Speech to the American Chamber of Commerce in Australia

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

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17 May 2023

I would like to begin by acknowledging the Kaurna people, the traditional owners of the land on which we meet this morning, and pay my respects to Elders past and present.

Thank you to the American Chamber of Commerce and April Palmerlee for hosting this event.

I’m thrilled to be among so many great American companies contributing to Australia.

Our two countries have always enjoyed strong business and trade links and this has only increased as the world has become more interconnected.

In 2003, a year before the Australia-United States Free Trade Agreement came into effect, Australia invested just over $230 billion in the US, while investment in Australia from the US was almost $300 billion. 

By 2022, investments from both countries had grown to total over a trillion dollars each.

So many businesses have benefited from this relationship.

I’m fortunate enough to have in my hometown of Geelong, Scale Facilitation – a great example of the opportunities for businesses to leverage the close Alliance between Australia and the United States.

Scale Facilitation is the brainchild of David Collard who is proudly Geelong born and bred.

Dave was the youngest ever partner at PWC. During the pandemic, he saw the opportunity to go out on his own providing sanitising and other health equipment that have become so familiar over the last few years – masks, gloves – to big government entities such as the NYPD.

From the outset, Dave was inspired by the power of the Alliance – the deep trusting relationship between Australia and the US – as a foundation for doing business.

He saw that in a strategically complex world, trusted supply chains would become invaluable. And this led him to the world of battery manufacturing.

Starting with an operation in upstate New York, Scale Facilitation will take this technology to establish one of the largest battery manufacturing sites in Australia in his and my hometown of Geelong.

Dave has made this a truly AUKUS endeavour with the purchase of Britishvolt, one of the largest battery manufacturers in the UK. He’s also establishing a significant presence in India.

As an aside, Dave has always seen what ex-service personnel have to offer in the general economy. I remember meeting retired Lt Gen Mark Schwartz of the US Army who was one of Dave’s earliest advisers. Dave’s newest recruit is retired Major General Andrew Freeman who recently served as Australia’s Defence Attaché to the US.

Last year I had the great honour with the Leader of the Opposition of opening Scale Facilitation’s office in its new home at New York’s One World Trade Centre. It was literally a night in which Geelong met New York. It was a joyous occasion, but also one which for me was filled with poignancy.

The story of Scale Facilitation is the story of so many of you.

The intimate relationship between the US and Australia at a Government level implies an opportunity for the private sectors of both our countries.

And it is so critical to the proper functioning of the Alliance that companies like yours have taken this opportunity.

For that, know that you have the gratitude of both nations.

Just over two months ago Australia, the US and the United Kingdom announced the optimal pathway under the banner of AUKUS through which Australia would acquire conventionally-armed, nuclear-powered submarines.

The acquisition of this formidable capability is the single biggest leap in Australia’s defence capability since World War Two.

It will see Australia become one of only seven nations to operate nuclear-powered submarines.

It will strengthen our capacity to defend Australia and its national interests.

And it will significantly enhance our contribution to the security and stability of the region.

And we will develop the capacity to build these submarines right here in Adelaide.

Not far from here at Osborne, in the coming years, South Australian industry will be transformed as it takes its place at the forefront of one of our nation’s greatest industrial undertakings.

And this will see huge opportunities for Australian companies to be a part of this supply chain. And in the process have the chance to participate in corresponding supply chains in the US and the UK. It will also see US companies invest more in Australian industry.

But importantly, we would not be in this position were it not for the trust placed in us by both the US and the UK to steward this capability.

Only once before has the US shared its nuclear-powered submarine technology. That was 65 years ago with the UK.

Once again, the trust between our two nations is reflected through an integration of our industry.

Through AUKUS we are building Australian capability and expanding our strategic options.

We’ve spoken a lot in recent months about the acquisition of nuclear-powered submarines – the first pillar of AUKUS.

But as we embark on the journey of acquiring nuclear-powered submarines and developing a sovereign industrial capability to build them here in Adelaide, we are also focused on developing asymmetric technologies that will help deter future conflicts.

Our partnership will guide the accelerated development of advanced defence capabilities that will deliver this advantage through pillar two of AUKUS.

Capabilities that, along with nuclear-powered submarines, will help us hold potential adversaries’ forces at risk, at a greater distance and increase the cost of aggression against Australia and its interests.

To do that we will need to apply our technological knowhow and be at the cutting edge of technology.

