Ms LAWRIE - 2004-08-25
The federal government’s handling of the Defence supply contract has left Territory small- and medium-sized businesses in a state of uncertainty and, quite possibly, put their existence in jeopardy. Could you advise the House if there is a commonsense way to relieve the current uncertainty and enable an orderly process to be put in place?
ANSWER
Madam Speaker, I thank my colleague, the member for Karama, for her question. Everybody in this House must agree - particularly members who have been lobbied by Territory business on this - that the federal government’s handling of the DIDS Defence supply contract has been nothing short of an absolute shambles.
We can see the concern in the industry by the newspaper headlines this morning, ‘Defence firms and jobs to fly south’. The story of Mike Martins and his Performance 2000 business shows the type of anxiety there is out there in that sector of the industry. It certainly shows, from the Commonwealth’s point of view, a total lack of understanding of the Defence support industry here in the Northern Territory.
We know that the Commonwealth contract has been let to TenixToll. However, just months before the prime contract is about to kick in and take place, the future of the vast majority of those hundreds of Territory businesses who actually perform work for Defence is in jeopardy. They have not had advice from the Commonwealth about exactly how this contract is going to roll out, and what their opportunities are to participate in partnership with the prime contractor. There is serious uncertainty, and no wonder.
When you actually look back at this whole debacle of the Commonwealth letting this contract, the reality is that the contract was let based on the work that was occurring here in the industry back in 1999. We all know, in 2004, with the increased ADF presence in the Northern Territory since 1999, there is significantly greater ADF presence in the Northern Territory, particularly in the Top End. Those benchmarks that were contracted in 1999 do not represent the work that is up here in 2004.
There are also very real concerns that, since that time, we have seen wage rates in the Northern Territory escalate quite significantly. They are further being compounded by the major projects in the Northern Territory such as the LNG construction project. Therefore, the whole thing has been a shambles from the Commonwealth from day one.
The answers to these questions are still unclear, and the signs are not good. I met this morning with senior executives from TenixToll to advise them of the concerns of local industry in the Territory. It was a very good, productive meeting. TenixToll are also aware of the concerns of local business in the Territory. There is a workshop on tomorrow where TenixToll are actually going to brief Territory business.
However, I still believe that there is a significant amount of uncertainty. We are talking about small business operators here, people who have loans and finance conditions with banks and finance companies, and jobs in the Northern Territory. I made the call last week that there should be a moratorium of the contract in the Top End for at least two years to try to sort these issues out. I have written to the federal Defence Minister and called upon him to stop monitoring - I notice that the member for Solomon is here today with representatives from TenixToll - this particular issue and put in place a moratorium for two years to try to sort these issues out and to start acting. I do not believe that the Commonwealth monitoring this issue is good enough, because what will happen is the Commonwealth will be monitoring Territory businesses going out of business.
This period should be used for the Commonwealth to get this process in order. It will give TenixToll more time to understand the real challenges up here, and put in place sustainable arrangements with the hundreds of Territory businesses that need the Defence work to survive and prosper. I hope that we would have bipartisan support in this House for that call.
ANSWER
Madam Speaker, I thank my colleague, the member for Karama, for her question. Everybody in this House must agree - particularly members who have been lobbied by Territory business on this - that the federal government’s handling of the DIDS Defence supply contract has been nothing short of an absolute shambles.
We can see the concern in the industry by the newspaper headlines this morning, ‘Defence firms and jobs to fly south’. The story of Mike Martins and his Performance 2000 business shows the type of anxiety there is out there in that sector of the industry. It certainly shows, from the Commonwealth’s point of view, a total lack of understanding of the Defence support industry here in the Northern Territory.
We know that the Commonwealth contract has been let to TenixToll. However, just months before the prime contract is about to kick in and take place, the future of the vast majority of those hundreds of Territory businesses who actually perform work for Defence is in jeopardy. They have not had advice from the Commonwealth about exactly how this contract is going to roll out, and what their opportunities are to participate in partnership with the prime contractor. There is serious uncertainty, and no wonder.
When you actually look back at this whole debacle of the Commonwealth letting this contract, the reality is that the contract was let based on the work that was occurring here in the industry back in 1999. We all know, in 2004, with the increased ADF presence in the Northern Territory since 1999, there is significantly greater ADF presence in the Northern Territory, particularly in the Top End. Those benchmarks that were contracted in 1999 do not represent the work that is up here in 2004.
There are also very real concerns that, since that time, we have seen wage rates in the Northern Territory escalate quite significantly. They are further being compounded by the major projects in the Northern Territory such as the LNG construction project. Therefore, the whole thing has been a shambles from the Commonwealth from day one.
The answers to these questions are still unclear, and the signs are not good. I met this morning with senior executives from TenixToll to advise them of the concerns of local industry in the Territory. It was a very good, productive meeting. TenixToll are also aware of the concerns of local business in the Territory. There is a workshop on tomorrow where TenixToll are actually going to brief Territory business.
However, I still believe that there is a significant amount of uncertainty. We are talking about small business operators here, people who have loans and finance conditions with banks and finance companies, and jobs in the Northern Territory. I made the call last week that there should be a moratorium of the contract in the Top End for at least two years to try to sort these issues out. I have written to the federal Defence Minister and called upon him to stop monitoring - I notice that the member for Solomon is here today with representatives from TenixToll - this particular issue and put in place a moratorium for two years to try to sort these issues out and to start acting. I do not believe that the Commonwealth monitoring this issue is good enough, because what will happen is the Commonwealth will be monitoring Territory businesses going out of business.
This period should be used for the Commonwealth to get this process in order. It will give TenixToll more time to understand the real challenges up here, and put in place sustainable arrangements with the hundreds of Territory businesses that need the Defence work to survive and prosper. I hope that we would have bipartisan support in this House for that call.
Last updated: 09 Aug 2016