As we remain in complex geopolitical circumstances, circumstances that many believe we have not seen the likes of since the 1930s, the need for a robust, sovereign and indigenous industrial base has become a mandatory requirement to achieve a high level of national strategic resilience.
Association Comment – Brent Clark, CEO, Australian Industry & Defence Network
The ongoing illegal invasion of Ukraine, the worsening situation in both the Gaza and elsewhere in the middle east combined with an ever-increasing forceful presence of China and the ever-present issues surrounding North Korea and negative influence of Iran all combine to place us all in a precarious position.
As the Western nations and allies work together to try and resolve these issues in a peaceful manner, the simple reality remains that the world is not a safe place, and tensions will not simply dissipate overnight.
Our global supply chains are heavily stressed, and in many cases, still have not recovered post the COVID pandemic, in some areas, whilst not at a breaking point, they are struggling to maintain the ability to meet the supply demand.
If our strategic circumstances were to further diminish or worse still, the world was to enter a more encompassing conflict there would be the real possibility that the global supply chains would not cope.
Combined with these circumstances the current Australian Government has undertaken a significant pivot of what the ADF will be doing into the future. Nuclear Submarines whilst the largest single investment Australia will make are not the only aspect of what Government is striving to achieve.
The AUKUS arrangement will define Australia and Australia’s direction in a way not seen before. What is clear is that we are seeing a fundamental shift for Australia’s Defence Industry. Some businesses may find that unless they adapt or diversify, they may not be part of the Defence Industrial ecosystem into the future.
Whist the development of this concept is of huge significance, it is vital that Australia’s indigenous defence industrial base is nurtured and invested in. Australia must be a contributor to the world’s global supply chain, Australia as a country cannot simply be a drain or be seen as an export opportunity for multinational companies.
Australia has a sophisticated industrial base covering a broad range of sectors, mining and agriculture, rail, infrastructure, medical and manufacturing. An often-overlooked category is that of Defence Industry.
The Defence industrial sector comprises hundreds of companies, ranging from the large multinational defence primes to the small micro businesses provide boutique services.
All of these entities form the defence industrial ecosystem, and all of these enterprises contribute to the overall strength of the country.
Without strong oversight and investment by the Australian Government we run the risk that we miss the opportunity to this net contributor.
There are many arguments as to why the effort must be made to develop our indigenous sovereign capability. Clearly there is an economic benefit to Australia, there is of course the return on investment argument for the Australian taxpayer, however, the need for national resilience and the ability to resupply and provide maintenance for the ADF must now be considered strategic requirements.
Without a broad base manufacturing industry, Australia would struggle in times of global conflict and increased demands on a supply chain to ensure that the ADF is able to maintain the ability to contribute to a either a broad coalition of forces or indeed operating as an independent entity.
The need to include the Australian Industrial base into both global supply and production calculations is a fundamentally important element of any response the Western Allies may choose to undertake.
If Australian Industry is not incorporated into the planning for all Defence activities, we will simply place the fortunes of Australia into the hands of foreign governments and foreign multinational companies. Who will in a conflict environment be fully engaged in the re-supply of their own defence forces, leaving Australia to sit in a queue waiting to be resupplied.
The benefits of secondary manufacturing capabilities cannot be overstated. Australia has the capability and competence to undertake these activities. For example, if we were to establish Australia as a secondary manufacture of ballistic missiles we could actively assist in the resupply of expended munitions, this would give an alliance a significant advantage.
Australia is a first world country a country with cutting edge technology and industry, and yet Australia is the only first world country without an Australian owned Prime Contractor in the Defence space. Our other industrial sectors do have such companies, the question must be asked why not in the Defence sector?
This is not to say that the foreign owned multinational companies do not have a significant role to play in the defence of Australia, they are an important component of the defence ecosystem.
What they shouldn’t be is the driving force in that ecosystem.
For Australia to simply hand over the responsibility of the defence industrial base to overseas countries and therefore overseas governments is a position that we as a nation should reject.
The need for a sovereign industrial base is a fundamental pillar for the defence, security and therefore safety of the nation.
The ability to transfer the required intellectual property, technical information, technical knowledge and technical know-how needs to be a fundamental requirement to transition capability to Australia.
By upskilling both Australia’s industrial base and workforce then Australia becomes a vital link in the overall Western Alliance.
The simple solution is to state that the foreign owned companies are Australian because they employ Australians and have a presence in-country. However, this is a naive approach, the need for Australian owned or controlled companies, must be the standard we demand for our security.
The ability for the Australian Government, in times of conflict, to be able to in effect nationalise an Australian Industry base to achieve an outcome that is in the best interests of Australia becomes a key component in the self defence of the nation.
A strong, modern manufacturing base equally becomes a mandatory element in the defence of Australia.
