OPINION - DEVELOPING OUR OWN CAPABILITY: THE FEDERAL OPPOSITION PLAN

01 December 2021

After eight years and six Defence Ministers this federal Liberal government still doesn’t get the importance of the Australian defence industry - particularly the Western Australian sector and our geo-strategic positioning. As the ‘drums of war’ rhetoric grows and our geo-strategic situation deteriorates, our major shipbuilding projects are seeing increasing delays.

INTEGRATING LOCAL SMEs INTO SUPPLY CHAIN

Defence must engage local Australian industry as an integral partner. Local defence industry should not just be seen as a critical enabler of defence capability, but also as its own domain of capability, able to work with all the other domains, to ensure Defence’s operational success.

Therefore, it’s vital that prime contractors engaged by Defence on these significant projects properly integrate Australian small and medium enterprises into their supply chains locally. This requires leadership from the top. That’s why the Australian Labor Party has committed to having enforceable Australian industry capability requirements in contracts with the primes, not just requiring ‘best endeavours’,  and that those requirements are audited and enforced.

The COVID-19 pandemic has demonstrated how vulnerable we are to supply chain and skill shocks, potentially worsened in the event of armed conflict. We need to ensure our Australian industry, particularly in WA, is engaged and available to support our defence forces.  

NEED FOR PROPER MANAGEMENT

This government is allowing primes to overlook Australian industry when they should be holding them to account. They should be managing these billion-dollar contracts (as well as smaller ones) properly. Ultimately, it is Australian businesses, workers, sovereign capability, the ADF and all Australian taxpayers that lose out when contracts go offshore.

It is not acceptable that this government lets primes get away with claims that capability is not present in Australian industry when we know it is, or could be developed. Australia needs to get the biggest bang for its $270bn of defence spending over the next decade. This means government identifying gaps in local industry capability, in order to ensure these are plugged by supporting businesses to fill them. This is essential to expanding our sovereign capability.

There’s no doubt the Government’s decision that Australia have a nuclear-powered submarine fleet will eventually improve our defence capability in an increasingly challenging environment. This decision, made possible because of a change of policy by our closest allies, is supported by Labor. It’s vital the Liberal Government’s record of mishandling our future submarine program doesn’t continue. The acquisition of this new defence capability must be done on time, on budget and, as much as possible, using our Australian defence industry and developing our sovereign capabilities.

LABOR’S PLANS

Expanding this capability will be supported by Labor’s National Reconstruction Fund, which will provide up to $15bn of capital to invest in job-creating projects through loans, equity and guarantees. This will support and grow Australia’s sovereign capability as well as research and development for the future.

Labor’s plans are not just about ensuring that a proportion of money spent is classified as ‘Australian’. Rather, it is about ensuring that the use of Australian industry results in growing sovereign capabilities across planning, research, development, design, and engineering, as well as manufacture and integration. That means backing organisations that are Australian-owned and controlled, generating local IP and doing the work here. Australia has the ability, capability and know-how, but it’s up to federal government to ensure this is developed in our national interest. 

INCREASING WA’S PROMINENCE

Western Australia has always been pivotal to our nation’s naval defence, and the proposed Defence force posture review by an incoming Labor Government could increase the state’s prominence in other domains too.

From our strategic position on the western frontline of Australia’s defence – the ‘Indo’ side of the Indo-Pacific – to WA’s billion dollar shipbuilding industry, to our resources sector that keeps our economy moving, and the minerals critical to sovereign supply chains, WA will be of great importance to the review of Australia’s Defence posture. It is incumbent on decision-makers to support our WA defence industry specifically, and the national industry more broadly. Only Labor has a plan to make that a reality.

 

This piece was originally published in the 2021-22 WA Defence Review