SPEECH TO THE DEFENCE CONNECT BUDGET LUNCH 2021

By Matt Keogh MP

14 May 2021

*** CHECK AGAINST DELIVERY ***

 
Thank you Liam, and thank you all for having me here today.
 
I would like to also acknowledge the traditional owners of the land on which we meet and pay my respects to their elders, past and present.
 
We are a country that punches well above our weight in so many things.

We traditionally finish in the top 5 in the Olympics, despite being so much smaller than our competition. 

In World War II we made the Boomerang fighter aircraft and just now it is Australia that is leading the world in autonomous aircraft with the Loyal Wingman.

So why is it that we so are doubtful about the potential of our defence industry and our own capability? 

We are competitive with other nations on so many things but we as a nation don’t back ourselves in our defence industry.

The Australian Defence Force is a fantastic customer of the global defence industry supply chain.

But why can’t we – Australia - be their primary supplier instead?

In my discussions with defence industry, I’m told the same thing time, and time again – you look for export tenders and contracts overseas in order to be deemed “legitimate” by our own Department of Defence.

At the same time, you are fighting for those overseas contracts with one hand tied behind your back when you can’t point to contracts with our own ADF.

We need a paradigm shift. 

We need our Government and Department of Defence to back our Australian defence industry businesses as a necessary and important strategic capability, indeed Australian defence industry should be seen as a core defence capability domain, right up there with AIR, LAND, SEA, SPACE AND CYBER, because without the INDUSTRY domain, none of the others work, and certainly not for very long.

It’s not enough to put out an RFT and let international prime companies get away with “best endeavours” Australian Industry Plans, only to later advise that Australian companies don’t have the capacity or capability to undertake specific work, then favouring their existing, often international, supply chain. 
 
COVID-19 has highlighted global supply chain vulnerabilities.

Why would we expect this to be any different for defence materiel in a conflict situation?

We need to identify the gaps in industry here in Australia and fill them; it’s in our sovereign interest to do so. 

Indeed, given the increasing khaki hue being given to the upcoming Federal Election by some in Government, one really must ask is the Government not aware of how exposed it is leaving Australia in its failure to properly support defence industry here.

While the Government may do some things around the edges, given the rhetoric in all its glossy documents and heard here today, there is a clear failure to deliver on intent.
 
A Labor Government will invest in Australian industry and our workforce. Labor will create ‘Jobs & Skills Australia’ to advise on the future work opportunities, such a defence industry, and to ensure that Australians can benefit from them.

Labor Leader Anthony Albanese has also recently announced our National Reconstruction Fund, to transform existing industries and develop the industries of tomorrow; partnering with the private sector, including superannuation funds, to revive our ability to make things here in Australia and be more self-reliant. 

The aim of which is simple – providing financial support to projects that will help improve our nation’s sovereign capabilities. 

Building and developing things here in Australia should be our priority.

If we don’t have required capabilities here, we must nurture and build those capabilities strategically. 

It is incumbent on Government that the gaps in our supply chains are identified and filled.

This Fund is the mechanism to pay for that nurturing, whether through low cost loans or even equity investment, because why shouldn’t our nation be invested in the prosperity and security of our nation.

The NRF will also allow us to develop and foster our current mid-tier defence industry businesses from which we can grow indigenous prime defence contractors.

Similarly, we should be using Australian shipbuilders in all future shipbuilding programs – not just providing shipbuilding labour, but also in the design, engineering, drafting and integration work.

We mine and produce every element needed to build a lithium battery, the power storage technology of the future. We should not miss out on jobs and investment by sending those materials overseas for another country to manufacture and then export them back once value has been added.

A Labor government will create a new energy apprenticeships program to train 10,000 young people for the energy jobs of the future, including renewables manufacturing like batteries, which can have significant benefits for our ADF given how reliant modern warfare is on foreign sourced batteries.
 
Ultimately, this means continually investing in the development of our industry and our overall capability here at home. 

As I outlined at this event last year, Labor has already committed to implementing concrete rules to maximise local content and create local jobs in Defence acquisition and sustainment.

This means negotiating appropriate, specific, enforceable and audited AIC commitments into the contractual arrangements for all major defence materiel procurements and local defence contracts. The disclosure of these commitments must be public and transparent.

It is up to the Federal Government to implement contractual requirements that compel defence primes to do the work here in Australia, and to work with local companies now to put in place the mechanism to grow our Australian defence industry from SMEs to primes. 
 
Requiring average minimum levels that are only met at the end of a project with no transparency is not good enough.

Australian companies need to be factored into the defence project supply chain from the very beginning of a project and continue that through the life of the platform.

We need to think of local defence industry as the sixth domain, partnering with and enabling the other five.
 
The Defence Strategic Update noted that the decade lead time to prepare for major conflict has now evaporated, yet the lead times on necessary platforms and capability to sustain them remains. 

This inconsistency and the risks posed for our nation fall at the feet of the Government and must be dealt with properly and expeditiously, that is the approach a Labor Government will take.
 
Labor is committed to building and developing Australia’s sovereign capability, local manufacturing, local jobs and protecting Australia from supply chain disruption, to ensure the best for our ADF, and the health, security and prosperity of our nation.

Because Labor is on your side.

ENDS