USAsia Pacific Centre

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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

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6 July 2020

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Thank you very much Gordon for that wonderful introduction. Good morning. Firstly, can I say to Walter, thank you very much for that wonderful welcome to country, and I would like to acknowledge the Whadjuk people of the Noongar Nation, who are the traditional custodians of the land on which we meet, and I also pay my respects to their elders past and present.

As Minister for Defence, I also pay my respects to Aboriginal and Torres Strait Islander men and women, who have served our nation with such great distinction both in times of peace and in times of war. I thank them for their service.

Let me sincerely thank my very good friend Professor Gordon Flake, CEO of the Perth USAsia Centre. Thank you for giving me the opportunity to address you all here this morning.

There is a long list of acknowledgements but I would like to go through and acknowledge all of the very distinguished guests we have here today.

First of all is His Excellency, the Honorable Kim Beazley AC, Governor of Western Australia, who is one of the four ex Defence Ministers here in this room. I thank him for his enduring interest in defence matters – and also for being so kind to me on becoming Minister for Defence.

The Honorable Melissa Price, MP, Minister for Defence Industry, the two former Ministers’ for Defence, Professor Stephen Smith and also David Johnston. Welcome to you both.

Members of the diplomatic corps. Senior ADF representatives. Ms Rebecca Brown, Acting Director General of the WA Department of Premier and Cabinet. Current and former Parliamentary colleagues. Representatives of our great WA companies.

Distinguished academics from all WA universities. Finally, a very warm welcome to Professor Amit Chakma, the new Vice Chancellor of the University of Western Australia. And it’s his very first day on the job, so welcome to Western Australia.

As Gordon said, it is a return for me to the Perth USAsia Centre.

Gordon, you and your team make a globally significant contribution to regional research, scholarship, and also policy development. This is particularly so - with your laser-like focus on the ‘Indo’ part of the Indo-Pacific. This morning I want to talk about some issues that I know are on all our minds, especially given the very significant national defence announcements the Prime Minister and I made last week.

Issues that are central to: The Indian Ocean region; to Defence; and the great state of Western Australia. Which I know are shared passions amongst us all here today.

Let me be clear. This is not a new Defence White Paper. Rather, it is a clear-eyed assessment of our strategic environment and how the Australian Government is responding. In August last year here in Perth - at the Indo-Pacific Conference - I spoke about the significance of the Indo-Pacific, and also the Indian Ocean. I also foreshadowed emerging regional challenges. Today, I will revisit both in the context of the Defence Strategic Update, but with a particular focus on the Indian Ocean and also ASEAN.

The Indian Ocean region is politically diverse with an underdeveloped regional architecture. Australia has significant interests - and territories - in the Indian Ocean region, and an increasingly significant role to play. Our equities are clear and they are long-standing. Firstly, our Exclusive Economic Zone – with a total marine area of 10 million square kilometres – it extends deep into the Indian Ocean. This includes the strategically valuable territories of the Christmas and Cocos Keeling Islands. Secondly, the Indian Ocean is home to five of Australia’s top 15 trading partners: India, Indonesia, Malaysia, Singapore and Thailand; and Thirdly, 40 per cent of our nation’s goods exports - by value - depart from Western Australia.

Australia’s strategic environment – across all of our three oceans - is complex, is increasingly contested and is changing rapidly. It has changed more rapidly than anticipated in the 2016 Defence White Paper. Let me be quite blunt. The world we all grew up in is no more. Major power competition, militarisation, disruptive technological change and new threats - are all making our region less safe. Some countries are modernising their militaries and increasing their preparedness for conflict. Some 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. And the COVID-19 pandemic is still very much an active and unpredictable threat. One that is dramatically altering the global economic and strategic landscape. As the Prime Minister observed in his speech last Wednesday, he said this; “…we need to prepare for a post-COVID world that is poorer, that is more dangerous, and that is more disorderly.” All of these pressures are contributing to rising uncertainty and tension. The prospect of high-intensity conflict in the Indo-Pacific, while still unlikely, is less remote than in the past. We must adapt to these new challenges.

Ladies and gentlemen, challenges and threats are inherent to any nation’s security environment. Today, Australia faces challenges and threats - that are more fluid and nuanced and are rapidly evolving. At the same time, they are becoming more intense and more hostile. As I have said many times before, the very first priority of this Government – indeed of any Australian Government – is to protect the nation’s security, its sovereignty - and therefore its citizens. We must do this while upholding the values and the principles that define us as a nation, and as a people. These are the principles that underpin the 2020 Defence Strategic Update and the 2020 Force Structure Plan. I believe the Defence Strategic Update is a timely response to our evolving security environment. The companion Force Structure Plan outlines the capabilities Defence will acquire and also very clearly, the cost to Australian taxpayers.

