Speech to the Hunter Defence Conference

Introduction

I say it every year, but I will say it again – the Hunter Defence Conference really is the best defence industry gathering in Australia.

The Hunter has been the jewel in the crown for defending Australia since our earliest days, built on an incredible historical legacy.

The confluence of mining, manufacturing, energy production, agriculture, shipping (to name a few) and the generations of dedicated people working in these critical industries.

The research and development depth.

The strategic location.

The proximity of Defence facilities and activities.

We are the model to which other regions aspire.

The conference theme this year – Building Your Defence Strategy – is music to my ears.

Australia’s National Defence Strategy sets out what we must do to ensure Australia’s security and prosperity into the future, and the means to keep Australians safe: the strongest sovereign defence capability and stronger self-reliance. 

And that cannot be done without a strong defence industry.

And key to unlocking the potential of the defence industry is the reform process we have begun -- the biggest reforms to the way Defence does business since the Tange reforms in the 1970s.

At the National Press Club at the start of July, I officially launched the Rebuilding Defence Capability report of the Defence Reform Taskforce, as well as the 2026 Defence Industry Development Strategy.

And I spoke about why we needed to push through with defence reform.

To do this, the Defence portfolio and industry must operate as an integrated system.

Inside Defence, we are already strengthening accountabilities, governance, assurance, and discipline across the capability lifecycle.

And we are building a workforce and leadership culture capable of delivering the National Defence Strategy. 

On July 1, the changes began.

The new Defence Delivery Group was stood up – and our capability delivery functions have already come together under this one new unifying umbrella.

And I’m pleased to confirm that the recruitment process for the permanent National Armaments Director is well advanced, ahead of the Defence Delivery Agency being established on 1 July next year.

The National Armaments Director will be the industry steward, the singular point of accountability, the person responsible for capability delivery.

The NAD will report directly to myself and the Deputy Prime Minister. 

They will drive the work to deliver on the priorities of the Defence Industry Development Strategy. 

Importantly, in terms of accountability, and bang for buck – the DDA will have control of its budget for all major acquisitions, once government has approved them. 

This has been glossed over by a lot of commentators, but it’s at the heart of what makes these reforms so significant and why the DDA will operate very differently to the former Defence Materiel Organisation (DMO), which operated through the Secretary and Chief of the Defence Force. 

The key difference between the DDA and the DMO is accountability. 

We firmly believe this reform will lead to better project management, better change discipline, and greater accountability. 

I have said it many times before, but it bears repeating – changes kill budgets and changes kill schedule.

And under Defence’s new capability delivery model, we will stop the gold-plating of capability that undermines public confidence in our defence industry.

This means we can put capability into the hands of our warfighters as quickly as possible.

But I do want to assure you also – we’ve deliberately ensured a phased approach to reforms, to minimise the impact on industry and current delivery priorities.

This is the concept of industry stewardship.

Taking a whole-of-system view of industrial capability.

Providing clearer demand signals to industry.

Strengthening strategic partnerships.

And creating a more coordinated and consistent approach to industry engagement, including earlier in the capability lifecycle.

Reform detail – practical measures to shape change 

To dig down a bit into exactly how things are going to be done differently in terms of the relationship between Defence and Industry – I’d like to make a couple of points.

Number one – rethinking and reshaping investment mechanisms.

This means supporting and opening private capital market co-investments and other alternative financing options in defence specific priority areas.

One way the Government is doing this is by overhauling the USD $3 billion Defence Export Facility. 

This investment mechanism, administered on Defence’s behalf by Export Finance Australia, was a great idea on paper.

But since it was established in 2018, it has only been used three times – and not at all since 2020. 

Its limited scope and approval process didn’t meet the needs of industry, particularly small-to-medium enterprises.

That’s $3 billion not being accessed by Australian industry – so we are taking action to fix it.

Tonight I can confirm that the Defence Export Facility will be reformed into a new Defence Industry Growth Facility.

