Address to the Defence Connect Budget Summit 2024

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The Hon Pat Conroy MP

Minister for Defence Industry

Minister for International Development and the Pacific

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media@defence.gov.au

(02) 6277 7840

General enquiries

minister.conroy@dfat.gov.au

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17 May 2024

I begin by acknowledging the Ngunnawal people as traditional custodians of the land we are meeting on and recognise any other people or families with connection to the lands of the ACT and region.

I pay my respects to their Elders, past, present and emerging.

I also pay my respects to Aboriginal and Torres Strait Islanders who have served our nation in the past and continue to do so today.

Thank you for inviting me to address the Defence Connect Budget Summit for 2024.

INTRODUCTION

American President Joe Biden has a saying: “Show me your budget, and I’ll tell you what you value.”

With the 2024 Budget, the Government has delivered a generational investment into the Australian Defence Force’s posture, capability and structure – a transformative investment that will ensure Australia’s soldiers, sailors and aviators have the tools they need to deliver National Defence.

National Defence is a foundational concept of the National Defence Strategy we released last month.

This is a coordinated, whole-of-government and whole-of-nation approach that harnesses all arms of national power to defend Australia and advance our interests.

National Defence is what we value; it’s what we’ve funded in this Budget; and it’s what we are now delivering.

Since coming to office, this Government has increased Defence funding by $5.7 billion over the next four years and by $50.3 billion over the next decade.

That’s $50.3 billion more than the Defence funding trajectory we inherited from the former Government.

To put this into perspective, Defence’s current budget is approximately $53 billion dollars per year. 

Our decisions will almost double the Defence budget to over $100 billion dollars in 2033-34.

In terms of increasing Defence funding over the forward estimates, this is the biggest commitment in decades. 

FOUNDATIONAL REFORM AND RECORD INVESTMENT 

Spending without strategy is a recipe for wasting time and money, and the very real changes in our strategic environment mean that Australia can’t afford to waste either. 

The most complex strategic circumstances since the end of the Second World War demand the biggest reassessment of our strategic posture in 35 years.

That’s why this Government commissioned the Defence Strategic Review in our first 100 days of Government and delivered it within 12 months. 

We didn’t waste a moment, with specific directions to Defence to start work on six immediate priorities the Government identified in response to the DSR.  

We also committed to undertake a short, sharp analysis of Navy’s surface combatant fleet capability, and it was delivered with a budget commitment of an additional $11.1 billion dollars over the next decade.

This commitment included an additional $1.7 billion over the next four years, a plan for accelerated delivery of Navy’s future surface combatant fleet, and a plan to expand Australia’s shipbuilding industry.

And we have now delivered the new National Defence Strategy, along with a rebuilt Integrated Investment Program.

Delivering the rebuilt Integrated Investment Program ensures the new defence strategy is coherent, logical and affordable.

It means we will prioritise the acquisition of the most important capabilities to bolster Australia’s deterrence capabilities with additional funding of $50.3 billion dollars out to 2033-34.

This is serious, sequenced, detailed reform.

And taken together this represents both a record investment in defence capability and an investment in a future made in Australia, which will not only make the nation more secure, but also deliver dividends for industry and jobs for Australian workers.

The funds committed in the Budget, and the certainty we’ve delivered by continuing the long-standing practice of providing a 10-year funding model for Defence, mean we can deliver:

  • A Navy with an enhanced lethality surface fleet that is more than doubled in size and conventionally-armed, nuclear‑powered submarines. 
  • An Army optimised for littoral manoeuvre with a long-range land and maritime strike capability.
  • An Air Force that can deliver long-range intelligence, surveillance and reconnaissance and an enhanced maritime, land and air strike capability.
  • And a strengthened and integrated space and cyber capability, including enhanced cyber and electronic warfare and new space-based situational awareness.

