The release of the Defence White Paper, Defence Integrated Investment Plan (DIIP) and Defence Industry Policy Statement (DIPS) provides what industry has been asking for over the last 18 months; some certainty. Certainty about how the government sees the world, certainty about how they want to approach capability over the coming years and certainty for funding.
Were the documents worth the wait? According to the dozen or so industry leaders I’ve spoken to since the papers were released, the answer is an overwhelming ‘yes’. Many have questioned elements (pricing, timing, detail available) but the overall response seems positive.
As I’ve written elsewhere, the IIP will be supported by an extended online document that seeks to provide further granularity into schedule, costs and requirements. This document has yet to go live online but is expected to be launched mid-year and will be managed by Vice Chief of the Defence Force Group. It will, ostensibly, be a living document that’s updated as programs reach milestones such as approvals, programs are added or leave and costs will be adjusted as Defence refines requirements. That’s been tried in the past with little success, so watch this space.
The timescales are also somewhat vague. The IIP website should hopefully provide more clarification.
The IIP is a vastly different document compared to its Defence Capability Plan (DCP) predecessors. The IIP provides none of the level of programmatics that industry has seen previously but more of a broad brush approach that links together how platforms and technologies connect to form an ADF wide capability. That’s challenging the ‘cylinders of excellence’ or stovepipes that Defence is so fond of.
The other change is the use of inflation adjusted figures in the DIIP. I have no doubt that ASPI’s Mark Thomson and Andrew Davies will crunch the numbers to see what this means for budgets and timelines for the big ticket items.
The DIPS is also a case for celebration amongst Defence industry. It’s also hard to argue with a document that industry help put together in the first place. The official recognition as Defence Industry as the ninth Fundamental Input to Capability (FIC) is welcome in industry circles. But as to what this looks like in behaviours in contracting and in delivery is still unknown.
Defence itself is an organisation still implementing the First Principles Review with the abolition of the Defence Materiel Organisation, the creation of Capability Acquisition and Sustainment Group and the general reorganisation of who does what and how. Cultural change takes time and can be a painful process as inefficient yet comfortable processes, and sometimes people, are shed and new things emerge.
Defence industry understands the fact that their main customer is in a state of flux but is still being asked to deliver on large complex programs all the way down to simple things like lawn mowing services around the country with everything else in between.
The confirmation in the DIPS that roughly 35 programs will be consolidated under the aegis of two new bodies, the Centre for Defence Industry Capability (CDIC) (under AusIndustry rather than Defence) and the Defence Innovation Hub (under the Defence Science and Technology Group), is good news. Both bodies will begin operations mid this year and will provide a much easier point of contact for both Defence and Industry to interact with one another.
The Next Generation Technologies Fund will also be a good tool to focus on the lesser known capabilities that Defence has prioritised under the White Paper like cyber, space, ISR, quantum technologies, medical countermeasures, trusted autonomous systems and enhanced human performance; all sectors that other parts of the economy and industry have an interest in alongside traditional defence industry companies.
However, in being confirmed as a FIC, Defence industry is almost like the dog chasing the car who has caught the vehicle; what now? Planning on the workforce front can take place. Further education and training in various critical areas can be targeted and delivered. Capital investment opportunities that have been left on the backburner have new life. This is what certainty brings to the game.
Minister for Defence Senator Marise Payne also confirmed at the launch of the White Paper that a detailed naval shipbuilding plan will be released in 2016. Again, this document will provide more certainty for an industry looking for leadership. Comments from industry leaders in this space are looking at the long game—not what shipbuilding looks like in 3–5 years’ time, but what it looks like in 10–20 years’ time as a coherent whole encompassing design, build, sustainment and disposal. Those issues will need to be addressed in the upcoming shipbuilding plan if it is to have a shelf life beyond the political cycle.
Is the trifecta of the White Paper, DIPS and IIP perfect? No, but they were never going to be all things to all people. Nor should they be. However, they’re here now providing what certainty they can.