The Senate Foreign Affairs, Defence and Trade References Committee Impact of Defence training activities and facilities on rural and regional communities Final report May 2018 Commonwealth of Australia 2018 ISBN 978-1-76010-768-0 Foreign Affairs, Defence and Trade Committee Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 Australia Phone: + 61 2 6277 3535 Fax: + 61 2 6277 5818 Email: [email protected] Internet: http://www.aph.gov.au/senate_fadt This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License. The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/ Printed by the Senate Printing Unit, Parliament House, Canberra. ii Committee Membership Senator Alex Gallacher, Chair ALP, SA Senator Linda Reynolds CSC, Deputy Chair LP, WA Senator David Fawcett LP, SA Senator Kimberley Kitching ALP, VIC Senator Claire Moore ALP, QLD Senator Rex Patrick CA, SA Secretariat Ms Lyn Beverley, Committee Secretary Ms Margie Morrison, Acting Principal Research Officer Ms Anna Dunkley, Senior Research Officer Ms Margaret Cahill, Research Officer Ms Shannon Ross, Administrative Officer iii iv Table of contents Committee Membership ................................................................................... iii Recommendations .............................................................................................vii Chapter 1.............................................................................................................. 1 Referral ................................................................................................................... 1 Conduct of the inquiry ............................................................................................ 1 Acknowledgement .................................................................................................. 2 Interim reports ........................................................................................................ 2 Focus of the inquiry ................................................................................................ 2 Context of the final report ...................................................................................... 2 Structure of the report ............................................................................................. 3 Other jurisdictional issues raised with the committee ............................................ 3 Chapter 2.............................................................................................................. 5 Systemic issues .......................................................................................................... 5 Introduction ............................................................................................................ 5 Policy settings ......................................................................................................... 5 Tier 1 contractors .................................................................................................. 17 Commonwealth Procurement Rules ..................................................................... 22 Consultation mechanisms ..................................................................................... 26 Availability of regional information ..................................................................... 28 Chapter 3............................................................................................................ 33 Conclusion and Recommendations ....................................................................... 33 Policy settings ....................................................................................................... 33 The use of Tier 1 contractors ................................................................................ 36 Commonwealth Procurement Rules ..................................................................... 37 Consultation mechanisms ..................................................................................... 38 Availability of regional/local information ............................................................ 40 Appendix 1 ......................................................................................................... 43 Submissions ............................................................................................................. 43 Appendix 2 ......................................................................................................... 45 Tabled documents, additional information and answers to questions on notice .................................................................................................................................. 45 Tabled documents ................................................................................................. 45 Additional information ......................................................................................... 47 Answers to questions on notice ............................................................................ 48 Appendix 3 ......................................................................................................... 51 Public hearings and witnesses ............................................................................... 51 Thursday 8 June 2017 Port Augusta, South Australia.......................................... 51 Wednesday 12 July 2017 Rockhampton, Queensland ......................................... 52 Friday 14 July 2017 Townsville, Queensland ...................................................... 54 Tuesday 22 August 2017 Darwin, Northern Territory ......................................... 55 Wednesday 23 August 2017 Katherine, Northern Territory ................................ 56 Monday 20 November 2017 Bendigo, Victoria ................................................... 57 Tuesday 21 November 2017 Wodonga, Victoria ................................................. 58 Friday 21 March 2018 Canberra, Australian Capital Territory ............................ 59 vi Recommendations Recommendation 1 3.10 The committee recommends that Defence review its procurement and purchasing policies and procedures to ensure they are providing appropriate and up to date guidance to Defence staff that will assist them implement the Defence White Paper, associated industry policy documents and the Local Industry Capability Plan Pilot. Recommendation 2 3.16 The committee recommends that Defence conduct a detailed evaluation of the Local Industry Capability Plan Pilot which should be made publicly available. Recommendation 3 3.31 The committee recommends that Defence provide an update to the committee about its progress to develop the assessment model by 31 August 2018. Recommendation 4 3.38 The committee recommends that Defence develop general guidance for base commandants to achieve an appropriate level of engagement with the local community which includes ensuring contact points are available to stakeholders in the local community. Recommendation 5 3.48 The committee recommends that the Centre for Defence Industry Capability ensure its processes and communication mechanisms specifically consider how best to provide information to SMEs in rural and regional areas. Recommendation 6 3.49 The committee recommends that the Centre for Defence Industry Capability publicly report on its engagement with SMEs, particularly engagement with SMEs in rural and regional areas. Recommendation 7 3.56 The committee recommends that Defence collate the information provided in Local Industry Capability Plans relating to local engagement and local economic benefits to produce a regular public update about Defence activities in the regions. Recommendation 8 3.60 The committee recommends that Defence review the reporting requirements of Tier 1 contractors to ensure relevant regional/local information is provided and Defence consider how best to make this publicly available. Recommendation 9 3.64 The committee recommends that building on recommendations 7 and 8, Defence work towards providing detailed information about the number and types of good and services, the use of local suppliers and the proportion of total project spend flowing into the local economy. viii Chapter 1 Referral 1.1 On 8 February 2017 the Senate referred the following matter to the Senate Foreign Affairs, Defence and Trade References Committee (the committee) for inquiry and report by 30 November 2017: The impact of Defence training activities and facilities on rural and regional communities, with particular reference to: a. economic, social and environmental impacts; b. consultation and communication with local government and community organisations; c. investments in new facilities, infrastructure and operations; d. utilisation of local suppliers and service providers to achieve value for money; e. encouraging awareness of tendering opportunities for rural and regional businesses; and f. any other related matters.1 1.2 On 13 November 2017 the Senate agreed to extend the reporting date of the inquiry to 29 March 2018.2 On 20 March 2018 the Senate agreed to extend the reporting date to 10 May 2018.3 Conduct of the inquiry 1.3 Details of the inquiry were placed on the committee's website at: http://www.aph.gov.au/senate_fadt. The committee also contacted a number of relevant individuals and organisations to notify them of the inquiry and invite submissions by 28 April 2017. The committee