ACCELERATING THE MOST IMPORTANT PRIORITIES

The Government has been up-front about the hard but necessary decisions we’ve had to make to divest, delay or re-scope projects that do not meet our strategic circumstances. 

But more important in my view are the decisions we’ve made to accelerate and bring projects forward that will ensure the ADF can meet the nation’s security challenges.

This Government is speeding up major capability acquisitions to meet the challenges Australia faces.

For acquisition programs which are strategic priorities we are bringing forward initial delivery dates and reducing the time for completion of projects.

For instance, the Defence Strategic Review recommended, and the Government accepted, the need to accelerate and expand our delivery of Landing Craft for Army along with long-range fires.

These are critical capabilities for Army to fulfil its mission. 

We’ve delivered the funding.

We’ve taken the decision to build Army’s Landing Craft Medium at Henderson in Western Australia.

By making this a genuine priority we are ensuring these vessels will be delivered from 2026 to support continuous naval shipbuilding and get the vessels in service with Army as soon as possible. 

We will also deliver the first of the new Army Landing Craft Heavy seven years earlier than the former Government planned.

Why?

Because having an Australian Army better equipped to carry out littoral manoeuvre in our northern approaches is a key requirement for meeting the strategic challenges facing Australia.

The new Landing Craft will start to be delivered at around the same time as the new High Mobility Artillery Rocket System (HIMARS) missile launchers and the Redback infantry fighting vehicles.

The Redback vehicles will be built in Australia by Australian workers, in Geelong.

The first new infantry fighting vehicle will be delivered in 2027, two years earlier than the former government planned.

And all 129 new vehicles will be delivered by the time the first vehicle would have been delivered under the former government’s plan.

The purchase of the HIMARS and the acceleration of Guided Multiple Launch Rocket System (GMLRS) production in Australia will deliver to the Australian Army a Regiment of Long Range Fires. 

The Government is acquiring the missiles, equipment and facilities needed to establish the new Army Fires Brigade from 2026 – seven years earlier than the former Government’s plans.

These investments will ensure Army is properly equipped to respond to the most demanding land challenges in our region.

Australia is a maritime nation that depends on the security of our oceans.

Our strategic circumstances require a larger and more lethal surface combatant fleet, complemented by a conventionally-armed, nuclear-powered submarine fleet.

The Government is getting on with the job of delivering conventionally-armed nuclear-powered submarines.

At the same time, we are moving at speed to deliver a larger and enhanced lethality surface combatant fleet for the Navy. 

Our plan will deliver confidence to industry, certainty to workers and security for the nation.

Construction on the first Hunter class frigate will begin this year at Osborne, with five more to follow.

The 11 new general purpose frigates we are acquiring to replace the ageing Anzac Class frigates as well as the six Large Optionally Crewed Surface Vessels will ultimately double the size of the Australian Navy’s surface combatant fleet.

They will provide maritime and land strike, air defence and escort capabilities.

To get these new frigates into service as soon as possible, and ensure continuity of the national naval shipbuilding enterprise, Defence will pursue an offshore-then-onshore build strategy.

Successful and timely consolidation of the Henderson precinct in Western Australia will see ships one to three built overseas and ships four to 11 built at Henderson.

The first general purpose frigate will be delivered by the end of 2029 and operational in 2030.

By comparison under the former Government the Navy’s first new major surface combatant vessel was to have been the first Hunter Class frigate in 2034.

BUDGET FUNDING COMMMITMENTS 

Our strategic circumstances demand accelerated delivery of priority capabilities to the ADF.

This accelerated delivery is now backed by the Government’s decisions to increase funding and rebuild the IIP.

This is reflected in this week’s Budget.

The new Defence funding in this week’s Budget includes:

  • $1 billion over three years from 2024-25 to accelerate priority investments in targeting, long-range fires, theatre logistics, fuel resilience and robotic and autonomous systems.
  • $11.1 billion over ten years from 2024-25 to deliver the new surface combatant fleet for Navy.
  • $38.2 billion over seven years from 2027-28 – and $7.7 billion a year every year after that – to support the next generation capabilities within the rebuilt Integrated Investment Program.

