Speech - Australian Strategic Policy Institute

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Senator the Hon Linda Reynolds CSC

Minister for Defence

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Nicky Hamer (Minister Reynolds’ Office): +61 437 989 927

Defence Media: media@defence.gov.au

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2 July 2020

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Good afternoon everyone and thank you very much Peter for your introduction. I acknowledge the Ngunnawal People, the Traditional Owners of this land, and I pay my respects to their Elders, past and present. And also as Minister for Defence, I also pay my respects to Aboriginal and Torres Strait Islander men and women, who have served our nation with so much distinction in times of peace and in war.

I sincerely thank Peter Jennings, the Executive Director of ASPI, for hosting this event here today. Peter and his team are critically important contributors to our national defence and also to our security dialogue. So Peter, thank you very much.

I also welcome my very good friend and my colleague the Hon Melissa Price, MP, the Minister for Defence Industry. Melissa, as all of you here know, is an incredibly passionate and highly effective advocate for Australia’s defence industry. And to the Secretary of Defence, Greg Moriarty, and the Chief of the Defence Force, General Angus Campbell, I thank you both, most sincerely, for your leadership and also for the outstanding body of work your men and women have done on this package of material.

To all distinguished guests joining us here at ASPI, and those viewing on-line here today, welcome and thank you for participating in this dialogue.

Ladies and gentlemen,

The Australian Defence Force of today, is a highly professional and sophisticated force operating globally. It is also a force that continues to evolve, as the world transforms and as our nations outlook and also our priorities change. Today, Australia’s strategic environment is complex, is increasingly contested and is also changing rapidly. Major power competition, militarisation, disruptive technological change and new threats – are all making our region less safe.

The 2016 Defence White Paper identified these trends and the profound consequences for Australia’s economic and also our strategic interests. And it also pointed to the risks to Australia’s national interests – where other countries seek to advantage their own interests – outside the established rules-based order.

An order that has been fundamental to regional stability – and also has underwritten Australia’s remarkable economic success.

In 2016, the White Paper flagged a $195 billion investment in new defence capabilities – over a decade. This is to ensure that Australia is best positioned in the long term – to respond to these threats and also these trends. 

The Integrated Investment Program that accompanied the White Paper, and also the First Principles Review that followed it, were – and also remain – the enablers of Defence’s long-term investment strategies. These strategies are building generational Defence capability – underpinning a far more potent ADF – and an increasingly capable and also an increasingly vibrant sovereign Australian defence industry.

The White Paper was also very clear – that we needed to: maintain our capability edge, adapt to rapidly changing strategic circumstances, and also we needed to prepare for the complex and high-tech conflicts of the future. 

Ladies and gentlemen, that future is now.

And the Government and Defence must respond.

That’s why last year, the Department of Defence commenced a review of the strategic underpinnings of the Defence White Paper. This review found that our security environment had deteriorated – far more rapidly – and in ways we could not have predicted – just four years ago. Our region is now facing the most consequential strategic realignment since the end of World War Two. Historically, Defence planning had assumed a decade-long warning period for any major conventional attack against Australia. 

This is no longer valid.

Defence thinking, strategy and planning have accordingly shifted gears. Right across the Indo-Pacific, countries are modernising their militaries and also increasing their preparedness for conflict. Nations in our region now have advanced capabilities – such as submarines, next generation air combat, and highly capable land forces. New weapons and technologies – including hypersonic glide and long-range missiles, autonomous systems, space capabilities, AI and cyber. These have increased the range, the speed, the precision and the lethality.

Quite simply, they are transforming the characteristics of warfare.

Nations are increasingly employing coercive tactics that fall below the threshold of armed conflict. Cyber-attacks, foreign interference and economic pressure seek to exploit the grey area between peace and war. In the grey zone, when the screws are tightened: influence becomes interference, economic co-operation becomes coercion, and investment becomes entrapment.

Transnational threats also remain. Terrorism, violent extremism, organised crime and people smuggling. The COVID-19 pandemic is still very much an active and a very unpredictable threat. One that is dramatically altering the global economic and also the global strategic landscape. All of these pressures are contributing to uncertainty and tension, raising the risk of military confrontation, and also compromising free and open trade. 

Australia must be prepared for all of these strategic challenges.

On my appointment as Minister for Defence, I set three priorities for the defence portfolio – the first was strategy, the second was capability and the third was reform. These are the pillars that underpin Defence’s purpose and that will steer its success. The 2020 Defence Strategic Update and the 2020 Force Structure Plan released yesterday – address the first two of these priorities. Strategy and capability. In relation to the third – reform – I’ll simply say today that Defence must continue to adapt to meet Australia’s changing strategic environment.

