“An invisible opportunity.”
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This was a phrase used a number of times by Nationals Senator Bridget McKenzie during a senate inquiry into the impact of defence facilities on rural and regional communities.
The senate committee sat in Bendigo on Monday, hoping to gain an indication of flow on economic benefits of regionally-positioned defence bases.
Loddon Mallee Regional Development Australia committee chair Linda Beilharz left senators slightly puzzled when she said the economic group had very little interaction with local defence bases, and was unaware of potential business opportunities.
Ms Beilharz said she was not sure how much the local defence leadership interacted with the Bendigo community.
Committee chair senator Alex Gallacher said the inquiry had identified a gap in communication between defence and local business.
Senator McKenzie estimated the defence force’s contribution to the regional Victorian economy to be $436 million.
The committee was tasked with finding ways of enabling smaller, local businesses to get a share of that cash, she said.
“Regional Victoria is well placed with a supply chain that delivers for the national defence industry, and we want to see that grow,” she said.
“We want to make sure as a government, when it's cost effective to do so, that we're putting money back into regional areas.”
The easier option for the defence force was to engage a large contractor on a national level, Ms McKenzie said.
Cleaning, food services and military tourism, for example, were all money-spinning contracts that could be given to local businesses, she said.
The committee also heard evidence of slow payments by the defence force for works completed.
But Hoffman Engineering general manager Sam White said the 60-90 day payment turnaround was not unusual for large contracts.
“We can have tens of millions in invoices waiting to be paid at any one time,” he said.
“There's nothing fast when it comes to the military. They are very reliable payers, it's great work, but if you wanted to do the work today and get paid tomorrow, that's just not realistic.”
Defence contracts currently account for under 10 per cent of Hoffman Engineering’s output, by Mr White said he expected that to grow exponentially in the coming years.
The inquiry will table an interim report after sitting in Wodonga on Tuesday, from which recommendations will be made to federal government.