These funding increases are not just media releases or political thought bubbles.

They are Cabinet decisions, written into the Defence budget for the next decade and beyond.

The only risk to this funding commitment and the accelerated delivery of defence capability that it supports lies in the lack of bipartisanship on the defence budget.

The Coalition has refused to support our $50.3 billion in new Defence funding if they are elected.

Only this week the Shadow Treasurer over-ruled the Shadow Defence Minister on this critical point.

DEFENCE INDUSTRY DEVELOPMENT STRATEGY

The Government is not only committed to accelerated capability delivery – we are also committed to ensuring Australian defence industry plays a critical role.

As Minister for Defence Industry, my focus is to develop the sovereign defence industrial base we need to equip and sustain the ADF we require. 

As we reform Defence, ensuring it is fit for purpose for the strategic challenges we face, we are bringing a laser-focus to sustaining the defence industry we have and growing the industrial base we need, much faster than we have before.

That’s why the Government’s Defence Industry Development Strategy is fundamental to the delivery of the National Defence Strategy and the Integrated Investment Program.

At its heart are the Sovereign Defence Industrial Priorities which have been designed into the Integrated Investment Program and embedded right from the very beginning.

That means as we develop and acquire these critical capabilities we are developing and supporting the nation’s sovereign defence industrial base at the same time.

It means industry can count on consistent and sustainable demand to support the Sovereign Defence Industrial Priorities. 

And Defence is directed to work with industry to develop the sovereign defence industrial base in priority areas, including the workforce we need to design, build and sustain what the ADF requires.

This week’s Budget delivers $165.7 million over five years to establish the Defence Industry Development Grant program for Australian defence industry.

This program will help Australian businesses to increase their scale and competitiveness and respond to Defence’s capability requirements.

The Budget also provides $101.8 million over seven years to support defence industry workforce and supply chain participation for Australia’s conventionally-armed, nuclear-powered submarines.

This includes:

  • The Shipbuilding Employment Pathways initiative to deliver a new apprenticeship program in trades needed for building nuclear-powered submarines.
  • Training programs in welding, material testing, and for key professions in the submarine enterprise.
  • Programs to expand Australian industry participation in the submarine supply chain.
  • And 3,000 scholarships for undergraduate STEM courses relevant to the submarine enterprise.

DEFENCE INNOVATION

This Government understands the importance of innovation to our economy, to our society and to our national security.

The creation of the Advanced Strategic Capabilities Accelerator is essential to delivering this future for Australia.

ASCA’s approach is focused on rapidly pulling-through disruptive technologies into capabilities that will meet Defence’s most pressing needs. 

The rebuilt Integrated Investment Program provides $3.6 to $3.8 billion for ASCA over the ten years from 2024-25.

Ghost Shark, the extra-large autonomous undersea vehicle co-funded between Defence and Anduril Australia, is ASCA’s Mission Zero. 

The Ghost Shark is an undersea game-changer.

It will provide Navy with a stealthy, long-range autonomous undersea warfare capability that can conduct persistent intelligence, surveillance, reconnaissance, and strike. 

It is one element of the Government’s investment of up to $7.2 billion for the development and acquisition of subsea warfare capabilities and new autonomous and uncrewed maritime vehicles.

And it is an element that we are delivering at speed.

The Ghost Shark program only started in mid-2022.

The first prototype was delivered one year early, and the first production variant will be delivered by the end of 2025.

Ghost Shark is a clear example of how the Albanese Government is delivering on our commitment to pull innovation through into capability.

And it underscores the fact that our Government is investing a record amount in defence capability and a future made in Australia, which will make the country more secure while also delivering dividends for industry and jobs for hard-working Australians.

DEFENCE EXPORTS AND NATIONAL RESILIENCE

I want to talk briefly about Defence exports because they are so important to the future of National Defence.

