This article is more than 1 year old

This article is more than 1 year old

The censoring of an audit critical of Australia’s lucrative arms deal with weapons manufacturer Thales must not be used as a precedent to hinder scrutiny of future defence contracts, a bipartisan committee has warned.

The attorney general, Christian Porter, drew criticism last year when he gagged the auditor general, Grant Hehir, from criticising Australia’s purchase of a $1.3bn combat vehicle fleet.

Porter had been urged to censor the report by Thales, a French multinational that was furious at a finding that Australia could have paid half the amount for a different vehicle through a United States military program.

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The use of the attorney general’s gagging powers was unprecedented but in the space of months the auditor general was warned they could be used in at least two other audits.

The bipartisan joint committee of public accounts and audit, chaired by the Liberal Dean Smith, has now warned it would be “extremely concerned” if the Thales case was allowed to set a precedent.

“The committee would be extremely concerned if the application of section 37 as occurred in this instance established a precedent that prevents future robust scrutiny of defence acquisition or sustainment,” the committee warned.

The committee’s report, tabled this week, also proposed a number of reforms to temper the attorney general’s ability to redact audit reports.

That includes legislating a time limit for the attorney general to make redactions. The committee also proposed requirements that more detailed reasoning be given when the gag powers are exercised, and that greater consultation take place between the government and MPs on the committee.

Porter had justified his intervention because the audit report jeopardised Thales’s commercial interests and threatened Australia’s national security, defence or international relations.

The auditor general said his office was expert at handling sensitive national security and defence material, and had consulted the defence department before the audit’s release.

The committee’s deputy chair, Labor MP Julian Hill, said the committee’s report had finally accepted there was “no national security classified material in the report”.

“The most concerning implication is the possibility that Christian Porter’s decision may set a precedent to stop future scrutiny of other ‘sovereign capabilities’ such as submarine or shipbuilding programs worth over $100bn,” Hill said. “This must not happen.

“The auditor general’s suggestions for changes to legislation will be considered further in the next review of the Auditor General Act, expected in the next term of parliament.”