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The Hon Pat Conroy MP
Minister for Defence Industry
1 September 2022
I begin by acknowledging the traditional owners of the land, the Awabakal and Worimi people, and pay my respects to their elders, past, present and emerging.
My Federal colleague, Meryl Swanson MP, Member for Paterson;
The Honourable Alister Henskens MP, New South Wales Minister for Science, Innovation and Technology;
Serving and former members of the Australian Defence Force;
Distinguished guests; including the former member for Hunter, Mr Joel Fitzgibbon;
Ladies and Gentlemen.
I’d like to thank Tim Owen for the invitation to join you this evening.
People like Tim, and organisations like Hunter Defence, play a vital role:
- In promoting regional defence industry capability …
- Helping local businesses to make the most of the coming opportunities …
- And building the wider economic capacity of our region.
This is my first major speech to industry since the election of the Albanese Government, and my appointment as Minister for Defence Industry.
I am very pleased to speaking to you here at home in the Hunter.
- the steel that was vital in World War Two
- to components of the Collins Class submarine
- to modules for the Air Warfare Destroyer
- and extending the life of the F-18 Hornets…
… the Hunter has always punched above its weight.
This proud tradition of this region making a strong contribution to the security of our nation will continue under the Albanese Government.
Let me take this opportunity this evening to outline how I see my new role, and my key deliverables as Defence Industry Minister in the months and years ahead.
The role has two parts to it.
Firstly, to ensure Defence acquisition projects are implemented effectively, so that the ADF has the capability it needs to defend the nation; and,
Secondly, to support the growth of an industrial base able to provide the support the ADF needs. This includes sustaining and maintaining existing capabilities, as well as supporting the next generation of game-changing technologies.
A strategic rationale for a sovereign defence industrial base in Australia is critical.
We need to know how we want to shape the industrial ecosystem, and why.
One thing that has struck me so far as I’ve been talking with Defence companies and industry groups around the country, is the lack of medium sized businesses in Australia. Growing medium sized businesses, who are developing and delivering sovereign capabilities, will be a key marker of success for me in the long term.
The Albanese Government has committed to spending $270 billion over the next decade on essential Defence capabilities.
By the end of the decade, I want to see more medium sized businesses, capable of standing on their own two feet, outside of Defence acquisition cycles.
Defence industry in regions like ours is vital to delivering defence capability.
And that capability is critical, because Australia faces the most complex strategic circumstances we’ve seen since the Second World War.
These complex strategic challenges include:
- An intensifying strategic and geo-economic contest …
- The return of war in Europe …
- Growing climate risks …
- And enduring impacts from the pandemic, which are driving inflation, supply chain shocks and de-globalisation.
Russia’s illegal and unjustified invasion of Ukraine is a warning to us all.
It demonstrates we can’t rely on economic interdependence to deter conflict.
The 10-year warning time, central to Australian defence strategic assessments in years gone by – can no longer be relied upon in our planning.
That is why the Albanese Government is committed to spending 2 per cent of GDP on Defence – including to enhance the Australian Defence Force with capabilities like long-range and precision strike weapons, offensive and defensive cyber, and area denial systems.
We will support the men and women of the Australian Defence Force, to give them the capability and skills they need to fulfil their missions.
As our national security landscape changes, it is vital that the Defence Force is positioned to meet our global and regional security challenges.
As we promised before the election, the Government has established a Defence Strategic Review.
We have appointed two eminent leads to conduct this review – former Minister for Defence, Professor Stephen Smith, and the former Chief of the Defence Force, Sir Angus Houston.
This will be a comprehensive review of how the ADF is positioned to deal with current and future strategic circumstances for Australia and the Indo-Pacific region.
The Review will ensure that Defence’s capability and force structure is fit for purpose, affordable and delivers the greatest return on investment.
Engagement with a wide range of stakeholders including Defence industry, national security think tanks, State and Territory Governments and key individuals is vital to the success of the Review.
I encourage you to take a look at the Terms of Reference on the Defence website, and consider making a submission.
Professor Smith and Sir Angus will present the Review and its recommendations to the Government for consideration in early 2023.
Addressing Australia’s strategic challenges will require an imaginative, better-designed, whole-of-nation approach to defence industry.
Supporting the delivery of the Review will be the Government’s Defence Industry Development Strategy.
The Strategy will articulate the strategic rationale underpinning Australia’s defence industry.
It will set out the framework, direction and principles underpinning the direction of defence industry policy and initiatives for the foreseeable future.
And it will chart a path to a strong, sovereign and sustainable Australian defence industry.
