Opinion Piece - The Defence Sector and Regional Australia: Prospects For Economic Development

Key Points:

• Regional Australia has the potential to increase its participation and footprint with Defence by harnessing its talent and niche capabilities to value-add to Australian defence industry and national security.

• Defence bases are the focal point of the community in many regional locations, and play a key role in providing direct employment and procurement opportunities. 

• Although Defence’s supply chain is heavily reliant on industry clusters located primarily in urban centres, the Commonwealth Government is looking to encourage and support regional and Indigenous business participation in the national defence supply chain. 

When I became Minister for Defence Industry back in 2019, I made a commitment to every small business in regional Australia, from the Hunter Valley in the east to Geraldton in the west. I wanted to ensure that they were given every opportunity to play a role in the development of Australia’s sovereign defence industrial base. This included identifying and maximising opportunities for Aboriginal and Torres Strait Islander participation in major Defence projects, whether through workforce, capability or procurement. 

Political Economy of Defence 

As a proud West Australian who grew up in Kalgoorlie, I know that there is a wealth of experience in regional Australia that Defence can, and should, make use of. Everywhere I have travelled within my own vast Durack electorate and elsewhere in regional Australia, I have delivered the same message. I am committed to backing regional businesses as part of Defence’s push to enhance its self-reliance. 

Our plan for strengthening Australia’s sovereign defence capability and manufacturing may seem ambitious, but I am certain that if we work together, we will achieve our goal. This means making defence industry in regional Australia stronger and more competitive, both at home and abroad. 

The Centre for Defence Industry Capability (CDIC) helps regional small businesses across Australia, connecting them with Defence to take advantage of defence market opportunities. CDIC has also delivered a number of events, including workshops, in regional communities to educate businesses on how to enter and work in the defence market. 

In February last year, I had the privilege of attending one of those workshops in Geraldton, where I spoke to businesses about defence sector opportunities available for regional Australia. The workshop also provided valuable networking opportunities and gave businesses the chance to connect with CDIC advisers and facilitators.

The wide geographical spread of Defence establishments provides opportunity for local businesses around the country to contribute significantly to the wealth and growth of regional communities. Defence bases are the focal point of the community in many regional locations, and play a substantial role in providing direct employment and procurement opportunities. 

For example, in 2020 Defence engaged 75 businesses in regional WA through Base Services Contracts, which provided a wide range of services across the Defence estate, delivering nearly $11.5m in works. Of these works, 68 were performed by small businesses in regional centres of WA, totalling $10.95m, and 82 Indigenous businesses were contracted Australia-wide to a total value of $164m. Since 2015, more than $3.7bn of Commonwealth Government contracts have been awarded to Indigenous businesses. 

I am extremely proud of the way Defence has supported regional and Indigenous businesses to become a part of our defence industrial base during my time as Minister, but there is more work to be done. 

Our $270bn investment in Defence capability over the next decade will help spur further growth in regional Australia. This includes investing in businesses today that can deliver the capability our Australian Defence Force needs tomorrow and well into the future.

Grants, like the Sovereign Industrial Capability Priority (SICP) grant program, will continue to be an important support mechanism for the CDIC in helping regional defence industry businesses build their capability for the future. At the time of writing, this program has awarded more than $47m to small Australian businesses.

The Defence Innovation Hub has also invested more than $38m with regional Australian businesses and universities to develop leading-edge technologies that will feed into future Defence capability. More than 100 jobs are supported by these innovation contracts, demonstrating how our significant investment supports, and will continue to support, regional Australia’s economic growth. 

Outreach & Programs

Regional Australia is clearly a major player in ensuring our capability of the future is fit-for-purpose and gives us a warfighting advantage. We are working harder than ever to help non-defence industry small and medium businesses who see a future for themselves in defence industry make the transition – particularly those from the mining sector. And we know that people are the key to growing our defence industry capability. 

There are numerous support programs available to industry and students nationally, including in regional Australia, aimed at developing our workforce capability. 

The School Pathways Program encourages school-aged youth to engage in STEM studies and consider future career opportunities in the defence sector, including Cable Beach Primary in Broome, which engages in the SUBS in Schools initiative. 

The Defence Industry Internship Program facilitates internships for engineering students with defence industry small businesses nationally. 

And the Skilling Australia’s Defence Industry program supports Australian businesses nationally to invest in their workforces through skilling and re-training.

As we continue on our journey to build Australia’s sovereign defence industry, we need to draw on all the resources Australia has to offer – especially the talent and capability we have in regional Australia. The work we do in partnership will ensure our ADF has the capability it needs to keep Australians safe. 

Future Considerations

Our priority investment in regional Australia is not only contributing to our country’s robust and resilient defence industrial base, but is also significantly contributing to the economic growth and wealth of our regional communities. 

This investment is safeguarding us for the future by ensuring we have the innovation and skills required for the capability our ADF needs. The Morrison Government will continue to deliver on our commitment to regional Australia by giving all businesses – no matter how big or small, no matter where they are located – a fair go and an opportunity to contribute to Defence capability.

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Published in WA Defence Review on 8 March 2021 -The Defence Sector and Regional Australia: Prospects For Economic Development