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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-08-31 Daily Xml
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Bills

Appropriation Bill 2023

Estimates Committees

Adjourned debate on motion:

That the proposed expenditures referred to Estimates Committees A and B be agreed to.

(Continued from 30 August 2023.)

Mr PATTERSON (Morphett) (17:18): It is good to speak on the estimates side of the Appropriation Bill. Obviously, before we had estimates we got to speak on the Appropriation Bill itself, which gave us the opportunity to speak about the recent state budget. From my perspective, I was able to highlight that what that state budget was really about was a buy now, pay later budget, done in the face of a massive cost-of-living crisis in South Australia.

As I mentioned, we put that down and were able to follow that up in the estimates process, where we could actually drill down into each of the different portfolios. I had the opportunity to sit on quite a number of the estimates sessions and it gave me the opportunity to investigate, in quite good detail, the spending in various departments, such as the Department for Energy and Mining, the Department for Industry, Innovation and Science, the Department for Trade and Investment, the Department for Health, and also Defence SA in relation to the defence and the space industries.

While all these portfolios are very important, I want to take some time, to start with, discussing the defence and space portfolios, because in my Appropriation Bill speech I focused a lot on the energy and mining side of things. I was able to focus on the skyrocketing power prices that are facing hardworking South Australians. Even as we sit here today, we have just had the report released by ESCOSA showing again that the average South Australian household faced power prices of another $169 as an increase, and then small businesses even more: they are up nearly $650.

These are massive price increases and, at the same time for all that money, what was also revealed today by AEMO is that South Australia is again at risk of blackouts this coming summer. For all those massive increased payments in power bills that South Australians have had to face, they still have massive unreliability problems and blackout problems.

If I then move on to space and defence, as I have said previously, thank you to all the staff who were there. I note that Richard Price, who is the CE of Defence SA, joined the Minister for Defence and Space Industries. I would like to thank him. He has recently announced that he will be retiring later this year. He has certainly worked really hard in that role and I think has had some good results for the state. We know that South Australia is the defence capital of Australia, and so it is important that in South Australia we have a good focus on that, and I think Richard, in his role, certainly had that.

If we talk about space, that is also a really good emerging opportunity for South Australia, and that was one that the former Liberal government leaned into heavily. I think most people would agree it is one of the legacies of that government because, increasingly, there are more and more opportunities in space in South Australia. The rapid rise in technology has seen a renaissance in where space is going worldwide, and we have some fantastic South Australian companies that are taking part in that, companies such as Fleet Space Technologies, Inovor, Myriota, Neumann Space, Southern Launch and Space Machines Company.

These companies are small, but Fleet has done fantastically in some capital raisings and has a value related to that of about $350 million. The other companies are growing too, but they are starting out on their journey. It is important that as a state government, as a federal government, we support this industry because it will be important for sovereign capability as well. We saw in the recent Defence Strategic Review space becoming part of defence planning.

The US now have their own space force in their armed forces, and it is not too hard to see something similar happening here in Australia, so sovereign capability is really important. We need to back these companies in so that they can continue. When we were in government there was huge momentum in South Australia with capability being established in lots of these companies.

One of the forward leaning approaches to that was when the former federal government was running its Modern Manufacturing Initiative, which came out of COVID, and that recognised the need to retain manufacturing capabilities here. The federal government had their Modern Manufacturing Initiative where they looked to grow manufacturing in Australia, and companies could bid into via consortia. That was what happened in South Australia, where we had Fleet Space Technologies joining up with other space-related companies—AT Space, Q-CTRL, Alauda—looking to set up a space manufacturing facility.

They put in money. The state government has said before it is really important we lean in and leverage that. The state government also provided $20 million towards that to be able to have what was known as the Australian Space Park, which was forecast to be at Adelaide Airport and that would provide a Common User Facility for not only those four companies but other companies in the space supply chain to be able to use.

This equipment is very specialised, and it is also very expensive, and so it is really hard, especially for these smaller companies, to be able to afford that. That bid was put up and, pleasingly, it was supported by the federal government, when in March 2022 they agreed also to contribute $20 million. A combined total of $66 million was to go towards this Australian Space Park.