Keeping in constant alignment its strategy, its capability and its resources. We must become more accountable and more financially transparent. Work to build on the First Principles Review is underway within the Department. I will be making further announcements on the direction of that third package of work later this year.

The 2020 Defence Strategic Update is a very timely and detailed response to the demands of our constantly evolving defence environment. The companion 2020 Force Structure Plan articulates what this will look like over the coming decade, and, most importantly what it will cost. Together, these two documents signal and substantiate Australia’s resolve to pursue three new Defence objectives.

To shape, to deter and to respond. Firstly, to shape our strategic environment. Secondly, to deter actions against Australia’s interests. And thirdly, to respond with credible military force – when we require it.

Our updated strategy – prioritises Defence’s engagement in our region, the Indo-Pacific. This is where shaping is key. It is where we work even closer with our regional friends to ensure a stable, prosperous and rules-based region. One in which the sovereignty of all states, large and small, is respected.

Over many years, I have personally been extensively involved in regional engagement efforts, particularly in democracy strengthening. Australia has an important role to play in shaping our strategic environment. This is unequivocally in Australia’s national interest. I want to make this important point.

We must recognise and work in the knowledge that the US–China strategic relationship – the most consequential bilateral relationship in our region – and in fact the world – is increasingly characterised by competition.

Australia has watched closely – as China has actively sought greater influence in the Indo-Pacific. We have supported China where that pursuit advances mutual interests in security, in prosperity and in stability.

And where such actions have unsettled the stability of our region we have joined with others in clearly expressing our concerns. We have always been consistent in raising concerns, concerns about developments that are inconsistent with international law or may undermine the sovereignty of nations. We do so from a very steadfast position – that our values are what define us as a nation.

Maintenance of them is simply not negotiable. A zero sum approach creates greater risk and it also diminishes our ability to focus on shared prosperity.

I want to be clear. Australia remains committed to the careful management of our relationship with China. We strive for a mutually respectful, beneficial and productive relationship. One that assures the advancement of both Australia’s security and also our economic interests. 

We want to work with both the United States and China – and with all other partners – to contribute to the stability and the prosperity of the entire Indo-Pacific.

Evidence of our commitment to the region can be seen through Australia’s longstanding partnership with ASEAN – and our unwavering support for ASEAN’s centrality. It is 46 years since Australia became ASEAN's first dialogue partner. Our South Pacific friendships and partnerships also continue to flourish.

Together, we are ensuring our region remains strategically secure, economically stable and politically sovereign. Our engagement is not defined through the narrow lens of strategic competition. We are continuing to strengthen cooperation with like-minded partners, including the United States Japan and India. The US continues to be a crucial force for stability and security in the Indo-Pacific.

As part of our updated strategy, the ADF will maintain the capability to deploy further afield. However, it will only be done after careful assessment – of both Australia’s regional interests and also the impact of deployments on our regional activities. For decades, Australians have seen – and we’ve admired – our servicemen and women supporting recovery efforts – in response to domestic and regional natural disasters.

Most recently, Defence has stepped up yet again to support the national response to the Black Summer bushfires and now the COVID-19 pandemic. In response, the Government is enhancing the capability of the ADF – to support both domestic and international disasters.

Let me be very clear – this must be done without degrading the ADF’s ability to deliver core military effects. So, with this context in mind, let me talk about our force structure. Australia is strengthening its cutting-edge defence force, which is already forward looking, decisive and regionally-focussed. It is a defence force underpinned by Australian sovereign capability. 

Government has directed Defence to sharpen its capabilities now across five domains – maritime, land, air, information and cyber, and also space.

I have addressed how Australia will continue to work closely with our regional partners to achieve our shaping objective. Our capacity to deter and also to respond will be sharpened in many new ways. The ADF’s weapons systems will be formidable. With more potent capabilities to deter – and further distance adversary forces – away from Australia.

In this context, I think it important to talk specifically about our acquisition of long-range strike weapons. Long range strike capabilities mean our forces are able to pose a threat to potential adversary forces and infrastructure – from greater distances. Possessing weapons of this type influences the decision making of those who seek to threaten our national interests. This Government’s commitment is demonstrated – with the decision announced yesterday to acquire the advanced maritime strike capability – the Long Range Anti-Ship Missile – or LRASM.

We are focused on the protection of our deployed forces from ballistic missile threats. Rather than – the protection of the Australian continent. This is in line with our current threat assessment. Turning now to each of the five domains, focusing on the key upfront investments.

Firstly our maritime capability. Australia is a maritime nation. Fundamental to our national security interests – is a stable, rules-based order. One that permits the free flow of goods and services. This maritime domain is becoming increasingly contested. A range of advanced technologies – from hypersonic missiles to modern submarines – are being rapidly deployed.

