Consideration in Detail - Australian Defence Industry Capability

By Matt Keogh MP

10 November 2020

This government is AWOL on developing and supporting Australian industry capability through its major defence projects. They've completely torpedoed our Australian industry overall. This government has failed to implement, or indeed articulate, strong, measurable, enforceable Australian industry capability requirements in its major defence project contracts. The more the Australian government supports our defence industry the better that industry can grow its export markets, its support for our Defence Force, and the better off our Defence Force is.

So far there has been a lack of enforceability of any contractual requirements imposed on prime defence contractors and suppliers to ensure that they meet their Australian industry capability planned commitments, nor has there been any real effort to ensure that this work actually contributes to the development of our sovereign defence industry capability. It's up to the federal government to implement contractual requirements that compel defence primes to do the work here in Australia, to work with our local companies, to do it now, to build our smaller businesses in defence into being medium-sized businesses, to help support those medium-sized businesses to become Australian primes. The lack of such requirements is significantly impacting on our local industry. I just came from a video conference with local industry this afternoon about these very issues. All of this is at a time when local jobs are desperately needed. We are denying our nation capability development that we dearly need.

It's not good enough to see these contracts continually sent offshore to offshore suppliers already engaged by primes, without local consideration of local companies, or where it's just a fig leaf—companies are spoken to, but never given the actual contracts. When this government does bow to pressure though, to say that it will implement specific requirements, we find that it starts counting French language classes, security guards, travel agents as part of its Australian industry capability requirement. That's not a capability. What happened to spending that money on locally produced batteries, on making sure that the switchboards are being made here in Australia? No, we're not seeing that from this government. We need a plan from this government, not just another press release.

Strategically it makes sense for defence build, sustainment, maintenance and repair work to be occurring here in Australia for our Defence Force, and to do that as much as possible, as well as to support our friends and allies here in Australia that're operating in our region. But this government is still on light duties. They're claiming that they're working on it, that they're getting the job done. This mob have been in government for seven years.

We have the skills here in Australia. We have a willing labour force. We've got the facilities to create an Australian defence industry and develop greater sovereign capability, but this subpar government is failing to deliver. They are about as useful as a screen door on a submarine. They're happy with a headline but it's without any delivery. Australian businesses must be factored in to defence projects' supply chains from the very beginning—in the design phase. The longer we let this go on the more at risk Australian businesses, jobs and skills become, which are all fundamental to supporting our Defence Force and our national interest.

Why won't this government follow Labor's lead and implement measurable, enforceable, audited and transparent Australian industry capability requirements in all of its major defence project contracts?