Doorstop Interview, Garden Island, NSW

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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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28 April 2023

SUBJECTS: Advanced Strategic Capabilities Accelerator establishment; Defence Strategic Review; AUKUS.

RICHARD MARLES, DEPUTY PRIME MINISTER: Well welcome everyone here to Garden Island in Sydney. It's great to be here along with the Minister for Defence Industry, Pat Conroy, and Tanya Monro, who is Australia's Chief Defence Scientist. The Defence Strategic Review that was released on Monday and with the Government's response on Monday, made the observation that for a country of our size, there are many things we can't do. We can't put large armies or navies into the field, but one thing we can do is invest in asymmetric technology. And that, in many ways, this is the most value for money investment that we can make. Technologies which are disruptive, which change the form of human contest, which enable us to be on the cutting edge of that and enable us to do what we need to do in terms of having a Defence Force which projects and which meets the re-cast tasks of the Australian Defence Force. These are all observations which the Australian Government accepts. And we need to have a much greater focus on defence innovation as we go into the future.

So, today we're very pleased to announce that the Albanese Government is committing $3.4 billion over the next 10 years to establish the Advanced Strategic Capabilities Accelerator. ASCA, as it is known, will be commencing from 1 July this year and we will be putting it in place over the next 18 months. That is a huge contribution to the establishment of ASCA. What this represents, $3.4 billion, is one of the biggest Defence investments in innovation in our country for decades. It is a game changer in terms of getting the brightest and best Australian technologies into operation. And ultimately that is our objective here. We've just looked at a number of technologies that are new technologies, all built by Australian companies, small and medium enterprises. So small companies can make a huge difference here, and it's utilising the best of Australian know how in those companies and getting them accelerated so that we get them into operation as quickly as possible. Translating innovative solutions into operation is one of the six priorities that we announced as being part of the Albanese Government's focus in responding to the Defence Strategic Review and we are enormously proud of making this announcement today.

PAT CONROY, MINISTER FOR DEFENCE INDUSTRYThank you, Richard. And this is an incredibly significant day, the most significant announcement and policy change on defence innovation in decades. The United States spends 13 per cent of their very large defence budget on defence innovation, the United Kingdom spends 7 per cent. But in Australia it is only 3 per cent. And so we need to focus that spending on technology and solutions that can help our warfighters in the near and medium term. For too long in defence innovation, the money has been sprayed left, right and centre without focus. Often it's been very hard to get into grants for innovative defence industry companies and at the end of the process, when they've proved up their technology, often there hasn't been an acquisition program to fund them into commercialisation, to fund them through the valley of death to get into service. That changes with ASCA. Under ASCA, it will be working on focussed missions that warfighters have said we need help with. Missions to solve problems and to advance capability for the Australian Defence Force. Importantly, by focusing on the things that are most relevant to the ADF, that means that when the technology has been proved up, then they will be having a pathway into service through the commercialisation process, complemented by things like the National Reconstruction Fund to provide capital to grow these companies. Because ASCA will do two things; it will help solve technology challenges for the Australian Defence Force so that they get new advanced capabilities to give them greater firepower and greater protection. And secondly, it will grow the defence companies of the future. And that leads to more well paid, secure jobs for Australians in advanced technologies, in advanced engineering, in advanced equipment and production methods that will make Australia safer and put food on the table for more Australian families. This is a great day for Australian defence and it's a great day for manufacturing in this country.

MARLES: Fantastic. Questions?

REPORTER: Minister, with the Hubs, how long were these decisions taking? And with ASCA, how long would you like the decisions to take?

CONROY: So, Richard said that we will be standing up the organisation from 1 July and there is an 18 month phase-in period. But importantly, work continues right now. So, companies who have contracts under the Defence Innovation Hub, for example, will transition over to ASCA so they can complete their very important work. And over time you'll see more organic ASCA missions beginning so that work can begin. It will be very seamless and that's one of the reasons it's located within Defence, to manage that phase over period.

REPORTER: So decisions that were taking years will take months? Or were taking months will take weeks?

CONROY: We are focussed on much faster – and I'll invite Tanya to say something – but you're absolutely right. For this to work properly, we need to speed up the acquisition cycle and speed up the innovation cycle. So, we'll be getting a yes faster. And importantly for defence industry, they'll be getting faster no's. Industry have said the second best answer after a yes is a fast no. And you can expect that with ASCA, but I'll invite Tanya to supplement that.