I want to make sure this document gives industry the guidance and advice it needs, clearly articulates the Government’s priorities, and how we will deliver.
The policies of the former Government were, to my mind, too broad and not useful to industry or Defence. As part of the Defence Industrial Development Strategy, I want to really focus on what is truly important, and be clear on what our priorities are.
Defending Australia and our interests in a deteriorating strategic environment requires sovereign and internationally competitive research and development capabilities.
Australia can’t do this alone.
So we are working alongside our trusted friends and partners – in the region and beyond – pooling our resources and combining our strengths, to cooperate in areas that deliver a decisive competitive advantage.
As we did in Opposition, in Government we have committed to AUKUS.
AUKUS will not only deliver nuclear powered submarines for Australia.
It will also guide accelerated development of advanced defence capabilities, in quantum technology; artificial intelligence undersea warfare; hypersonics and counter hypersonics; and advanced cyber and electronic warfare.
AUKUS is not just about Australia buying nuclear powered submarines or other advanced capabilities from the United States or the United Kingdom.
It’s about growing the industries of each nation to support the others.
It truly is a partnership.
I’m pleased to tell you that together with our British and American partners, we are making good progress to accelerate the development of advanced defence capabilities where they will have most impact – both for deterrence and for the operational effectiveness of the Australian Defence Force.
We won’t be able to deliver the capability options we acquire through AUKUS without industry’s support.
As initiatives are agreed trilaterally, and specific capabilities are earmarked for acceleration, Defence will engage directly with industry partners. Initial engagement is expected to commence in early 2023.
AUKUS will also provide an opportunity to unlock broader barriers to enhanced technology and industrial base collaboration – the kind of barriers that have constrained benefits from Australia’s inclusion in the US National Technology and Industrial base.
As Minister for Defence Industry, my key message to you this evening is that I am committed to building a genuine, long-term partnership with industry, large and small, locally and internationally.
Australia’s defence industry is made up of thousands of businesses of varying size and capability across multiple sectors.
All have the potential to contribute to the development, delivery, maintenance and sustainment of the capabilities of the Australian Defence Force – the capabilities our people in uniform use to defend our nation and its interests.
I’ve had the privilege of visiting a number of these businesses since becoming the Minister for Defence Industry. I’m going to keep visiting and meeting businesses because it’s important for me to hear your views.
I want to know what’s working, what’s not, and how we can make things better.
The skills and capabilities Australian businesses possess truly is amazing and world leading, and I want to make sure that our policies and programs are helping, not hindering industry.
Under Prime Minister Anthony Albanese’s leadership, the Government is committed to optimising Australian industrial participation in Defence capability acquisition and sustainment projects, wherever possible.
But I want to be clear, that as Minister for Defence Industry, my focus will be on capability not just content.
The $270 billion that the Government will spend on Defence capabilities represents a huge opportunity to develop Australian skills, infrastructure and technology -- but only if we focus on developing genuine capability.
Businesses in the Hunter have many of the skills and capabilities that will be needed, putting this region in a strong position to contribute to these Defence projects, in both acquisition and sustainment.
A strong defence industry, which includes businesses from all over Australia, makes our nation more secure and our economy more robust.
There is no question that innovation in Defence industry and military capability will be a critical element in meeting the strategic challenges of the future.
The Government plans to invest around $3 billion dollars on defence innovation over the next decade.
Further, the Albanese Government is committed to the development of the Australian Strategic Research Agency.
This new Agency will fund and support pivotal research in breakthrough technologies for national security.
It will deliver the cutting-edge technologies Australia needs, and further strengthen our links with our AUKUS partners.
With a large presence of Defence personnel, prime contractors, and deep supply chains, the Hunter region presents significant opportunities for innovative small and medium enterprises to grow and strengthen our local defence industry capability.
The Hunter region includes a number of innovative defence businesses who are already engaged in the Defence innovation system, including:
- Armor Composite Engineering, which has a $3.2 million dollar contract for the development and rapid production of body armour.
- BlueZone Group, which was awarded a $7 million dollar contract to develop a sovereign anti-submarine warfare capability to support the Royal Australian Navy’s integrated undersea surveillance system.
- And the University of Newcastle, which was awarded a $2.1 million dollar contract in September 2017 to develop a Cost-Effective Virtual Reality Approach to Assess and Train Cognitive Resilience.
The University of Newcastle is also a partner of the Defence Science and Technology Group through the Defence Innovation Network.
This partnership is helping to cement the university as the intellectual engine room of defence science innovation in the Hunter Region.
