. 27-30)
Representations to Myanmar regarding human rights conditions for Rohingya population (pp. 41-42)
Armenia-Azerbaijan conflict (pp. 42-43)
China, including (p. 43-53, 86-99, 90-91, 98-102)
China Tribunal report regarding forced organ harvesting
National People’s Congress resolution regarding reunification of China
Cooperation with China in regard to the inspection regime of stations in Antarctica, which includes two Chinese stations
Suspension of Australia’s extradition treaty with Hong Kong
Updated travel advice for China
Detention of Australian citizens Ms Cheng Lei and Dr Yang Henjun
Human rights concerns regarding Uighurs in Xinjiang and Tibetans
Corporate and individual social credit systems and protection of Australians
Operation of WeChat and TikTok in Australia
Establishment of the National Foundation for Australia-China Relations
Current state of Australia-China relations
Update on Hong Kong after the imposition of national security laws (pp. 98-99)
Representations regarding human rights concerns and consideration of an autonomic sanctions regime
DFAT Budget, staffing profile and cuts to positions at overseas posts (pp. 72-74, 77)
Taiwan, including current security situation and Australia's relationship (pp. 74-77)
COVID-19 inquiry, including Australia’s call for an independent inquiry and the subsequent World Health Organisation inquiry (pp. 78-86)
Questioning of witnesses from Chinese diaspora community members before the Senate Foreign Affairs, Defence and Trade Committee References Committee (pp. 91-95)
Statements on Government Members of Parliaments' websites regarding China (pp. 95-96)
Update on the detention of Dr Kylie Moore-Gilbert in Iran (p. 102)
Address to the Institute of Public Administration by the Chief of the Australian Defence Force and Secretary of DFAT – Diplomacy on the Front Line (p.102)
Funding of the aid program (p. 103)
Discontinuation of the soft power review (pp. 103-106)
Australia’s Foreign Relations (State and Territory Arrangements) Bill 2020, including drafting, consultation processes and content (pp. 106-119)
Government representations with Israel about annexations of territory in the West Bank and settlement building (pp. 119-121)
Syria, including transfer of Australian women and children from al Hawl to al Roj refugee camp, and possible repatriation (pp. 121-124)
Israel, including signing of the Abraham Accords and the Sudan-Israel Agreement, Australia's membership of the International Holocaust Remembrance Alliance and adoption of its definition of anti-Semitism, and relations with Lebanon (pp. 125-127)
Reduction in official development assistance funding for the Palestinian Territories and Australia's updated aid investment plan (pp. 127-128)
Status of the detention of former Afghan soldier Hekmatullah in Qatar (p. 129)
Report on alleged misconduct of former Director-General of the United Nations Relief and Works Agency (UNRWA) (p. 129 )
Decision to discontinue funding to the Palestinian Authority (pp. 129-130)
Impact of COVID-19 on working and posting arrangements, and measures undertaken to protect staff (pp. 130-133)
Funding for the Australian Consortium for 'In Country' Indonesian Studies (pp. 134-135)
United Nations Human Rights Council membership (pp. 135-136)
Foreign Affairs and Trade Portfolio, 29 October 2020
Department of Foreign Affairs and Trade
1.23
Topics examined during the hearing included:
Non-trade programs
DFAT engagement with former member of the New South Wales Parliament, Mr Daryl Maguire in relation to travel to Melanesia and Shenzhen (pp. 3-6, 30-32)
Process for announcements of diplomatic appointments, particularly in relation to the position of New York Consul-General (pp. 6-11)
Appointment of Mr Alex Tureman as a ‘thought partner’ to then Ambassador Mr Joe Hockey (pp. 11-12)
Mr Tony Abbott’s travel to UK and appointment to UK Board of Trade (pp. 12-16)
Australian agencies assistance in the investigation into the alleged transfer of funds from the Vatican to Australia in connection with the Cardinal Pell court case (pp. 16-20)
Paris Agreement, including Australia's commitment and those announced by other countries, and the carbon tariff policy of a Biden Administration (pp. 20-21, 24-29)
Donation to the International Peace Institute (pp. 21-22)
Australia-New Zealand travel bubble (p. 22)
Hardship program announced on 2 September 2020 providing financial assistance to Australians overseas (p. 23)
Suspension of Australia’s extradition treaty with Hong Kong (pp. 23-24)
Hong Kong Free Trade Agreement (p. 24)