Let me outline the three new objectives that underpin Australia’s resolve. They are: to shape, to deter, and to respond. Firstly, to shape our strategic environment; secondly, to deter action against Australia’s interests; and thirdly, to respond with credible military force - when required. Shaping our strategic environment means:

working with our friends, partners and allies to shape an Indo-Pacific where the rules-based order is respected and observed. It means championing the independence, resilience and sovereignty of all states - large and small. It means resolving disputes peacefully without coercion. It means cooperation and healthy competition – not confrontation and conflict. To achieve this – the Defence Cooperation Program will focus its attention on our immediate region – as part of the Whole-of-Government Pacific Step Up.

By this, I mean the area ranging from the north-eastern Indian Ocean, through maritime and mainland South East Asia, to Papua New Guinea and to the South West Pacific. In short - shaping is all about working with regional partners to preserve our shared values. Now I will turn to our objectives of deterring and responding.

The FSP details how Defence will sharpen its capabilities across five domains - maritime, land, air, information and cyber, and space. Over the next decade the government is investing $270 billion in defence capabilities. This locks in our long term funding commitments foreshadowed in the 2016 White Paper. Defence – and Australian defence industry – rely on funding stability, especially during this very challenging period for our nation’s economy. Defence’s funding remains decoupled from GDP, avoiding the need to regularly adjust plans and purchases in response to GDP fluctuations. 

We have committed to:  

  • $75 billion dollars in maritime;
  • $55 billion dollars in land;
  • $65 billion dollars in air
  • $15 billion dollars in information and cyber;
  • $7 billion dollars in space; and
  • $50 billion dollars in enterprise capabilities, infrastructure, and ICT.

These investments will deliver more potent capabilities to deter, and, if needed, to respond.  

The ADF’s ability to act with greater independence is inextricably linked to a sovereign, sustainable and secure Australian defence industry. I am proud to be part of a Government that unashamedly backs Australian companies and Australian workers to deliver sovereign defence industrial capability. This is absolutely critical to building our deterrent capabilities, and our ability to respond with credible force, when required.

Defence directly employs 116,000 Australians in the ADF and the Australian Public Service. This accounts for approximately 30 per cent of Defence’s annual budget.

But it is much bigger than that, much, muchbigger. Early analysis shows that around 15,000 Australian companies and some 70,000 workers across our economy are already benefitting from our investment - directly and indirectly. And this is growing rapidly. All States and Territories must contribute to this truly national endeavor. As a Western Australian, I am very proud that Western Australia is playing an increasingly important role, not just in our nation’s security, but also in the development of our sovereign industrial capability. We are an entrepreneurial and highly innovative state.

We understand capital, we understand mega-projects and we understand big infrastructure. We are true industrial pioneers -– dating back well before the first shipment of iron ore from Western Australia in 1966. We’re well experienced in engineering and high-end fabrication, and collaboration is long-standing practice for our industries and our wonderful universities. Our instinct and talent for innovation are demonstrated across adjacent and complementary industries right across our state.  Including resources, naval ship building, space situational awareness, autonomy, cyber security, AI systems, and drone technology. The list goes on and on. A stronger and more integrated Western Australian sovereign industrial and research industry is more important than ever for our nation. As a result, in Western Australia over the coming decade - there will be a $2.5 billion of investment to refresh and redevelop Defence facilities.

This includes at: Irwin Barracks, Defence Establishment Harold E Holt, RAAF Base Curtin, RAAF Base Pearce, RAAF Base Learmonth, Yampi Sound Training Area, HMAS Stirling and Campbell Barracks.

Local industry involvement in the delivery of these projects will be maximised through the Government’s Local Industry Capability Plan initiative. Under these Plans, Defence has already let 76 per cent of sub-contractor work packages to local industry. This increasingly ensures that local suppliers, contractors and tradies have the opportunity to secure more of this work. Which creates more jobs for local communities across Western Australia. And we are significantly strengthening the Australian Industry Capability Program. Today, large prime companies competing for major capability contracts must demonstrably and transparently maximise Australian industry involvement which is so brilliantly led by my colleague here, Melissa Price, who is doing an outstanding job in this area.

In the FSP the Government has committed $30 billion over the decade for new infrastructure and estate works right around the nation. We recognise that infrastructure is a core enabler for our enhanced deterrent and response capabilities. Our state is home to some of Australia’s most critical defence infrastructure including barracks, naval facilities and air force bases.  And that is set to increase. Today, half of our major Navy fleet units - are based in WA. And HMAS Stirling is the homeport for:

  • six ANZAC Class frigates;
  • a replenishment ship;
  • Australian Defence Vessel Ocean Protector;
  • all six of our Collins-class submarines;
  • embarked helicopter detachments; and
  • Clearance Diving Team Four.