That’s why the White Paper initiated the largest expansion – and modernisation – of the Royal Australian Navy – since the Second World War. We now have an Australian continuous naval shipbuilding enterprise. As well as the infrastructure and workforce to support this. We have introduced new capabilities such as the Hobart Class Air Warfare Destroyer and the LHD’s. And we are in the process of designing and constructing future Naval assets important to our deterrence capabilities. This includes the Hunter Class anti-submarine warfare frigates and also the Attack Class Submarines.

Submarines are fundamentally important to our defence strategy. They are a unique – and powerful deterrent to any adversary, and they are critical to protecting our national security interests. Submarines secure Australia’s strategic advantage – through leading-edge surveillance and the protection of our maritime approaches. Our sophisticated level of interoperability with the United States – is a critical aspect of our submarine operations in our region. As are our Air Warfare Destroyers and also anti-submarine warfare frigates. Submarines are also the vanguard of strategic lethality and deterrence. With substantial firepower, with stealth, with endurance and also with sustained presence. 

Our regionally-superior Collins class submarines are already very capably demonstrating all of these effects. We will see further refinements to our future Attack class submarines. Ones that will strengthen our capability to maintain peace and security in our region.

Our submarine capability – underpins Australia’s credibility and influence as a modern military power. And let me make that statement again: Our submarine capability – underpins Australia’s credibility and influence as a modern military power.

This is not about politics. This is not about partisanship.

This is about the security and the future of our nation. The 2020 Force Structure Plan will deliver and enhance our maritime capability even further. With a total planned capability investment of $75 billion over the next decade. 23 different classes of Navy and Army maritime vessels are planed.

In relation to land. The Government will invest 55 billion dollars over the next decade in capabilities to sharpen Army’s lethality. We will also provide our land forces with enhanced mobility, speed, firepower, protection and also situational awareness.

Purchases such as: long-range rocket systems, enhanced missile systems, and upgrades to the protection, the weaponry and the communication systems of our existing vehicle fleets – like the Bushmaster and Hawkei. 

We will also leverage robotics, automation and AI to enhance our systems. This is to ensure the ADF can respond to a wider range of regional demands. To achieve that end, we will acquire capabilities, such as new large landing craft, inshore patrol craft and also un-crewed ground vehicles. These investments will enhance the capability of our land forces to conduct multifaceted operations – whether in conflict, crisis or in cooperation.

Now for our air capability. The White Paper made the case for a potent and technologically advanced air combat and strike capability. A fifth-generation Air Force. We now have Joint Strike Fighter and Growler Electronic Attack aircraft in the sky. Through the FSP we will invest $65 billion over the next decade, so our air capabilities deliver potency – over even greater ranges.

We will also be expanding our air combat capability, with options that include: long-range strike weapons, teaming vehicles, loitering munitions, and remotely piloted, semi-autonomous and autonomous aircraft.

Our fleets of Growlers, C-130 transport aircraft and air-to-air refueling aircraft – will all be replaced at the end of their life. The Jindalee Operational Radar Network – will be expanded to better monitor Australia’s eastern approaches. And we will enhance our intelligence, surveillance and reconnaissance capabilities. These capabilities, and many others in the FSP – working together – will enable us to deter – and respond to – attacks against Australian interests.

And also – they will better enable us to support our neighbours when needed. I now turn to the new domain of Information and Cyber. In addition to the physical air, maritime and land domains, Defence is increasingly focused on its capabilities in the information and cyber grey zone. This new and broadening offensive is challenging our nation’s sovereignty. Among the greatest of these threats are cyber-attacks. With growing frequency, these attacks target all levels of Australian society. Government, industry, political organisations, education, health, essential service providers and operators of other critical infrastructure.

As I announced on Tuesday, the Government is enhancing the ability of Defence and the Australian Signals Directorate to conduct defensive and offensive cyber operations. This includes increasing the number of our cyber operatives. Over the next decade in this domain alone, the Government will invest 15 billion dollars:

  • to improve network security and resilience;
  • to integrate intelligence, surveillance and reconnaissance programs;
  • to bolster signals and information-sharing capabilities; and
  • to improve joint command, control and also communications systems.

 In cyber warfare, there are no frontlines. Given the blurred boundaries between military and civilian impacts in cyber space, this investment will support the Government’s broader national cyber security agenda, which will be released later this year.

Lastly, I turn to the new space domain. 

Space is increasingly critical to the ADF’s warfighting effectiveness. Particularly for real-time communications, situational awareness and rapid information delivery. Defence is working very closely with the United States, the Australian Space Agency and a wide range of industry participants – to advance its space capabilities. The Government will invest $7 billion over the next decade on space capabilities. To increase our self-reliance and resilience, we will put new satellites into orbit as part of a sovereign controlled network. And we will develop Defence’s satellite imagery, data processing and analysis capabilities while expanding our geospatial intelligence workforce.

