Defence Legislation Amendment (Woomera Prohibited Area) Bill 2013 Bills

I cannot agree more with my erstwhile colleague on the other side of the Senate chamber that the Defence Legislation Amendment (Woomera Prohibited Area) Bill 2013 is vitally important to South Australia from two aspects. I come to this debate with two hats, if you like, or two parts to my background—and one is a defence background. In fact, as the former commanding officer of the Aircraft Research and Development Unit, Woomera was a critical piece of infrastructure to the work that we did in testing air weapons and in supporting test and development science and technology—whether it be things like scramjet engines, space re-entry vehicles or military equipment from other nations.

It is a critical piece of infrastructure. It is critically important not only to Australia’s national defence and the interests of our allies but also to South Australia’s defence industry, which, as Senator Gallacher would know, is actually a key employer of South Australians. In fact, we in South Australia have more than 25 per cent of the defence spend on defence materiel. Having said that, I am also conscious—having seen the incredible and immediate impact of BHP’s decision not to proceed with their mine development in South Australia on confidence and how it flowed onto contracts, onto jobs and onto an economic downturn in economic activity in South Australia—of the urgency of making sure that we do in fact open up the assets that are there in Woomera for mining, for the benefit of the Australian economy and particularly for the South Australian economy, including not only the major miners but the SMEs who support them and, as Senator Gallacher pointed out, the employment opportunities that come for Indigenous people.

So there is absolutely no doubt from the perspective of the coalition and particularly of those of us from South Australia that we see this as something that we need to do and do quickly, but we also need to do it correctly. If there is one lesson that I have learnt through my career as an experimental test pilot it is that, no matter the urgency, you must get things right because unintended consequences will cause harm. We only have to look at the last period of Australia’s governance to see that there were a number of well-intended programs that were rolled out quickly, bypassing some of the normal due diligence processes, and that had horrific unintended consequences, causing economic or indeed, in some cases, personal harm. So it is important that we do get it right.

From the defence perspective, this 124,000 square kilometres of Australian territory is used not only for training but also for an air weapons test range. Land use issues have traditionally been something that Defence has managed well, albeit often on a very ad hoc or informal basis in terms of agreements with landholders on land use. But we do see examples where those arrangements have not worked out. Serious capabilities that Australia has decided to invest in, such as stand-off weapons, have been delayed because the final end-to-end testing with high-explosive warheads has been delayed because of land use and land access issues and the inability to find a suitably safe template for testing that weapon, given the existence of land users.

So, from the defence perspective, this exercise around clarifying existing and future uses and the rules under which all parties will cooperate is actually quite important to being able to maintain a predictable and effective capability development system for our air weapons. Contrary to some of the comments that perhaps the government has been captured by Defence and that we are looking to delay because of Defence’s interests, it is actually in Defence’s interests to make sure that the rules and arrangements around access are in place and agreed so that when we have an important program, whether it be ours, industry’s or one of our allies’, we have the confidence to know that that program can continue and can be implemented in accordance with an agreed set of rules.

From the perspective of the South Australian economy, it is estimated that there is some $35 billion worth of resource in the Gawler Craton region ready to be tapped, which will generate all of the activity that I spoke about before. The four mines that are currently there—Challenger, the goldmine; Prominent Hill, with copper and gold; Cairn Hill, which has a range of iron ore, magnetite, copper and gold; and Peculiar Knob, with iron ore—are examples of the fact that the mining industry and Defence can coexist on the Woomera Prohibited Area. As Geoscience have said in their submission to the inquiry, the potential is significant to expand that investment and those employment opportunities in the WPA. That will have a flow-on effect to the rest of South Australia, which is important. Again, as Senator Gallacher highlighted, if you start talking to some of our ratings agencies, South Australia, disappointingly in the view of some, is not only on par with Tasmania but is in fact rated worse than Tasmania from an economic perspective. That is a dreadful state of affairs for both of our states but particularly for South Australia given that we have so much potential that is sitting there ready to be developed and to develop our young people.

