Doorstop Interview, Russell Offices, ACT

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

The Hon Pat Conroy MP

Minister for Defence Industry

Minister for International Development and the Pacific

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(02) 6277 7840

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26 April 2023

SUBJECTS: Defence Strategic Review.

RICHARD MARLES, DEPUTY PRIME MINISTER: Well, today, we have had a roundtable of Australian defence industry where we've been able to discuss the significance of the Government's release of the Defence Strategic Review on Monday and the significance of Australian defence industry in bringing about the effect of the Defence Strategic Review and the Government's response to it.

We should feel very proud as a nation of the capability which exists across the full landscape of the Australian defence industry. And by that I include the manifestation of international primes who are based here in Australia, along with indigenous Australian small and medium enterprises which make a significant contribution to defence industry capability in this country. And if you think about the road that we will need to walk in terms of building a nuclear-powered submarine in this country, or the road that we will need to walk in order to establish a guided weapons and munitions enterprise in this country, both of those as examples are going to need to see significant Australian defence industry in place in order for our country to achieve the strategic capabilities that we need, both in terms of a nuclear-powered submarine and long-range strike capability. And I've got to say, there was an enormous sense of optimism around the table today about the future of Australian defence industry in light of the Defence Strategic Review, and the ability for Australian defence industry to really contribute to the sovereign industrial capability of this country.

Today, we've also announced that as part of the Government's response to the Defence Strategic Review, we will be committing over the next four years, $4.1 billion towards long-range strike and the guided weapons enterprise in this country. $2.5 billion over the next four years to actually see the manufacture of guided weapons in this country become a reality. What we inherited was a set of announcements here without any significant allocation of money. We are more than doubling the contribution that the Government is making towards establishing the manufacture of guided weapons in this country over the next four years. And we are very confident that what that will do is bring forward into the near-term the ability for our country to start making guided weapons in this country which are going to be so important to us having the war stocks and the capabilities that we need in the future. Because what's become clear from the war in Ukraine is that unless we are manufacturing guided weapons in this country, then we will not be able to get the capabilities that we need. In addition to that, we've announced $1.6 billion over the next four years to increase the expenditure on existing strike capability. In January, we announced the purchase of the HIMARS system. This will see a doubling of that through the additional $1.6 billion over the course of the next four years, which will give us a potent capability within the next couple of years, when it comes to long-range strike. This is the Government acting with pace. From the moment that the Defence Strategic Review and the Government's response to it was announced on Monday, here we are on Wednesday, taking the very first step in making sure that the outcomes of the DSR become a reality.

PAT CONROY, MINISTER FOR DEFENCE INDUSTRY: Thanks, Richard, and just a couple more details to clear up some stuff that's out there. Firstly, on the guided weapons enterprise, what we're talking about is a concrete plan being delivered to Government early next year to enable us to start manufacturing guided weapons in around two years’ time from now. In around two years’ time from now. Concrete plans and funding to start manufacturing in around two years time. Importantly, this is in stark contrast to the last government that allocated very little money and had no plan. No plan, very little money, and a timeline of 2027 that they had no ability to meet. You've heard of buy now and pay later. The last government had buy later and pay never. And that's what they had in guided weapons. We've got a concrete plan. We've got funding now allocated, $2.5 billion to begin missile manufacturing in this country, guided weapons manufacturing in this country in around two years’ time.

And this backs up our earlier interventions around guided weapons and long-range strike. It was this Government that intervened late last year to bring forward the acquisition of the HIMARS systems. If we had not intervened and brought that forward, there's a good chance we would have lost our spot in the production queue, given the huge demand for these systems out of the lessons from Ukraine. And it was this Government that signed earlier than planned the contract to acquire Naval Strike Missiles from Kongsberg to equip our frigates and destroyers. And now part of the DSR recommendation is the acquisition of Joint Strike Missiles that will allow us to look at manufacturing the Strike Missile family of missiles in Australia. Two concrete early actions to demonstrate this Government's commitment to long-range strike and guided weapons as part of our reshaping of the Australian Defence Force.

My final point is one of the key messages we delivered to industry today, something they were really receptive of, is the sea change in defence acquisition. One of the key recommendations of the DSR was for us to embrace minimum viable capability as a key part of our acquisition program. This means two things; one, making sure that the ADF gets the equipment they need as soon as possible, rather than letting the perfect be the enemy of the good. This is critical in our strategic circumstances. And secondly, by looking at an iterative upgrades process, we give Australian industry the best possible chance to be part of the solution for the ADF. By looking at minimum viable capability, developmental programs have a lot more credibility, and that means more work for Australian industry. And that was a really positive message that Australian industry received today.

MARLES: Great. Questions?

REPORTER: When will an Australian manufactured guided missile be able to be fired by the ADF? And, if I may also, the DSR is pretty light on detail on unmanned aerial capabilities, there’s just mention of the Ghost Bat. Are you pinning your hopes on this capability to be Australia's first combat drone?

MARLES: Well, let's start with the latter first. Ghost Bat, we think, is a really important project, and the DSR acknowledges that, as does the Government's response to it. There is a broader conversation in the DSR which the Government accepts about the importance of uncrewed autonomous systems, and not just aerial systems, but land and sea as well, as being part of the the future of combat. And so we absolutely see that Australia needs to be a part of the innovation associated with that, which is why translating innovation into operation is one of the six key priorities that we announced on Monday in our response to the DSR. But we absolutely see that autonomous systems are a huge part of the future.