Interestingly, with the Modern Manufacturing Initiative, the way the funding was structured was that the federal government committed that they would put in money but no more than a third of any bid's value. At the same time, they encouraged state governments to also contribute but also not to a third. Effectively, you could have bids where it was about a third federal, a third state and then a third private consortia, and that was quite approximate to what happened here at the Space Park. That was a really important breakthrough here in South Australia, with money being invested into the state for the long term. I questioned the minister about the progress of that because, as I said, it is a really important initiative.

Unfortunately, we saw in this year's state budget that the state government had withdrawn their $20 million contribution to the Australian Space Park and repurposed it to put towards a Common User Facility at Lot Fourteen. The net result, though, is that the federal government, in terms of their funding contribution, wanted to make up more than a third of any particular bid. It really causes alarm bells. We already know that the federal government have pulled back some significant areas in terms of their funding in the space industry. They are going through all these Modern Manufacturing Initiative bids, and the silence from Canberra is really concerning.

I talked to the minister about this and the reply was, 'That's up to Fleet to be able to deal with the federal government. We've got our $20 million over here and we're going to put it at Lot Fourteen and we will just hope for the best, but it's uncertain.' It is always a lot easier when you are trying to tell the federal minister, Ed Husic, 'You should continue your funding here in South Australia,' if you can actually say, 'We're putting our money where our mouth is because we are also backing this.'

Well, that is not the case here, and really there are huge concerns as to what is going to go on there. It would be a real missed opportunity because what we could be left with now in South Australia is that, instead of having a $66 million Australian Space Park with a significant Common User Facility with equipment such as PC boards and a manufacture testing assembly, yes, we will have a $20 million Common User Facility, but it will be much less in scale.

Another thing that we have learned in estimates is that of those four consortia parties, two have now left, companies that really would have added significantly to it. ATSpace have significant-sized rockets with a hybrid propulsion system rather than the traditional one, and that would have been really important, and Q-CTRL is a company specialising in high-speed quantum analytics and technology. With space and the immense amounts of data, high-speed compute is really important and something Q-CTRL would have brought to it. They were even looking at setting up their head office; unfortunately, that does not seem to be the case.

This all points to the fact, as I have said in parliament before, that the Minister for Defence and Space Industries is thinking, 'We will just continue on with the great work that the former Liberal government did. I won't have to actually put effort into this; it will just look after itself.' Sadly, that is not the case. We saw how hard the member for Dunstan, the former Premier, worked in this area. It required a lot of hard work.

It required convincing his federal counterparts that this a future industry for Australia at scale that will create plentiful jobs. It is not some niche industry. It actually brings high tech, highly skilled calibre into your economy and also allows you to have national sovereign capability. This is a really concerning development, and the minister needs to work very hard to ensure that the federal government continue on with their funding in this area.

The other aspect around the questioning is that we talked about what it is going to look like; what the footprint is going to be like at Lot Fourteen. It was revealed that the federal government is not pursuing building Australia's own satellites to be able to have our own data, and therefore that means that we will not need to build these bigger satellites that were envisaged at the Australian Space Park. They will be smaller satellites. This could well be a big missed opportunity for our state but also for our nation in terms of sovereign capability.

We know there are significant defence projects in the pipeline. I have talked before about how defence is getting more and more closely aligned and interested in space, to the point where there is the capability with these newer satellites to launch constellations quickly.

You can have them on standby ready to launch over an area of operation within an hour or two, and can actually have surveillance there. If you think of the Indo-Pacific, the big Indian Ocean with thousands and thousands of square kilometres and trying to offer surveillance, being able to put satellites up here quickly is a really important sovereign capability that we need to have in Australia. That is what would have been possible, but it seems like that is being backed away from.

Interestingly also is that, while we are struggling to get funding here in South Australia for our modern manufacturing initiative related to the Australian Space Park, over in Queensland Gilmour Space Technologies was able to get confirmation that they will get their $52 million federal funding as part of the MMI grant for their Australian Space Manufacturing Network initiative in Queensland. It was another separate bid but it actually includes some South Australian companies. I have spoken before about Space Machines Company.