Unfortunately the politics gets in the way of this, and I want to address the politics briefly before moving to more of the substance of the bill. There have been a lot of comments this morning and a number of accusations that this government is unnecessarily delaying the bill. I would like to put a little bit of the history of this legislation onto the Hansard record to address some of those concerns. As the minister stated, the Hawke review was conducted. It started in 2010 and reported in 2011. It was clear from the recommendations of the Hawke review, in terms of how the author intended that to be dealt with by the government—the classification of legislation in terms of urgency—that his clear expectation was that the government would have dealt with that in the calendar year 2011. It was a long two years before we finally saw the legislation, and the draft exposure bill was only available for a week for stakeholders to look at. Given what I have just canvassed previously about the importance to national security and to the South Australian economy, to give stakeholders a week—in effect, five days—to read, understand, consider and make comment on such an important piece of legislation is negligent.

The opposition has made the comment numerous times this morning that the government just flicked it off as though it was purely our role. Can I remind them that the Selection of Bills Committee, the committee that considers and approves whether legislation that has come through the lower house goes to a committee, was actually chaired by a South Australian Labor senator. That committee signed off and approved it, and it came to this chamber for approval. This chamber, which at that time had a majority of ALP and Greens members, who controlled the vote, approved that report of the Selection of Bills Committee and referred it to the Foreign Affairs, Defence and Trade Legislation Committee. That committee, at the time chaired by you, Madam Deputy President Stephens, looked at it and said, ‘Yes, it is reasonable that we proceed.’ But we understood and agreed that there was an urgency around that, so we agreed that we would set a time for a hearing so that we could have that hearing even if the election was called and then progress this legislation.

When the election was called the coalition members on the committee said we would like to continue with the hearing, which was only a matter of days away from the meeting. We said we would like to have that meeting in Adelaide, we would like to continue the hearing so that we could report. But unfortunately the then government members said no, the election was a priority. So that was canned.

Unfortunately Senator Farrell has been accusing the defence minister of going back on his word. I refer to the media release that the Minister for Defence sent out. What he said was:

The Coalition has agreed to complete the Senate Inquiry prior to the September 14 election and is committed to progressing the legislation so that broader access to the WPA lands will commence before Christmas 2013 .

Clearly if the members of the committee voted to not go ahead with the hearing, which was the precursor to getting it done by Christmas, then it is somewhat emotional and irrational and, you must therefore suspect, purely political for Senator Farrell to say that it is the coalition who are delaying this. That hearing did not go ahead not because of our wishes but because other members decided that the election was the priority. That being the case it then became impossible to actually continue the development of that legislation prior to Christmas.

Senator Farrell talked about the urgency and why it is important to get things right. On ABC 639 in South Australia, the Minister for Mineral Resources and Energy in the South Australia government, Minister Koutsantonis, came out very critically about the fact that this had been referred to a committee. He clearly did not understand the processes within the Senate whereby bills that come from the lower house go through the process that I have just described. It is an example of where accusations can be made and false assumptions can be made when people have not done the homework to understand why due processes are in place. It is important from both a national defence perspective and an economic perspective that we get this bill right.

One of the themes that is worth talking about is just understanding the framework that has been put forward in terms of the principles of coexistence, understanding why there are some issues that need to be resolved. The principle of coexistence that the Hawke review drew on was that there is significant scope to increase the national value of the Woomera Prohibited Area, to have a coexistence of economic interests with national security. It recognised that Defence should remain the primary user of the WPA and that, under regulation 34 of the Defence Force Regulations 1952, it has the authority to control access.

