Defence Investment in the NT

Dr RAHMAN (Fong Lim): Madam Speaker, I will again talk about my expansive Fong Lim electorate, which has residential areas like Stuart Park, Bayview, Woolner and The Narrows; industrial areas like Berrimah, Wishart and Winnellie; and special purpose areas, like Charles Darwin National Park and Hidden Valley. However, tonight I will focus on Coonawarra, Eaton, East Arm and Defence service-adjunct precincts, which we do not talk about enough in this House, as far as I am concerned …

Mr Howe: Great topic.

Dr RAHMAN: Thank you, Member for Drysdale.

I do so to underscore the significance of Defence investment for our economic future. It will be critical to us realising a prosperous economic future.

I had the privilege on 24 January to join the Chief Minister in her capacity as Minister for Defence NT for her launch of NT Defence Week, which also included Defence industry and Defence veterans’ awards launches. We gathered at Shorebarge, which is a business at East Arm. It is a marine logistics firm with experienced vessel masters who operate landing barges and execute safe beach landings and wharf moorings.

The stakeholders at that session were the kind of people who already know in many ways how important Defence is to our future. They included people from the Army’s 1st Brigade, Master Builders, ICN NT, the Chamber of Commerce, the Australian Industry and Defence Network, Charles Darwin University and the NT Indigenous Business Network, as well as hardworking public servants in DefenceNT. That is preaching to the choir, to some extent; that is a group of people who understand how important Defence industries are to us.
I will speak about the economic multiplier effect of Defence industries and Defence investment. Our government is focused on trying to stimulate economic growth, and that is the right strategy. One of the five areas on which we are concentrating to try to stimulate that growth in is Defence. It is important to understand what a potent economic multiplier effect Defence spend has in the Northern Territory. In fact, it is disproportionately large relative to any other industry.

ICN NT—which all of us in the Chamber would agree provides good data for us to work with comparatively in understanding supply chains, logistics and business in the Northern Territory—estimates that almost 70% of reported contracts in Defence over the past seven years went to local companies, not FIFO or fly-by-night companies. If you translate that, it is something like $800m of the total $1.15bn spend that has been circulating through the NT economy.

Defence does not just spend in little pockets by themselves; it ends up chipping into our businesses, shops, contractors and supply chains. It is critically important that we do everything that is required to make sure we secure our Defence future. Why do I say that? Because it is not a sure thing. I will drop back a step.

In August 2023 ACIL Allen produced the Economic Impacts of Defence Infrastructure in the Northern Territory report. This is great for those of you who are looking for a bit of light reading to understand how to improve our economic prospects. It is an excellent overview of the economic, Defence industry and construction industry landscapes and how they intermingle.

This report, if it is to be believed—I admit it may be a little on the optimistic side in some regards—paints a rosy picture of how important Defence industries are here. According to this report, the Defence sector is expected to invest up to $6.2bn in the Northern Territory by 2027, potentially contributing $800m per annum to the current levels of construction activity to the Top End as well. The Defence sector could create upwards of 7,000 jobs in the Northern Territory—4,000-plus directly in construction and 3,000-plus across the economy—and add almost 5% to gross state product. However, that is if the NT can sustain high levels of local investment. That is key.

What we want is a Defence future where Defence has a footprint in the Northern Territory; what we want to move against is the prospect of a FIFO Defence future, which is a real risk unless we lobby the federal government to ensure our Defence security going forward.

There are two overall findings in this report that are worth noting. First, the NT construction industry has a track record of delivering on industry needs. Even though we have workforce limitations, when we need our workforce to kick in it does kick in. The NT’s civil works capacity is underutilised and ready to deliver projects. If you look at CDU Danala and across the harbour, you see that we can deliver. The industry locally, including businesses in East Arm and in my electorate across Fong Lim, has the capacity to scale up when we need it to scale up. More alarming is the second overall finding that policy action is required to address the constraints on industry.

Four of the findings that came out of this, findings 15 to 18, are worth reflecting upon. We need: a workforce strategy for the construction industry; to address barriers to temporary and permanent migration; a Northern Territory population strategy; and to address accommodation shortages in order to build a local workforce.

These are issues I have consistently brought up, and they impact our Defence future. Staff retention issues have been used as a justification for scaling down troop numbers in the north. This government is committed to improving liveability in the Northern Territory, which is a critical part of making sure that Defence wants to be here as well.

I am not the only person saying these things. People who are passionate about advocating in this area, like Dr John Coyne at the Australian Strategic Policy Institute and Dave Malone, former CEO of Master Builders, have been writing about it for a long time in things like The Strategist and ASPI. I encourage members to read some of the things that they have written.

In ‘To build its future, northern Australia needs clarity from Defence’ we can reflect on, for example, Bandiana being a long way from the Northern Territory and that decision conveying a lack of commitment to northern Australia.

‘Taking Defence beyond the barbed wire in northern Australia’ points out that a fly-in fly-out model for Defence operations is something that is being bandied about if we do not push harder to fight our corner. Likewise, the real challenge is ensuring continued work for those who need to stay in the north, when it comes to Defence being an employer of choice in the construction workforce space.

The most important thing I want to reflect on is from ‘Australia must think more about Defence’s position in the nation’s north’:

Somehow and quickly, given the urgency articulated in the DSR, …

That is the Defence Strategic Review:
… we need to get better at linking everyone to be more organised and to avoid simply using a model that assumes activities will self-organise.

It will not happen by accident. It would be a mistake to think that Defence will just land here even if we do not try for it. Do not assume Defence investment will come automatically due to existing bases or what was written in the Defence Strategic Review; it is wishful thinking. Delays and reprioritisation of Defence works are evidence of that. A good recent example is the shifting of helicopter assets and support workforce to Townsville. We need to lobby to make sure that those kinds of things do not happen.

The Defence Strategic Review is a wonderful document, but the gap between the rhetoric of it and the reality of its implementation in the north is wide. It should matter to everybody in this House. We will have to work with the federal government to make sure that we fight our corner when it comes to Defence. Defence spending is highly political, and funds are being redirected to southern states for economic and political reasons. We need to actively lobby Defence and the federal government to secure Defence investment and see actual follow-through on the Defence Strategic Review.

I am pleased to say that our government is committed to realising the potential of the strategic review, in conjunction with the federal government. You could tell the shift in optimism from the range of stakeholders at Shorebarge in East Arm the other day knowing that they have a government committed to fighting our corner on Defence and a Chief Minister who also represents Defence industries.

The next sensible opportunity for all of us to do something positive in this space will be NT Defence Week, which is coming up at the end of April. I encourage you all to add it to your calendars, because it is important that we put on a united show to say that Defence matters to the Northern Territory in terms of not just personnel but also businesses, supply contracts and the entire Defence ecosystem. It is an opportunity to engage with the sector, families and suppliers. For me personally it is an opportunity to generate greater engagement and exposure of local Defence businesses, particularly those based in the Fong Lim electorate, for which I will be advocating.