A sovereign defence industry for Australia
24 Apr 2018|

International defence companies have been warned that seeking a share of the $200 billion to be spent upgrading the Australian Defence Force will require a much greater commitment than simply obtaining an Australian business number.

Defence Industry Minister Christopher Pyne used a speech at the Australian Strategic Policy Institute last night to launch Australia’s first Defence Industrial Capability Plan, which he described as a blueprint to create the maximum alignment between defence needs and defence industry.

Mr Pyne said the government’s goal was a sovereign defence industry with the capability, readiness and resilience to help meet Australia’s needs, to the greatest extent possible, within its own borders.

He said the plan restated the need to maximise the involvement of competitive Australian companies in the acquisition, operation and sustainment of defence capability.

‘The plan has a key message for industry—that we expect all companies, including primes, that want to work with Defence, to consider how they currently or might best fit in to the big picture,’ Mr Pyne said.

We are redefining the phrase ‘Australian Defence Industry’. Having just an ABN is not enough if you are planning to be part of this. Being a serious contributor in the Australian defence industry means having Australian-based industrial capability.

It means company and board presence, infrastructure and a skills base that can complete value-added work here in Australia, employing Australian workers.

Mr Pyne said Australia had to have access to, or control over, certain industrial capabilities. This ‘sovereign industrial capability’ will secure the ADF’s ability to achieve its operational mission today and well into the future.

In the national defence context, the term ‘sovereignty’ means the ability to independently employ defence capability or force, when and where required, Mr Pyne said, ‘to produce a desired military effect, with or without notice, with or without our allies’.

He said governments on both sides had announced many policies and initiatives over time to support defence industry.

But the unmet challenge, until now, has been to unite these initiatives in a single, detailed policy framework that reaches across the breadth of planning and decision-making through to implementation.

We are looking for an Australian defence industrial base that will stand us in good stead through to the end of the century and beyond.

‘Our goal is clear,’ Mr Pyne said. ‘We seek to achieve, by 2028, a matured, innovative Australian defence industry with greatly enhanced levels of competitiveness in the international marketplace. We talk about a decade but we are really looking way beyond that point.’

The government was fully committed to Australian participation to the highest extent possible but the nature of global supply chains meant no country could be fully self-sufficient in its defence or defence industry.

Our defence sovereignty is enabled by industrial capability sourced both within Australia and overseas.

Thus we will continue to leverage the US and the international market for many major platforms and systems, to deliver the best capability to our warfighters.

Mr Pyne said he had pushed for more work to be done by Australian companies on the Joint Strike Fighter program. So far Australia had won JSF contracts totaling $1 billion, he said.

He indicated that the tempo of government decision-making on key defence issues had increased significantly, with 90 approvals up to March. While those will not each launch a separate project, such decisions are a key to keeping the business of defence moving and the rate is much higher than in recent years.

He listed an initial 10 ‘sovereign industrial capability priorities’ operationally critical to the Defence mission. There are priorities within the Integrated Investment Program over the next three to five years, or which need more dedicated monitoring, management and support due to their industrial complexity, government priority or requirements across multiple capability programs.

They are:

  • Collins-class submarine maintenance and technology upgrade
  • Continuous shipbuilding program (including rolling submarine acquisition)
  • Land combat vehicle and technology upgrade
  • Enhanced active and passive phased array radar capability
  • Combat clothing survivability and signature reduction technologies
  • Advanced signal processing capability in electronic warfare, cyber and information security, and signature management technologies and operations
  • Surveillance and intelligence data collection, analysis and dissemination, and complex systems integration
  • Test, evaluation, certification and systems assurance
  • Munitions and small arms research, design, development and manufacture
  • Aerospace platform deep maintenance.

Mr Pyne also announced a new, dedicated grant program valued at up to $17 million per year to provide direct support to Australian small to medium-sized enterprises (SMEs) that contribute to the sovereign industrial capability priorities.

This competitive grant process, to be delivered by the Centre for Defence Industry Capability, will help SMEs meet a portion of the costs for capital equipment purchases and non-recurring engineering costs.

Mr Pyne said the government’s vision for defence industry a decade from now, in 2028, had five objectives:

  1. A broader and deeper defence industrial base where agile SMES are better placed to interact with Defence and global defence companies, and aren’t solely reliant on the Australian Defence Force for their success.
  2. A strategic approach to defence industry investment to ensure government investment in critical defence capabilities is prioritised, and that Australian businesses are provided the maximum opportunity to be involved.
  3. For an innovative and competitive defence industry boasting world-leading defence capabilities developed through increased collaboration between Defence, business, universities and the research sector.
  4. A robust export capability where Australia’s defence industry is a key player internationally, providing greater stability for businesses across peaks and troughs in domestic demand and increasing their capability to support Defence.
  5. For a Defence and industry partnership that enables Australia to position for the future by ensuring it has the right people with the right skills, in the right place, at the right time to respond to changing environments, to seize opportunities and to manage increasing strategic and technological complexity.

‘We are at a very important moment in time for Australia’s defence industry, a true watershed moment for our whole nation,’ Mr Pyne said.