But the idea was to put in place a framework whereby Defence agreed with other parties how that access would be made. One of the ways they came up with to mitigate the risk and maximise access was the concept of exclusion periods and exclusion zones. They looked at the concept of three zones: the red zone, where there is frequent Defence use and where no new users that are not Defence users would be admitted; the amber zone, where there is periodic Defence use and where there will therefore be some restrictions around the amount of infrastructure that people can build and the amount of access they can have to it, because at times that area will be subject to potentially damaging war materials being tested; and the green zone, where there is infrequent Defence use, but which Defence still needs to maintain within the WPA for the purposes of the probabilistic determination of safety templates. Clearly the smaller the area, the higher the probability of impact, while in a larger area you could have areas with a very low probability of impact and still allow people to use them.

An example of the sorts of problems you have when you start going through the Hawke review, the information paper and then the draft legislation is recommendation 24 of the Hawke review. It says:

The Defence Minister should have discretion to suspend all non-Defence access to the WPA when there is an urgent national Defence requirement.

That flows through to the information paper which, at paragraph 49, says:

In addition to suspension due to the accumulation of demerit points— that is if other parties have done the wrong thing—

it is proposed that the Minister for Defence would have the discretion to suspend all non-Defence access to the WPA for the defence of Australia.

A few definitional issues arise here. How do you define ‘the defence of Australia’? Is it purely somebody coming over our northern borders? Is it when our forces are deployed somewhere? Is it a decision of the National Security Committee of cabinet? There are a range of definitional things there that create uncertainty for both parties. How long can they suspend it for? Is that something there are limits on? Particularly if we are not talking about hordes coming over our northern borders and it is some sort of offshore activity, how long is it reasonable for Defence to have that exclusive use? If Defence decides that it needs exclusive use then, given the investment that mining companies may have made in infrastructure and employing staff, what compensation will there be? One of the main concerns that miners have raised with me in talking about this is: ‘If Defence chooses to enact this, what compensation is there for us?’ That becomes almost an unlimited liability, in turn affecting their ability to attract capital to make their investment.

So there are some definitional things here, particularly when you look at the exposure draft and you look at the limits on the amounts of compensation. In part 8, paragraph 61(1) it says:

For the purposes of section 72TL of the Act, the amount payable by the Commonwealth in respect of a claim by a person against the Commonwealth for loss or damage suffered in the Woomera Prohibited Area is limited to $2 million.

There is no indication there whether that is purely loss due to physical harm, as in munitions exploding and damage being done, or whether that is loss due to exclusion from the range.

So there are some critical issues that need to be explored. It is notable that the South Australian government raised concerns in October that have been addressed, as have the Northern Territory and other bodies. Well after the period that the previous government was hoping to have this legislation passed, concerns were still being raised, and that is why it is important not only that we do have an inquiry but that that inquiry informs the bill. Certainly the expectation that members of the committee had last year was that this debate would not occur until after we had held the inquiry, submissions had come in and the committee had considered those submissions and reported.

The coalition is committed to moving this forward. The coalition is committed to getting an outcome that works for the South Australian economy and that works for the national defence of Australia. But to rush it through without due diligence is not actually helping either of those parties that we wish to help. The mere fact that both parties are exposed to costs around this issue of delays and compensation— and that has not been clearly resolved—is something that needs further discussion and needs a head of power in the legislation. The very nature of testing is that things will go wrong, which will delay programs. Weather events can delay test activities. So the only option Defence has is either to book unrealistically large blocks of time, which then disadvantages the mining sector, or, when they have people and equipment that have come from all around the world and there is a large cost involved and perhaps weather delays mean that they need to just extend by one more day to complete the test, where is the mechanism, where is the head of power to allow a mechanism, whereby both parties can efficiently and effectively manage this arrangement in the best interests of the nation and of South Australia?

The coalition is committed to this. We made that point last year when we were in opposition. We made that point through the committee process. We have made that point this year in the Senate by explaining, through the Manager of Government Business, that the government was bringing forward legislation to table. I am disappointed that we are here debating this today when, in a matter of weeks, we will have government legislation, informed by an inquiry, that can bring a more holistic, fully researched and understood solution that will benefit the people of South Australia and assure our national interests. The coalition remains committed to achieving the intent of the Hawke review, which is more economic and appropriate utilisation of the national resource represented by the WPA.