The Growth Facility will enhance alternative financing options for Australian industry by expanding the Facility’s remit beyond exports, with projects that support sovereign defence capabilities and self-reliance now eligible for consideration.      

This initiative is in line with the directive in the 2026 National Defence Strategy to adopt alternate financing streams and will ensure that the Government is not only supporting the priorities in the DIDS, but also the government’s broader Future Made in Australia agenda.

Number two – better communications strategies.

This essentially means bringing defence industry further into the tent – with access to information, closed briefings, various forms of classified intelligence – so you can engage early, take calculated risks, and get on and do the job that we need you to do.

Number three – a muscular and streamlined approach to procurement.

With a clear imperative to Minimum Viable Contracting.

This is part of a mindset shift – to accelerate procurement processes and encourage a different attitude to risk and drive cultural change.

Big strides in Australian capability 

I’m also very pleased that we’ve extended the Defence Industry Development Grants Program out to 2029-30 with an additional $80 million investment taking the total investment in the Program to around $250 million.

Tonight, I can confirm that in the two years since it kicked off, the program has awarded almost 230 grants, investing $82 million to strengthen Australia's Sovereign Defence Industrial Base.

For example, prime contractors such as Anduril, the designer and manufacturer of the Ghost Shark program have provided Letters of Support enabling key suppliers to access grant funding under SDIP 5, leading to seven companies within that supply chain to receive about $6 million in grant funding to help scale their manufacturing capabilities.

And I’m pleased to say this included a $1 million grant to Summers Engineering, a small business located about 2 hours down the road in Brookvale to support the production and inspection of precision parts for integration into the Ghost Shark. 

A new capability that is expected to support a 50% increase in the company’s production capacity.

And Stella Engineering in Berkeley Vale has received $1 million in grant funding to support its manufacturing and supply activities across multiple aerospace, land and naval platforms, including Collins Class Sustainment and AUKUS-aligned programs. 

The Albanese Government is committed to a future made in Australia, and that includes the defence industry.

And so I say, it may be that you just need a small grant – or maybe you need something a bit more sizeable – but I just say to those in the room, this grant program is there to be used. 

Under SDIP 4, 25 Australian businesses have received more than $14 million in funding to expand their capacity to manufacture and sustain prioritised components for the GWEO enterprise. 

These investments have been supported by strategic partners, including Kongsberg.

More broadly, the strongest growth has been recorded in the Naval Shipbuilding and Land Systems sectors. 

Over the past two years, SDIP 2 and SDIP 3 have each supported more than 50 grants, generating in excess of $40 million in new manufacturing investment from government and industry.

Workforce and apprenticeships targets

I do want to speak briefly about workforce.

Defence workforce – and industry workforce – it goes without saying really – are critical to the mission.

Without our people, we are nothing.

The Hunter, an engineering and manufacturing heartland, knows this better than anywhere.

And defence Primes are uniquely positioned to grow the workforce given their scale and their ability to forecast future work and influence the investment decisions of their supply chains.

That’s why the Government has committed to working with defence Primes to set targets that grow their apprentice and trainee workforce, starting later this year.

That will help train enough workers with the right skills now and into the future.

This is an important element of a Future Made in Australia – by Australians for Australians.

Technically skilled workers are obviously critical for national defence, and our sovereign manufacturing capability, but also critical to our economy.

That’s why we’ve increased investment in apprenticeships, traineeships and STEM pathways, partnering with industry, universities and training providers, supporting Australians to train and learn and share skills abroad to connect our workforce with partner workforces more closely.

Defence in the Hunter

And finally a few words on the local economy, and outstanding local achievements.

Friends, as I said last year - the Hunter defence industry continues to do Australia proud.

With more than 120 defence businesses, the Hunter’s standing as the regional epicentre of defence manufacturing in NSW grows with each new project.

And I have been to enough sod turning and other project launch events here to know the pace is cracking!

Bluebottle

For example, in June I had the pleasure of officially christening the hull of Ocius Technology’s first Bluebottle uncrewed surface vessel – under a new contract – at Van Munster Boats here in the Hunter.