Technologies such as quantum computing, artificial intelligence, and hypersonic and counter hypersonic missiles.

Our focus will be on translating advancements in technology into practical, asymmetric capabilities that can be distributed and deployed quickly.

The Defence Strategic Review released last month recommends that the development of these technologies, through the AUKUS partnership, be “prioritised in the shortest possible time”.

Delivering on this ambitious vision and the next generation of defence capabilities will require a new mindset.

As was observed in the Defence Strategic Update in 2020, Australia now sits within the ten year threat window.

The Defence Strategic Review argues that this now demands that as a nation we need to act with a controlled sense of urgency. We have no time to waste.

Defence will need to prioritise and accelerate innovation.

If we are to develop these advanced capabilities, we need to adopt an innovation mindset – one where we are not afraid to fail fast, learn, and adapt.

That’s why we are investing in making these capabilities a reality, and building the framework and organisations to achieve this.

Following the Government’s response to the Defence Strategic Review, we announced the establishment of a new Advanced Strategic Capabilities Accelerator – ASCA.

And in the Budget we handed down last week, the Albanese Government is taking the first steps to putting the funding behind ASCA – for $3.4 billion over the next decade – to make it a reality.

The creation of ASCA will turbo-charge Australia’s contributions to pillar two of AUKUS.

It will help us start delivering advanced, asymmetric capabilities that benefit not just Australia but the US and the UK.

And it will start to build a truly trilateral industrial base across our three countries that will see us more seamlessly transfer the skills, workers, and intellectual property we need.

As we revolutionise our innovation capacity, the Defence Strategic Review also recommended Defence become a better customer to industry through a new approach to acquisition.

Defence no longer has the luxury of taking the time to get a capability perfect. We need to adopt a minimum viable capability model to have new capabilities put into service quicker.

We must also change our relationship to risk and celebrate the learning that comes from failure.

And we must understand that while industry always wants to hear ‘yes’ when it comes to a government tender, a quick ‘no’ is the next best option.

These are the ingredients to making defence procurement faster and more nimble. And while governments have talked the talk before, we know that unless we walk the walk now, we will not meet the urgency of this moment.

Pat Conroy – the Minister for Defence Industry – is leading our work in reforming defence procurement and we will have more to say on this through the remainder of 2023.

As we transform our defence innovation system and our defence procurement, industry has a huge role to play. Because ultimately it is you who will deliver the capability our nation critically needs.

Technology transfer and information sharing underpins both AUKUS pillars, and indeed the breadth of cooperation under the Alliance.

While there is a shared mission between our countries and an agreement at the highest levels of our governments, there are significant barriers we must break down across our systems to achieve this.

This is particularly true of our export control regimes.

Regulations around transfers of technology, sensitive information and defence materiel are, of course, understandable.

But what is really clear is that if we are to realise the ambition of AUKUS, the transfer of technology and information between Australia and the US needs to be seamless.

This is a big task – the barriers in both systems are vast and complex. There is no silver bullet.

But Australia is committed to breaking down these barriers in our own system while maintaining the robust regulatory and legal frameworks to protect these transfers.

And we’ve been having productive conversations with the US – including in my conversations with Secretary Austin – about ITAR and how we can translate that shared understanding and positive intent into action.

We are encouraged by the momentum we’re seeing at all levels across the Australian and US systems to overcome these hurdles.

But we need supportive voices in business to keep this momentum going. Your role in building the seamless defence industrial base between our countries is pivotal.

Because improving technology transfer and information sharing between the US, the UK and Australia is at the heart of maximising the full potential of the AUKUS agreement.

We are seeing the biggest conventional military build-up in the world since the end of World War Two. And it is happening right here in our region.

At the same time, our economic connection to the region and the world has never been greater. And there is a physical manifestation to that. We are deeply invested as a nation in open trade and the global rules-based order.

This order is under pressure within the Indo-Pacific and the world.

All of this gives rise to the most complex strategic environment in the post-war world. And that in turn means our Alliance with the US has never been more important.

The Alliance is at the heart of a greater tempo of defence cooperation and a deeper transfer of critical technology. It underpins the blossoming of the AUKUS agreement.

And it is also the foundation for the growth in business cooperation between the Australian and the United States defence industries.

You are the custodians of that cooperation. And through it we will see both our countries – in a difficult world – become safer and more prosperous.

Thank you.

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