Now, all of a sudden, we are going to have this significant investment into space in Queensland rather than in South Australia. Where we once could quite easily claim that we are the space capital of the nation, we need to ensure that that continues. That is at risk and begs the question: why is the federal government prepared to fund in Queensland but not here in South Australia? Is it because Queensland's state ministers work harder for their state than what is happening here in South Australia? There are some real concerns around that.

In terms of some of the other broader cuts that have been going on federally—and I did make the point in estimates that while the cuts are a federal decision they have rippled down and had direct effects here in South Australia. In the recent federal Albanese budget nearly $80 million in space-related programs were axed. One of those, the Moon to Mars supply chain facilitation grants, was aimed at helping small and medium space organisations get part of the supply chain to NASA's plans to go to the moon and then to Mars. That would have given an opportunity for companies to get involved in the supply chain.

Also cut was a $30 million program which was designed to support faster access to space flight by Australian companies. We have seen how important these programs are. The South Australia government, in a first for the country, provided money for a state-based satellite to get launched, Kanyini. That is able to give spaceflight heritage to a company here, Inovor, that I spoke about previously. That was a hope also, that it would have occurred had that $30 million program gone ahead. That is a real concern as well.

Finally, another federal funding program cut was the $32.5 million that was allocated to support the development of Australian spaceports. Again, here in South Australia, we have a fantastic company, Southern Launch, that is trying to get their Whalers Way spaceport up and running. At Koonibba they have their test range and there has been some fantastic progress there, but we are waiting eagerly for Whalers Way to get off the ground, and certainly that funding would be important.

When talking, I raise these matters with the minister just in terms of what the impact has been on the ground with our space sector. It would be fair to say that they are certainly not as up and about as they were previously. That is not to say that they are not an entrepreneurial set of companies as it is. They are very positive, but certainly we need to be backing in our companies here.

Finally, an even bigger cut which happened after the federal budget, but which was potentially on the books because it was quite uncertain in the federal budget papers, was the $1.2 billion National Space Mission for Earth Observation. It was intended to be the nation's first space mission to launch satellites, which would have helped us as a country to detect bushfires and floods and undertake maritime surveillance. Those programs directly come down and cause diminished opportunities here in South Australia.

It is really important, too, for this state government to continue to work hard in this area, to work alongside private industry and not just expect them to go it alone. It really helps them, in terms of their ability to help employ South Australians and to help advance their technologies, if they know that the state government is supporting them. That really needs to be the case. I want to see this Minister for Defence and Space Industries working hard, as we did when we were in government, because we know that when every other government around the world is investing in their space industry and capability it is not happening here in Australia. That is a real concern.

That being the case, and talking through that, maybe one final point to talk about is the effects, and different South Australian companies are affected in different ways. One of the effects has been that there was previously a massive interest in international investment into what was happening here in South Australia in relation to space. We had international companies wanting to set up here. One example is Airbus, who were interested in getting involved in the Australian Space Park during the early days, but that has evaporated now.

We need to continue to attract these international companies. Realistically, as I said before in terms of the defence projects, the ones that are going to lead them are the primes, so you need these big international companies. We want them to set up in South Australia and then we want them to utilise the South Australian companies in their supply chain as well. It is crucial.

In estimates, Richard Price explained that perhaps the greatest group affected is the international companies who are looking at their strategic plans for Australia. They are now revisiting the strategic plans, and that rings alarm bells. Again, we need the Minister for Defence and Space Industries to be working hard to attract these international companies here into Australia.

We also touched on AUKUS, and I do not want to undersell that, but certainly it is a massive undertaking and project for the country. The former Prime Minister Scott Morrison took the bold decision to do that, principally to have nuclear-powered submarines constructed here in South Australia. Pleasingly, the Albanese government has continued that, so it is certainly going to be massive for the state. We need to make sure we are capturing those opportunities while also understanding the massive step change that is going to be required.

Without going into the questions chapter and verse, we certainly covered a lot of those topics in the estimates as well. You would have to say that, where we are at with the AUKUS, on some of those questions we will have to wait until next year to be able to understand them further. That will be something we will be following up on this side of the house going forward—certainly in the next estimates committee. With that, I will finish and say thank you to the Deputy Speaker for his chairing of the committees I sat on, and I thank all members for their input as well.

Debate adjourned on motion of Mr Basham.

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