Stirling also accommodates 3600 Defence and civilian personnel. At Henderson WA continues to be a major naval sustainment centre. There, defence undertakes significant maintenance and upgrades to our warships and submarines. WA also plays a critical role in the National Naval Shipbuilding Enterprise - as one of our two major national shipbuilding centres. WA will build at least 40 of the 70 Australian-built naval vessels recently announced in the Force Structure Plan. For example:  

ASC currently sustains the Collins class submarines, BAE provides engineering support and maintenance for the Anzac class frigates; Luerssen and CIVMEC are building 10 Arafura Class Offshore Patrol Vessels; Austal are building 21 Pacific Patrol Vessels and six enhanced Cape Class Patrol Boats; and our commitment to spend $1.5 billion for naval infrastructure and upgrades at HMAS Stirling and Henderson are proceeding well..

HMAS Stirling’s strategic location in our region is fostering relationship building with our friends and also with our neighbours. We have also invested $97 million for the Space Surveillance Telescope in Exmouth, which was completed in May. Looking North West, the Cocos Keeling Islands are set to benefit from an upgrade and refurbishment of the runway. This will enhance our maritime domain awareness in the Indian Ocean region. This $184 dollar project will prioritise local suppliers and create new local employment opportunities. The upgrade will support the P-8A Poseidon Maritime Surveillance and Response aircraft.

Turning to critical minerals. As many of you know, as a WA Senator, I have championed the sovereign supply of critical minerals and rare earth elements. In 2018 I led the first critical minerals delegation to Canberra to raise domestic -and global -awareness on the strategic importance of the industry. That passion and commitment continues now as Minister for Defence - in recognition of its importance to our military and to our modern economy. As a technologically superior force, the ADF remains at the competitive frontier by continually exploiting sophisticated technologies. Among these are platforms incorporating sensors and components that require critical minerals and also rare earths. For example, each F-35 Joint Strike Fighter includes 417 kilograms of rare earths. Each and every one of them. Here in Australia, we have significant geological reserves of critical minerals and rare earth elements, and we are well placed to capitalise on rising global demand. But there is still significant concentration of supply chains in this sector and in the capital that funds and prioritises off-take agreements. Australia is very well placed to step further into this market, and bolster global supply chain security. We are working with partners to address this, including with the United States; and through the multi-country Energy Resource Governance Initiative. 

Ladies and gentlemen, working with our allies and partners is key to shaping our strategic environment. We are strengthening cooperation with like-minded partners. Our Alliance with the United States remains at the core of Australia’s defence and security planning. Our Alliance is based - not only on the values we uphold and the interests we share - but on the high and unique degree of interoperability and collaboration we enjoy. As we deepen our Alliance cooperation, our focus remains squarely on the Indo-Pacific. Indeed, the United States has made clear the significant priority it places on the Indo-Pacific. As I said last week, the United States presence in our region has been the bedrock of regional peace and prosperity for decades. And it will continue to be so. I am very much looking forward to progressing defence cooperation at the annual Australia-United States Ministerial Consultations —AUSMIN — which will be held later this year. The Government also remains committed to working with the United States, India and Japan under the Quad.

Now looking further West from here, as we do here so well, looking West to India. Something we have done for decades in the West – with great admiration. India is the world’s largest democracy, and is critical to the strategic balance of power in the Indo-Pacific. Trade with India is important to many regional economies, including our own. We share so much with India: our Commonwealth history, democracy, trade, and of course the large Indian community here in Western Australia and across Australia.

On the 4th of June, Prime Minister Morrison and Indian Prime Minister Modi announced the historic elevation of the India-Australia relationship to a Comprehensive Strategic Partnership. As part of the CSP, two landmark Defence arrangements were agreed. Under the first, the Mutual Logistics Support Arrangement, our two countries will enhance military interoperability, cooperative engagement, and responsiveness to regional humanitarian disasters. The second, the Science and Technology Arrangement will see greater collaboration between our respective defence sectors and also our research organisations. We also agreed to enhance the complexity of our military exercises and engagements. These commitments further evidence that our defence relationship with India is at an historic high. With our defence activities together quadrupling between 2014 and 2019.