DR TANYA MONRO, CHIEF DEFENCE SCIENTIST: Thank you, Minister. So, we have focussed on urgency in ASCA and we'll have a range of new ways to get things in more quickly. Firstly, when we see innovative technology anywhere in our ecosystem, we'll have the ability to procure it, to get it into the hands of our warfighters, to get it into exercises and trials, so that we can understand how it might contribute to the missions that the Deputy Prime Minister talked about. This is a new way of working and we are focussed on making sure that we can provide that bridge between what industry can do and what our military need it to do. So, this is a new way of working. Probably quite critical is to say that our missions, which are the centrepiece of ASCA, will not kick off unless we've identified a transition path into acquisition. That does not mean they won't fail and we'll try and fail forward so that we understand what can go wrong early and make sure that our money is spent on things that will be used by our warfighters.

REPORTER: In terms of Australian made, Australian designed, what’s the principle there? It’s not exclusive I gather, but how will that be approached?

MARLES: Well, again, I'll ask Tanya and Pat to supplement, but this is absolutely about elevating Australian know how and Australian innovation. We're trying to get Australian ideas into operation as quickly as possible. But it is really important that we are collaborating with our partners around the world, and part of how you innovate is to work with others. And that is both across disciplines, but it's also across countries. So, we'll be working very closely with our partners overseas as well. But the focus is absolutely about getting Australian technology going so that we get that asymmetric capability into the hands of our Defence Force as soon as possible, in a very mission oriented way. So that there is a focussed question which is being asked of Australian industry about the problem that we want to solve, and then going out there and having that solution found

MONRO: To supplement that, yes, it is focussed on Australia and Australian industry, but with that knowledge of where we in Australia have niche leading advantage so that we can play into global supply chains and so we can support Australian industry in being part of those global ecosystems.

REPORTER: Under the previous system, how much were we missing? How much wasn’t proceeded with that should have been?

CONROY: Well, I can say some of the feedback I've had from industry is a couple of things. One, that it was very hard to get into contract with the Defence Innovation Hub. It's a very tortuous process. And secondly, that if you'd gone through the process and your technology been proven up, often in most cases there wasn't an acquisition program to fund the commercialisation of your technology. Basically, you were forced to go overseas to actually take the next stage in the innovation cycle. That changes with ASCA. That means that there are capability champions that will then bring your technology into acquisition projects to really do the commercialisation stage. I was at Adelaide in their Precinct 14 recently and I met with a company leading the world in quantum clocks. Clocks that are a quantum level which are vital for navigation and other advanced technologies. And they said that without a specific champion within the Australian Defence Force, they wouldn't have found a path into deployment. So, that's what we're trying to do with ASCA, to have capability champions. So, the war fighter, we only fund innovation that will help warfighters and advance their capabilities. But then the reciprocal obligation is that then the broader defence organisation and the warfighters will then fund the development of these programs.

REPORTER: Minister, what does today’s announcement mean for Defence Science Technology Group? Will that change in any way as a result of this?

MONRO: This is a very exciting announcement for Defence Science Technology Group. We've been on a journey for the last couple of years of trying to come into the centre of Defence and work on Defence's most important problems. The most emblematic element of that was our STaR Shots, which where I went to our chiefs of services and garnered their biggest, hariest problems and then tried to broker across our nation responses to those problems. That work has really formed some of the foundational thinking for ASCA. And what I want ASCA to do is to challenge the broader Defence Science Technology Group to move faster and with more urgency. But by placing ASCA within that context, it should have no barriers to accessing the wonderful expertise of those two and a bit thousand defence scientists who will be able to contribute to those missions if they can work at speed.

CONROY: And if I can just please supplement it with a couple of quick points. One, at the project level, at the mission level, these missions will be run jointly between an experienced senior defence scientist, someone from the services and someone from the Capability Acquisition Sustainment Group. And at the governance level it'll be Tanya as the Chief Defence Scientist, the Vice Chief of the Defence Force representing the services and the head of Capability Acquisition Group. And the importance of that is that's bringing, as Tanya said, defence science into the heart of Defence because we need that science being deployed on ADF platforms to give our warfighters key advantages in the battlefields of the future

REPORTER: According to Defence figures there’s a 50 per cent contingency for the $368 billion AUKUS project. The Greens say the numbers are only until 2025 when Australia's due to have five of the eight submarines, so the true cost could actually be half a trillion dollars. Is that a possibility?

MARLES: So, I'm going to answer that question, but can we just, while we've got Tanya here, ask if there – but I will come back to that – but if we can ask any more questions in relation to today's announcement?

REPORTER: We’ve got some examples here, I’m wondering from a scientist’s perspective, what are we looking for that are going to assist?

MONRO: We're looking for the kind of solutions that give us asymmetry. We're looking for things that are hard to counter. We've been given six clear priorities for the whole defence innovation, science and technology ecosystem. What you see in the examples here is a nice group of technologies focussed on autonomy and removing the human from danger. That is an important continued focus. But we're also focussed on other areas like hypersonics, directed energy, autonomous intelligence and information warfare. So, there's a broad range of cutting edge science we need to bring together into these missions in order to solve the warfighter problems.

