Opinion Piece - We need to stand up our defence industry on its own two feet

By Matt Keogh MP

06 July 2021

The geopolitical situation Australia now confronts is vastly different to that of just 5 years ago.

The Strategic Update acknowledges we no longer have the 10-year lead time previously expected before an outbreak in conflict. We keep hearing the rhetoric of “drums of war” beating, and of escalating tensions.

This rhetoric is being scaled up – but the same can’t be said for standing up our defence industry.

In the recent Senate Estimates we heard that the Federal Government are considering a confidential “Plan b” option for the Future Submarine program.

While unwilling to share just what that option might be – the shrouding of the comment in confidentiality and the veil of national security confirms one thing – the government are looking at one, and clearly have concerns about the current program.

Under the current timelines there won’t be a single submarine from the future submarine program in the water until 2035.

Meanwhile, it’s expected there will be as many as 300 foreign submarines in our region by that same year.

There’s also still been no decision about the scope or timing of life of type extension required for our current Collins Class submarines.

And this is just one of many capabilities experiencing delays and cost overruns. Australia is looking like it will be unprepared and outnumbered.

At the same time, this Government simply hasn’t lived up to its rhetoric of growing Australia’s sovereign defence industry capabilities, despite evidence of how vulnerable we are to supply chain shocks, demonstrated by the COVID-19 pandemic.

How can we assume we won’t have the same issues if we found ourselves in conflict with a peer?

The Morrison Government tries to talk tough on Defence but failing in its delivery of the necessary sovereign capability that Australia needs to support the work of Defence.

We need to stand up our defence industry on its own two feet.

Recently, I attended the Land Forces exposition in Brisbane, a three-day event showcasing the best of Australian land capability.

There are so many fantastic small and medium sized companies here in Australia doing exceptionally innovative work.

But I kept hearing the same comments time and time again: futuristic and innovative capabilities being developed locally with the support of the US or UK Defence forces, who recognise the advantage they can give, but are hardly getting a look in from our ADF and Defence Department.

And when they do cut through, it’s after jumping through hoop, after hoop. There is no clarity or sufficient support for prospective Defence industry businesses to find the right people to talk to about progressing and supplying their capability.

How on earth is it reasonable or appropriate for the Department of Defence to NOT support our local industry or for primes taking on Australian defence work to not be contractually obligated in a transparent way to support Australian Industry in any (and every) way they can?

“Best intentions” clauses are nothing more than lip service.

I can’t tell you the number of conversations I had throughout the Land Forces event, hearing the same thing over and over - It’s so much easier to get into the international supply chain than it is to get work supporting our own forces here at home.

I spoke with one company who spent four years going through the tendering process for a major Australian defence project with a Prime, spending what they say was hundreds of thousands of dollars attending meetings, making submissions and developing a perfect product, only to be pipped at the post by a company from the same home country as the Prime with no rationale as to “why”.

I met another group of Australian SMEs who have worked together to develop a vehicle, with each company contributing to a specialised component to create something truly innovative. The British Defence Force are knocking down their door for the platform…. But the ADF are yet to show real interest.

We need to be backing in and scaling up our local industries to do local work, after all, COVID has proven that we can’t rely on other countries to do it for us.

At least it’s led to a burgeoning local consulting industry to support these businesses - but I don’t think that’s the sovereign capability we were really chasing in Defence!

It’s up to the Australian Department of Defence – the Australian Government, to take on the risk, to grow and support our defence industries here at home.

That means not just identifying our national strategic priorities from across defence but also understanding the existing industry eco system, identifying the gaps and working to get them filled locally, whether by supporting new capability or growing scale or variation in existing capability.

We must also ensure this isn’t siloed by domain but instead identifying priorities and gaps across our entire defence and national security interests and applying resources accordingly, rather than each force pursuing its own individual agendas.

We should have overarching strategic goals and ensure all elements of defence are collaborating to reduce a common threat.

You see there are two sides of this issue. We are developing technology that isn’t appropriate to current and expected future threats and we are lacking agility to bring in capabilities as rapidly as those threats evolve.  

What does that mean in practice?

The Government should be investing in companies in the early stages so they’re developing the right capabilities, that will have a real-world use, a trajectory towards commercialisation and most significantly, contribute to our strategic imperative in response to threats. These must also be joined up to capability requirements with real potential procurement opportunities, not just left dangling after a grant expires with nowhere to go.

If gaps are identified and we don’t have those capabilities, it’s incumbent on Government to work with industry to grow and develop those.

Land Forces proves we have the ability and capability, the will and the human know-how.

Our Government needs to support our Australian defence industry businesses to grow and thrive, in our national interest.

This opinion piece was first published in The Australian Industry & Defence Network (AIDN) National Quarterly Newsletter on Tuesday 6 July, 2021.