Security contracts for the Australian embassies in Kabul and Jakarta (pp. 32-38)
Portrayal of Australia in China by the Chinese Government (pp. 38-39)
Official development assistance, including (pp. 40-42, 50-64, 71)
Performance framework for the effectiveness of investment in gender equality
Publication of sectoral information and investment priorities
Performance information and framework
COVID-19 response package
Funding for the Pacific Islands and Timor-Leste to address fiscal crisis
Budget information available and level of transparency
Abolition of the Office of Development Effectiveness
Australia’s commitment to UN Joint Response Plan for the Rohingya Humanitarian Crisis (p. 42)
Human rights in West Papua, including representations to Indonesia (p. 44)
Representations to Algeria and Mauritania in relation to persecution of Christians (p. 45)
Memorandum of Understanding between the Government of Victoria and the National Development Reform Commission of the People's Republic of China (pp. 46-47)
World Coalition for the abolition of the death penalty (p. 47)
Papua New Guinea, including representations regarding opposition to the death penalty, assistance for policing capacity, COVID testing rate and AUSMAT (Australian Medical Assistance Teams) deployment (pp. 47-48, 64, 70)
Iran, including breaches under the Joint Comprehensive Plan of Action, human rights violations, and current stability of the regime (pp. 48-50)
Human rights issues in the Philippines (pp. 65-66)
Human rights issues in Cambodia (pp. 66-67, 90-91)
COVAX Facility funding (pp. 67-68)
Human rights issues in India and the Comprehensive Strategic Partnership between Australia and India (pp. 68-69)
Abolition of Innovation Exchange (pp. 76-77)
Pacific Women Program evaluation (pp. 77-78)
Pacific Labour Mobility, including reviews of the Pacific Labour Facility and accommodation arrangements (pp. 79-81)
Lowy Institute's Pacific Aid Map (pp. 81-82)
Next Secretary–General of the Pacific Islands Forum (p. 82)
Australian Infrastructure Financing Facility for the Pacific (pp. 82-83)
Coral Sea cable project, including internet prices in Papua New Guinea (pp. 83, 85-87)
Pacific Fusion Centre update (p. 84)
Maldives economy (pp. 84-85)
Bali Process on People Smuggling and regional collaboration undertaken by Australia (pp. 88-90)
South Sudan flood and humanitarian crisis (p. 92)
Public-Private hospital program in Fiji (p. 92)
Support and welfare of workers in the Pacific Labour Scheme (pp. 93-95)
Azerbaijan-Armenia conflict, including the bombing of a maternity hospital in Stepanakert (pp. 95-96)
Australia's decision not to sign the Treaty on the Prohibition of Nuclear Weapons (p. 96)
Performance measures for media management (p. 97)
Trade Programs
Regional Comprehensive Economic Partnership negotiations (pp. 100-102)
Cotton and coal exports to China (pp. 102-103)
Protection of geographical indications in Australia-EU Free Trade Agreement (pp. 103-104)
Non-tariff trade barriers in relation to grain (p. 104)
Assistance to exporters for trade diversification (pp. 105-106, 116-117)
Announcement by China, Korea and Japan about zero emissions by 2050, including impact on economy and resources sector (pp. 106-108)
Work done in relation to the impact of a Biden administration (p. 109)
Implementation of recommendations from the Varghese report 'An India Economic Strategy to 2035' (pp. 109-111)
UK Government's Internal Market Bill (pp. 112-113)
Impact of COVID-19 on international student sector (pp. 114-116)
Work done to increase trade opportunities with Vietnam (p. 117)
Australian Trade and Investment Commission
1.24
Topics examined during the hearing included:
Nation brand work, including new logo and export branding, National Brand Advisory Council board member selection process (pp. 118-119)
Changes to the Export Market Development Grant scheme, including consultations (pp. 119-120)
Government measures to address the downturn in the tourism industry as a result of COVID-19 (pp. 120-124)
COVID-19 Relief and Recovery Fund, including zoos and aquariums sector grant funding (pp. 124-129)
Bushfire recovery grants program expenditure (pp. 129-130)
Appointment process for new Chief Executive Officer (pp. 131-132)
Tourism Australia
1.25
Topics examined during the hearing included:
Initiatives to assist travel agency sector (pp. 132-134)
Split of expenditure between domestic and international sectors (p. 134)
Opportunities for promotion of Northern Australia (p. 135)
COVID impact on the Tourism Bushfire Recovery International Media Hosting Program (p. 135)
Senator the Hon Eric Abetz
Chair