To counter rapidly emerging space threats, we will invest in the Australian Defence Force’s space control capabilities such as space-based intelligence, surveillance and also reconnaissance.

So, Ladies and Gentlemen, how do we bring all of this to fruition?

Critical infrastructure and facilities – such as military bases, wharves, ports, airbases and training ranges, fuel and explosive ordnance infrastructure – are all vital to deliver this. Military operations cannot be conducted and sustained without them. Recognising this, the Government is investing up to $30 billion over the next decade to strengthen Defence’s estate and infrastructure portfolio.

Local industry involvement will be maximised through our Local Industry Capability Plan initiative. Since its announcement in August 2017, this initiative alone has seen Defence let over 75 per cent – 75 per cent – of sub-contractor work packages to local industry. Representing a $1 billion investment. Adjustments to the Defence workforce will also be crucial to delivering on our agenda.

Over the next four years, the Government will increase the number of full-time ADF personnel by 800. Australian Public Service staff numbers will increase by 200. A detailed and longer-term workforce growth proposal will be considered by Government in 2021. I want to emphasise also that the Government’s Defence objectives go hand-in-hand with Australia’s economic recovery and with creating Australian jobs.

As part of Defence’s forward agenda, Minister Price and I have prioritised Defence’s collaboration with Australian industry. And we do that to build a resilient and internationally competitive sovereign defence industrial base. The massive global disturbance caused by the COVID-19 pandemic has further highlighted the need for Australia to build stronger, more resilient and more assured supply chains. Defence’s industry policy will expand Australia’s sovereign capability to strengthen supply chains and also to improve the ADF’s agility.

Today, Defence directly employs 116,000 Australians in the Australian Defence Force and the Australian Public Service. If you take into account downstream and services suppliers, early analysis shows that Government investment in defence capabilities already benefits around 15,000 Australian companies, employing indirectly and directly 70,000 Australians.

And this is growing rapidly.

Through the Australian Industry Capability Program, ten Sovereign Industrial Capability Priorities have been identified. These will be developed or supported by Australian companies, and in turn – will support Australia’s sovereign industrial base. Critically important now, this means greater certainty for industry – jobs for Australians – and better – and more resilient capabilities for the ADF.

Our defence capabilities will be further enhanced by     targeted research. Research that brings together the distinct strengths of academia, of industry and publically-funded research agencies, to address some of our biggest strategic challenges.    Over the next decade, the Government has allocated $3 billion of capability investment funding for Defence innovation, science and technology. We will also increase investment in the Next Generation Technologies Fund and the Defence Innovation Hub. A Capability Acceleration Fund will also be established by the middle of this decade. An investment of $130 million to support the intensive development of disruptive technologies. The Government’s investment in Defence will continue to shore up our sovereign industrial capability and continue to grow jobs here in Australia.

So, where does this leave us fiscally?

We are maintaining our policy of long-term certainty for Defence funding that was first put in place in the White Paper. Defence – and increasingly Australian defence industry – rely on funding stability, especially during this very challenging period for our economy. Defence’s funding remains decoupled from GDP, avoiding the need to regularly adjust plans and purchases in response to GDP fluctuations. Total funding in capability investment over the next decade is now $270 billion. This compares to the $195 billion allocated in the White Paper. 

Let me assure you all that this expenditure has been rigorously cost-modelled. Government has been provided with affordable capability investment choices – which are all within Defence’s current investment profile. We will of course continue to keep under review – the ADF’s force structure, to respond to our evolving strategic environment. The Government will work closely with defence industry – on any decisions necessary to trade off or divest capabilities to achieve our changing national security requirements.

Today, I have outlined a significant investment made on behalf of the Australian people – in the defence and in the security of our nation. I am very mindful that I am a custodian of this investment. A key priority for me in my time as Minister has been greater transparency, greater clarity and greater consistency in expenditure numbers.

I again thank the Department for this considerable body of work – to make this transparency and clarity a reality in these documents. I say to you all – these are the numbers – you can hold me as the Minister, to account for. 

Ladies and gentlemen, in conclusion.

We are in an incredibly dynamic time in our history. We face a post-COVID-19 world that is more unstable, that is more dangerous, and that is more vulnerable to the impacts of technological and economic disruption. Shifts in power and pressure on rules, on norms and on institutions, are all endangering the global order as we knew it.

The objectives and investments I have outlined today strengthen the ability of the ADF to deter and to respond to threats to Australian interests. They reinforce Australia’s resolve to shape the security developments in our immediate region. And they sharpen the focus of Defence resources to achieve these ends.

The Government will continue to work to ensure that we are positioned to respond to the challenges of today and also of tomorrow.

Thank you very much.

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