The first part of your question in relation to the manufacture of guided weapons – I mean we inherited, frankly, from the former government a whole lot of announcement and rhetoric here, with virtually no allocation of resources at all. What was proposed was the possibility of seeing manufacturing start in relation to guided weapons in 2027. That is too far into the future. The $2.5 billion that we are putting on the table today – not months from now, but today – two days after the announcement of the DSR, we're putting that money on the table today is a complete game changer in Australia being able to enter the manufacture of guided weapons in the future. And we anticipate, as the Minister has just said, being able to do that within the next couple of years. And that is critically important in developing this industrial base in Australia, because having that industrial base in Australia is ultimately essential to achieving the strategic objective of having the war stocks that we need in relation to long-range strike in the future.

REPORTER: Sorry can I just clarify, two years until you start manufacturing, or two years until these missiles are able to be used by the ADF?

MARLES: Well, to be clear, the former government was not seeing manufacturing start until 2027. We are confident that with the $2.5 billion that we're putting on the table for local manufacture, that we will be able to get into manufacturing much sooner than that, in the next couple of years. There is also $1.6 million for – sorry, $1.6 billion, I should say, very different number – $1.6 billion in place to see the purchase of long-range strike, obviously from overseas, which would see a doubling of the purchase of the HIMARS system, which would give us a potent capability in force in the next couple of years.

REPORTER: Given that you're reducing the number of Australian made Infantry Fighting Vehicles, the number of Australian made Self-Propelled Howitzers, what's the logic for proceeding with a $4 billion purchase of US made Main Battle Tanks?

MARLES: Well, we've made the decision that we have in relation to the Infantry Fighting Vehicles, because what we seek to do is build an Army which is much more mobile. As part of the recommendations that were made in the Defence Strategic Review, there is the bringing forward of landing craft which enable us to have a Defence Force that can operate far better in a littoral environment. And that goes to the fundamental proposition of having an Army that can project. At the heart of the rationale, the strategic rationale in the Defence Strategic Review, is projection, the ability to hold an adversary at risk further from our shores. All that we are doing is about having a Defence Force and an Army which can project more. And that means a more nimble Army which is able to move, hence landing craft and making sure that the Infantry Fighting Vehicles that we do have are consistent with that. Because right now you've got a situation of a purchase of a large number – well, when I say right now, what we had prior to the Defence Strategic Review was the purchase of a large number of Infantry Fighting Vehicles which would have no prospect of ever being able to be transported beyond our shores.

CONROY: Sorry, if I can just add on the Deputy Prime Minister's point. What the DSR has recommended and what we've accepted, is a reduction in scope for Land 400 Phase Three Infantry Fighting Vehicles to fund the acceleration and expansion of purchase of Australian made landing craft, both medium and heavy, and Australian made guided weapons to equip the Australian Army. So, let's be very clear about that – reduction in scope of Infantry Fighting Vehicles to fund more Australian made items, particularly landing craft and guided munitions. And that's what the DSR has recommended and that's what we've accepted.

REPORTER: The Review made it very clear that the ADF should be the last resort when it comes to disaster recovery. But there are communities claiming that there are certain capability gaps that only the ADF can fill. How are you going to manage those expectations? And can we expect to see an announcement on Friday in relation to the creation of a disaster agency?

MARLES: Well, if Australians find themselves in an emergency situation where Defence has a unique capability to bring to bear, it will always be there. Defence is always going to be there helping out. And the idea that Defence is the last call that is made is actually not a new idea. That's how it is imagined right now. So, this is not about removing Defence from response to natural disasters. Defence is always going to be playing a part. But the point really is that in a world where we are seeing more fire and more flood in this country, we need to be thinking through and making clear that Defence is not the first call that's made, it's the last. And we need to be working much more closely with states and territories about building their own resilience to events of this kind. Now, we're speaking very closely with Murray Watt, the Minister for Emergency Management, who in turn is leading a conversation with the states and territories about building their own resilience. Defence will always be a part of this. We get that, and it needs to be. But it needs to be the last call rather than the first.

REPORTER: The northern air bases are only agreed in principle by the government, despite the Review saying that work should commence immediately, why is this? And how quickly can we expect the northern bases in WA to be strengthened?

MARLES: Well, making our Defence Force more able to operate from our northern bases is one of the six priorities that we announced on Monday. From here Pat and I head off to Darwin. The northern bases are fundamentally important and are a huge opportunity for our country. We should see them as a critical asset in terms of enabling us to project, which is at the heart, as I said, of the strategic direction of the Defence Strategic Review. We have announced a process by which a number of more granular decisions will be taken in the lead up to the first National Defence Strategy next year. This is the architecture around strategic thought, which replaces intermittent defence white papers, which is what we've seen in the past, and having a much more structured biennial National Defence Strategy, which we accept. And we are not delaying that, we're actually making the first of those next year. And obviously there will be decisions taken in the context of that. But working on our northern bases is a fundamental priority right now, which we are getting on with right now. Thank you.


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