Senator FIERRAVANTI-WELLS (New South Wales—Parliamentary Secretary to the Minister for Social Services) (15:07): It was very clear from Minister Johnston's intervention today that the five or six years under Labor were characterised by absolutely no contracts and no obligations. It is hypocritical for Senator Gallacher to come to this place, stand here and berate us on this side after Labor's appalling legacy in this space. This is a government which will make decisions on naval matters and on defence matters. And we will make those decisions for the right reasons. It is vitally important that Defence acquisitions have to be made on the basis of Defence logic—not industry policy, not regional policy, but on the basis of sound Defence policy. As Minister Johnston has said, we have not yet made a final decision on the design and the build of the next generation of Australian submarines. What we do know is that we will be having more submarines. The bulk of the work on this project will be centred around the South Australian shipyards to take advantage of the work that has been done in that area over many, many years. This, of course, is consistent with our pre-election commitment. Labor in government failed to make a vitally important decision in relation to submarines over the six years they were in government. It is important now that we move quickly to fill this capability gap, because, as the minister said, it is now a decision about avoiding a capability gap. It was demonstrated very clearly by the minister in his answer to Senator Conroy that when he opened box SEA 1000— Senator Conroy: It's a credibility gap. Senator FIERRAVANTI-WELLS: the box was absolutely empty. In fact, there were actually cobwebs. You sat on your hands for five or six years and did absolutely nothing about it. Now you are coming in here bleating and crying crocodile tears and indulging in what can only be— Senator Conroy: What are you talking about? Senator FIERRAVANTI-WELLS: only be described as absolutely hollow acts. For example, I want to quote the joint media release of my Liberal colleagues in South Australia— Senator Conroy: Oh dear, how embarrassing. The DEPUTY PRESIDENT: Order! Senator Fierravanti-Wells: You indulge in this hollow union pledge of promising to advocate that all naval ships and submarines are to be designed, built and maintained in Australia. This is meaningless, because we all know that in Defence matters it is vitally important that we do work, and we have been working, with other countries for decades. The Collins-class submarine was a Swedish design—the company Kockums and US combat systems by Rockwell and French power and propulsion by Jeumont Schneider. The Air Warfare Destroyer was based on a Spanish design by Navantia with combat systems manufactured by the US company Lockheed Martin. International cooperation has long been a feature of Defence matters. Senator Conroy interjecting— Senator FIERRAVANTI-WELLS: Senator Conroy, let me tell you that having spent many years married to Commander Wells, who was in the Navy for 35 years— Senator Conroy: Was he a submariner? Senator FIERRAVANTI-WELLS: I can say modestly that I do know something about Defence matters. What we do know is your appalling legacy during the time that you were in government. We have stopped the Defence cuts and have increased spending on Defence. Your period in government was one of the poorest for spending in Defence. Under Labor Defence spending as a share of GDP dropped to 1.56 per cent in the 2012-13 budget—which is the lowest since 1938. In 2012-13 Labor's 10.5 per cent cut to Defence was the largest single cut since the Korean war. Immediately following on your 2009 white paper, Labor cut or deferred $16 billion from the defence budget out to 2016-17. (Time expired)