Van Munster’s facility in Morisset is helping to strengthen Australia’s maritime security by providing the fibreglass moulds and producing the platforms for Ocius Bluebottles. 

In March this year we announced this $176 million investment to deliver 40 new Australian-designed and built Bluebottle vessels, which will expand Navy’s operational fleet to 55 Bluebottles. 

It's already providing near persistent, intelligence, surveillance and reconnaissance for Australia, having even remained on station as cyclones rolled through.

This is Aussie innovation in action. 

Just as when you see a blue bottle on a beach, or in the water, it’s a signal to stay away. 

I want potential adversaries to realise when they see an Ocius Bluebottle, it's also a signal to get out of our ocean.

And this project is a great example of creating jobs through strengthened supply chains.

This latest investment will create 50 jobs at Ocius’ new advanced manufacturing facility in Sydney, supported by a second production site here in the Hunter region.

Lockheed Martin Australia 

In July I was at the sod turning in Williamtown for Lockheed Martin Australia’s new $85.9 million Air Power Precinct.

The purpose-built National Integrated Air and Missile Defence (IAMD) Ecosystem will support next-generation IAMD systems. 

The precinct will also provide critical sustainment capabilities for Australia’s F-35 fleet and support regional sustainment arrangements for other F-35 operators.

Creating opportunity for SME innovation, reinforcing supply chain resilience and of course growing jobs – through for example Australian-owned contractor, Built, which is constructing the new facility with the precinct due to be operational by 2028.

I know Lockheed Martin intends to create opportunities for local suppliers and small-to-medium enterprises to participate in the defence supply chain.

Kongsberg

And I’m pleased to update you tonight on construction of Kongsberg’s world-class missile manufacturing and maintenance capability at the Newcastle Airport precinct – right here in the Hunter. 

In May, I attended the topping out ceremony. Since then, the build has progressed further into the advanced fit-out phase.

The facility is the cornerstone of the Government’s up to $850m investment into local manufacture and maintenance of both Naval Strike Missile and Joint Strike missiles. The first facility of its kind outside of Norway.

Construction is on track to be completed early next year. 

Initial low-rate missile manufacture will commence later in 2027, ramping up to full-rate production soon after, with the capacity to produce more than a 100 missiles per year. 

The project has already seen about $85 million in project trade value awarded locally and $54 million in local expenditure. 

This is great news for the Hunter, and an example of how by using local subcontractors and suppliers, projects like this can make a real difference for the local economy.

At its peak, the Kongsberg missile factory project will have created more than 500 construction and 100 manufacturing jobs in the Hunter alone, and is expected to pump more than $100 million into the local economy.

I’m told recruitment of the production workforce will commence in Q4 this year.

Conclusion

As we look ahead, I am so confident in the capacity and longevity of this region, a place so close to my heart, a place where the defence industry has some serious legacy.

It’s here in the Hunter, that Australian manufacturing and Australian defence capability forged an unbreakable union in the fire of WWII.

The Hunter became Australia’s major industrial production hub for manufacturing and supplying a massive range of essential war related products, making it the most important location for mainland defence.

The military operation to defend these vital industries became known as ‘Fortress Newcastle’ – the largest military defence establishment in Australia’s history.

Thousands of troops, US and Australian, trained here, and hundreds of thousands of components of the military war effort were manufactured here. 

The people of the Hunter were at the heart of this. 

Local industries worked in a synchronised push, united by the single purpose of defending our nation from assault. 

And the humble and magnificent people of the Hunter worked together – the workers, the farmers, the industrialists. The unions, the sailors, the harbourmasters, the soldiers, blacksmiths, miners, tradies and railway workers. The men and women and families of this region, mobilised and drove the defence of Australia.

It makes me proud to represent the Hunter not just in the House of Representatives, but around the Cabinet table.

We never want to be involved in conflict, but the best way to avoid this is to show we have the will and the means to fight for what we believe in, and what is ours.

The Hunter embodies that will and those means.

I thank you, and I look forward to what we can achieve together, now and into the future.