It’s a partnership that is helping to ensure our best and brightest have good reasons to study here … and good reasons to stay in our area and build meaningful, well paid careers in developing the capability to keep our country safe.
Important though it is, the University of Newcastle won’t be our only tool for giving local workers the skills they need.
I have heard the message loud and clear from Defence industry.
You need the Government’s support to help build the local workforce, because right now, you are recruiting while unemployment is the lowest since Gough Whitlam was Prime Minister.
Jobs, workforce and labour supply issues are a key priority of the Albanese Government.
Today the Jobs and Skills Summit got under way in Parliament House in Canberra, bringing together unions, employers, civil society and governments, to address these shared economic challenges.
Addressing skills shortages and getting our skills mix right over the long‑term is one of the Summit’s key areas of focus.
And I know that’s critically important for Defence Industry and for the Australian Defence Force.
It is just as critical that we uplift the STEM skills of our broader workforce as it is to nurture the next generation of elite research scientists if we are to protect Australia and our interests.
Defence is currently supporting several skilling initiatives which seek to address industry capacity and capability gaps and boost the pool of STEM skills within the Hunter Region and nationwide.
These include the Defence Industry Internship Program; the Naval Shipbuilding College; the Skilling Australia’s Defence Industry program; and the Defence Industry Virtual Work Experience Program.
And I am committed to working with industry on ways we can support this region’s workforce to develop and enhance local skills.
When we look to the future of Australia’s defence industry, we have to acknowledge that the ADF is not a big enough customer to support the industry on its own.
New markets and opportunities to diversify through exports are required to help unlock the full potential of our industry to grow, innovate and support Defence’s future needs.
That is why the Government will continue to support defence industry to export … so that industry can not only do fantastic work in supporting the Australian Defence Force, but can also export Australian know-how and Australian technology to the world.
In doing this, industry will support Australian jobs for generations to come.
Put simply, defence export success is a win for industry, a win for the workforce, a win for Defence, a win for the Australian economy and a win for our strategic interests.
Exporting also increases interoperability with our international partners and provides long-term, tangible partnership opportunities.
Exporting to our allies, and supporting the capability of like-minded countries, strengthens our relationships and our ability to shape and influence our strategic environment.
I know that entering and succeeding in foreign markets can be tough, and that success is rarely down to a single event, but a culmination of efforts on multiple fronts.
For these reasons we are working hard to promote Australian exports and Australian businesses around the world through the Australian Defence Export Office.
The Export Office is the Government’s focal point for coordinating whole of government export support for Australian defence industry.
When industry is ready to export, the Export Office - in partnership with other government agencies, including Austrade, Export Finance Australia, and the States and Territories - can help you navigate global markets and achieve export success.
The Export Office works closely with staff at overseas posts, such as Defence Attachés, and leverages Austrade’s overseas presence, including Business Development Managers in seven priority markets, to help companies compete.
The government is continuing to invest up to $4.1 million annually to support Australian businesses to build their export capability through the Defence Global Competitiveness Grants program.
To give you just one example, Cardiff company Nupress Tools in my electorate has used this program to establish a high-speed milling centre – this is enhancing the company’s manufacturing capabilities and its eligibility to access defence export opportunities in key markets in North America, the Indo Pacific and Europe.
I encourage you to engage with the Export Office to learn about the support that is available.
Supporting Australian defence companies to become export-ready will be a key focus of my time as Minister for Defence Industry.
A few weeks ago at the Chief of Army Symposium the Government unveiled an exciting prototype.
It was the iconic Australian designed and built Bushmaster – but this one was powered by electric motors and innovative battery technology.
It accelerates up to four times faster than a diesel-powered Bushmaster.
It’s almost silent – so it’s stealthier on the battlefield.
It generates a fraction of the heat signature of the standard Bushmaster Protected Mobility Vehicle.
And it achieves zero carbon emissions.
It was converted to electric power by a Shortland company 3ME Technology – a firm based in Cardiff – together with the Australian Army, including operators and engineers from the local reserve unit.
The electric Bushmaster prototype is an outstanding example of cooperation between industry, Defence Science and Technology Group and the Australian Defence Force.
It’s yet another example of the Hunter Region seizing the opportunities to create new jobs and new industries.
And it demonstrates, once again, the immense capacity of this region to deliver the future of Defence capability.
That’s just one story of the Hunter region’s contribution.
I look forward to working with you – and with your defence industry colleagues throughout Australia – to write more stories like that.
Because those are the innovations and the achievements that we need to build a stronger sovereign defence industry and, ultimately, to build a more secure future for our nation.