Through major exercises - including AUSINDEX - our navies will focus on complex anti-submarine warfare and interoperability - to address future threats in our shared region. More than half of Australia’s global trade - including oil - crosses the Indian Ocean. Exercises like AUSINDEX should give Australians confidence that Australia and India share a commitment to maintain freedom of navigation - and the protection of critical trade routes. The announcement of the CSP also saw Australia and India sign a Memorandum of Understanding on critical minerals. Australia has the geological potential to supply 20 of the 27 critical minerals important for India’s economy. This arrangement with India will benefit Western Australia, particularly in terms of exploration, scientific cooperation, extraction and production, and also new export opportunities. 

Importantly, it will broaden our relationship with India.

Australia is also committed to deepening its defence partnership with our strategic partner and close friend Indonesia, including in the Indian Ocean. During his visit to Australia in February this year, Indonesian President Joko Widodo said this: “Australia is Indonesia's closest friend… Indonesia and Australia must become the anchors for cooperation in the Indo-Pacific region.” We are great friends, represented by our Comprehensive Strategic Partnership and our new bilateral free trade agreement - which I am pleased to note officially entered into force yesterday.

Australia and Indonesia are natural partners in the Indian Ocean. We share a long maritime boundary, strong economic ties and very strong people-to-people links. Australia and Indonesia’s strategic outlooks are converging as we both seek to navigate our contested regional environment. Australia is committed to deepening its defence partnerships with both India and Indonesia - including now by exploring trilateral cooperation such as joint maritime exercises. I speak regularly with Minister Prabowo, and Foreign Minister Payne and I formally met with our counterparts in December of last year. We discussed our shared interest in an Indo-Pacific region, one that we believe should be open, inclusive and also prosperous. One where countries adhere to international law and agree to the rules and norms. Our CSP provides a framework to deepen existing military cooperation. We are enhancing maritime information-sharing. Together, we are committed to maintaining peace, security, stability and freedom of navigation and overflight in the region.

The ADF and the Indonesian National Armed Forces now participate in 20 military exercises annually. For example, during Exercise NEW HORIZON in 2019, our navies undertook maritime security scenarios, search and rescue activities, and also practised tactical manoeuvring.

I am pleased to have stepped up Australia’s engagement with NATO. Last month I became the first Australian Defence Minister to attend a non-operational NATO Defence Ministers’ Meeting. We discussed our respective national responses to the COVID-19 pandemic and the geopolitical challenges it has presented. I very much look forward to further cooperation with NATO. France and the United Kingdom also have interests in the Indian Ocean. In 2018, Australia and France agreed a vision statement for the bilateral relationship. This includes commitments to strengthen Indian Ocean regional architecture, and to cooperate more closely to bolster regional maritime security. In May, during our Quarterly Defence Ministerial meeting, French Defence Minister Parly and I reaffirmed our respective countries’ commitment to our strategic defence partnership.

Of course we have close and enduring ties with the United Kingdom - one of the world’s great maritime powers. Under its “Global Britain” strategy, the UK is taking a greater strategic interest in our region - and is growing its presence in Southeast Asia and in the Pacific. I recently convened a meeting of Five Eyes Defence Ministers. We discussed opportunities to further strengthen our partnership, how we can work together to build resilience, and how we can work together to address the challenges of our increasingly complex geostrategic environment. We agreed to meet regularly to continue these productive discussions and also outcomes.

Ladies and Gentlemen - In conclusion.

As Australians, we have not changed as a people. But our world and our region has. We must adapt to these new realities. It is my job as Defence Minister to see the world clearly — as it really is —not as we would still wish it to be. Our values are not negotiable. As a nation we must do more of our own heavy lifting. The fact the world is changing is not a cause for panic. But it does call for a clear eyed assessment of how we shape the future of our nation — and of our region. We must preserve the region’s stability and the values that define us, that make us who we are as a people. And now our work begins to implement these changes.

Gordon I thank you again, and also the Perth USAsia Centre and the University of Western Australia for having me here today. It is meetings and conversations like this that help us prepare for our changing world. I look forward to continuing this conversation with you. But before we do - I have some very special news about the University of Western Australia. Friends, for those of you who do not know, last November, UWA applied to the Department of Defence for a Strategic Policy Grant. Recognising the increasing strategic importance of Western Australia, the University wanted to create a Defence and Security Program. The program is designed to leverage untapped local expertise and perspectives on issues such as the defence industry, maritime security and also the Indian Ocean. So it is only fitting that I end this speech about the Indian Ocean region with the announcement that UWA was, in fact, successful and the Department has agreed to assist fund the program.

And I am delighted to announce that Professor Peter Dean will be the inaugural director of the program. I congratulate everyone at UWA who has contributed to this very forward thinking and incredibly important new study program, not just for our state but also for our nation.

And I warmly congratulate Professor Dean.

Thank you.


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