REPORTER: Is future war being fought by scientists rather than to some extent by soldiers?

MONRO: It's about making sure that we have the maximum options based on science and that we can benefit from Australia's edge in science in giving the ADF the best capability they can have.

MARLES: But I might just say science has been integral to human contest from day one. One of the great technological advances that we've seen came out of World War II. So, there's nothing new about the idea of placing science at the centre of the defence strategy. The point that we're really making is that for a country the size of Australia, where we can't put huge armies into the field or huge navies into the field, in fact, science is one of our real strengths and one of our real advantages, because it provides for an asymmetry. So, science is very much at the heart. It has always been at the heart, but it needs to be at the heart of a defence strategy for a country like Australia, and it will be going forward.

REPORTER: Once again and I know this has been a matter since Monday, but the Army has nothing to fear from this in terms of their future?

MARLES: Well, what we have announced in the Defence Strategic Review is a plan for reimagining the Army so that it has greater capability and a greater ability to engage in projection. Be that long range strike, be that being able to operate more in a littoral environment. Implementing the highest technology and the most cutting edge technology is a great thing for Army, but more importantly, it is a great thing for our national interest, and that will be our focus. Science is Australia's friend when it comes to having a defence strategy. And that's really the point of the announcement today. And in announcing a $3.4 billion commitment to the establishment of ASCA, it is the single biggest innovation commitment in defence that we have seen in decades.

REPORTER: Can you tell me what you mean by Australia’s lost the ten year warning time?

MARLES: Well, there was an observation that was made in the Defence Strategic Update in 2020 by the former government, and to their credit, that our strategic circumstances are such that we no longer have that ten year warning. That it had always been assumed, prior to that, that if any adversary wished to do us harm, we would be given a ten year notice of that. What was observed in the Defence Strategic Update in 2020 is that we are now within that ten year threat window. And that is a very big observation to make. It was the correct observation to make, but it has very much driven our thinking in terms of doing a Defence Strategic Review now, which is given, we are observing that, what does that then mean we must do as a nation in terms of posturing our Defence Force? And that has been at the heart of the work of the Defence Strategic Review, the announcement that was made on Monday and our response to it. And one of those critical answers is focusing on the role of innovation and science in the way in which it can help Australia posture its Defence Force.

REPORTER: Can I ask a clarification, what's happening with the tanks the previous administration ordered in January last year? The Abrams Main Battle Tank.

CONROY: The acquisition of that project is continuing. That is part of the Army's force structure into the future. The DSR made no recommendations around the tanks other than – that part of the force structure of the Army is set.

REPORTER: They will be acquired?

CONROY: They will be acquired.

MARLES: Are there any other questions in relation to our announcement today? If not, thank you very much, Tanya, for being a part of that.

If I can answer your question earlier, which was in relation to the contingency that we put in our funding for the future nuclear-powered submarine capability. In announcing Australia's future submarine capability and the development of it, we have been more transparent, more complete in the funding details that we have provided than has ever occurred in relation to a defence program. I make that assertion because not only have we made public the acquisition costs associated with the future nuclear-powered submarine capability, but also the sustainability costs associated with them. And yes, there is contingency built into that which represents prudent budgeting. And we budgeted right out to the 2050s, which is when it is intended that we have eight nuclear-powered submarines within our fleet. Now, the most accurate and honest way in which we describe the level of funding is that this program through its life represents an expenditure of about 0.15 per cent of GDP against an existing Defence budget which is at 2 per cent of GDP, predicted to grow to 2.2 per cent of GDP by the end of the decade. So, that gives you a sense of context about how much the nuclear-powered submarines will cost. The assertions that are being made by the Greens are frankly ridiculous and they are wrong.

REPORTER: So it’s not correct that you’ve budgeted half a trillion dollars?

MARLES: The assertions that are made by the Greens are completely wrong. And the idea that there is criticism about building contingency into the way in which we have budgeted this beggars belief, really, because that is prudent budgeting. And we've been completely transparent about that. And as I say, the way to think about the cost of this is it's 0.15 per cent of GDP through the life of the programme against a Defence budget right now, which is at 2 per cent, growing to 2.2 per cent by the end of the decade.

REPORTER: Is it a possibility that it could cost half a trillion dollars?

MARLES: What the Greens are asserting is wrong. It is plain wrong. They've got their facts wrong. So, an unequivocal answer to that question: there is contingency which is in the numbers that we have provided, and that is prudent budgeting. But as I say, there is a greater transparency associated with the way in which we have described the costs associated with acquiring a nuclear-powered submarine capability than there has ever been provided in relation to a defence program. Because we're not only talking about the acquisition costs, we’re talking about the sustainment costs, and we’ve contextualized those costs.


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