In March, the Government secured the single largest defence export deal in Australian history, to supply Australian-made Boxer Heavy Weapon carrier vehicles to Germany.

The Boxer vehicles will be manufactured by Rheinmetall Defence Australia in Queensland under a contract worth 1.9 billion Euros, or 3.1 billion Australian dollars.

This secures more than 600 jobs at Rheinmetall’s Centre of Excellence in Brisbane.

It also strengthens the relationship between Australia and Germany and bolsters Australian defence industry. 

Exports deliver well-paying jobs.

And they deliver markets that help support a resilient Australian defence industrial base with greater industrial capability and capacity to support Defence.

GUIDED WEAPONS AND EXPLOSIVE ORDNANCE ENTERPRISE

You can’t really talk about sovereign defence industrial capability without talking about the Guided Weapons and Explosive Ordnance Enterprise, or GWEO.

The war in Ukraine has underscored that high-intensity warfare churns through munitions at an extraordinary rate.

Earlier this year, Ukraine fired over 10,000 155mm artillery rounds in a single day.

That equates to a full month of European production.

A responsible government has to ensure that Australia has sufficient supplies of munitions, and the industrial capacity to ensure we are not completely dependent on foreign supply. 

It is intrinsic to our deterrence and to our national resilience. 

So, the Government has backed GWEO with a commitment in the new Integrated Investment Program of $16 to $21 billion dollars over the next decade. 

Our aim is to begin manufacturing GMLRS missiles in Australia by 2025. 

By contrast, the former Government issued two media releases, but made no decisions and had no plans to manufacture missiles in Australia.

GMLRS is a starting point, not an end-point, for this project. 

A huge amount of work has gone into readying the infrastructure and the workforce to make this happen.

We’ve refurbished and reopened Point Wilson Wharf to enable the large-scale import and export of guided weapons and explosive ordnance.

And we’ve invested $220 million in domestic manufacture of munitions at factories in Mulwala and Benalla. 

They are the two flagship actions of a suite of initiatives to stand this up as soon as possible. 

GWEO is a terrific example of what our alliance with the United States makes possible in terms of strengthening our sovereignty. Through the sharing of critical technologies, we will be able to start manufacturing guided weapons in Australia. 

Over time, as we prove our capability our vision is to move into more complex weapons, and uplift Australian companies into global supply chains. This supports the sovereignty of Australia, and the United States, through more robust and resilient supply chains.

I’ve dwelt this morning on how the Budget is supporting accelerated defence capability acquisitions to ensure the ADF’s capabilities match the strategic challenges that Australia confronts.

This Government places the highest value on Australia’s safety, security and sovereignty – that’s why defence and national security occupy the most senior positions in this Government. 

The Prime Minister is a powerful advocate for Australia’s national interests – and chairs Cabinet’s National Security Committee.

The Deputy Prime Minister, the second most senior Minister in the Government, chose the Defence portfolio.

The Government’s Senate Leader is Minister for Foreign Affairs.

The Minister for Defence Industry is a full member of the National Security Committee as are the Treasurer and Finance Minister. 

This focus on defence and security at the highest levels of Government was critical in securing the Budget’s additional funding for Defence.

On a personal note, I’ve had the privilege and the honour of engaging on Defence issues for the last 17 years.

I’m in complete lockstep with the Deputy Prime Minister on the approach the Government has taken to reforming Defence:

  • Commissioning and delivering the biggest reassessment of our strategic circumstances in 35 years through the Defence Strategic Review
  • Supporting the defence industry we need to underpin our future force through the Defence Industry Development Strategy.
  • Developing and delivering the inaugural National Defence Strategy.
  • And rebuilding the Integrated Investment Program. 

Government has no more important or consequential task than to ensure the safety and security of the nation.

The 2024 Budget will ensure we deliver. 

Thank you. 

ENDS

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