Press conference, Canberra

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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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9 February 2024

SUBJECTS: Albanese Government investing $399 million in Ghost Bat aircraft capability, Agreement to share technology with the United States, Securing 350 high-skilled jobs across the nation.

MINISTER FOR DEFENCE INDUSTRY PAT CONROY: Good morning everyone. It's a pleasure to be here today. I'm joined by Air Marshal Robert Chipman, Chief of Air Force, Air Vice‑Marshal Wendy Blythe, Head of Air Force Capability, and Air Vice‑Marshal Graham Edwards, Head of Aerospace Systems Division. I'm also joined by Scott Carpendale, Managing Director of Boeing Defence Australia and Glen Ferguson, Director, MQ-28 Global Program.

Ladies and gentlemen, the MQ-28A Ghost Bat is a born‑in‑Australia made‑in‑Australia capability for the next generation of air combat and reconnaissance.

The Ghost Bat is the first military aircraft designed and built in Australia for more than 50 years, the first in more than 50 years. Australia leads the world in this technology which teams drones with crewed aircraft to powerful effect.

Today I'm announcing the Albanese Government is investing a further $399 million in the Ghost Bat capability. This investment will build three new next generation Block 2 Ghost Bats. They will have an enhanced design and improved capabilities. This funding boost will enable a focus on developing sensor emission payloads, an integrated combat system and autonomous systems.

But the majority of the funding will go into developing the unique Australian technology that allows the Ghost Bats to work together with each other and with crewed aircraft as one team to achieve their mission.

But we also have an agreement with the United States to share this technology and turbo charge its development. The best minds in the United States and the best minds in Australia are working together to develop the platforms, payloads, sensors and system infrastructure to realise the potential of teaming technology as quickly as possible.

Designed to act as a loyal wing man, we'll be able to protect and support our military assets and pilots and undertake a wide range of activities across huge distances, and importantly, in contested environments, including performing combat roles, including performing combat roles.

For example, it could potentially be used to support aircraft such as the Super Hornet and Wedgetail as well as the F-35 and P-8 Poseidon.

This technology has the potential to turn a single fighter jet into a fighting team, a single fighter into a fighting team, with advanced sensors that are like hundreds of eyes in the sky. Ghost Bats and other drones of the future that Air Force is working on right now will function like smart phones, to be upgraded often with new and advanced features. And again, this technology has the potential to turn a single fighter into a fighting team with this great Australian technology.

We'll be upgrading them often with new and advanced features. Over 200 companies have contributed to the program so far including more than 50 small and medium enterprises.

Today's announcement will secure 350 high‑skilled jobs across the nation, including those employed at Boeing Defence Australia and their suppliers. This is a $399 million investment in Australian Defence know‑how, and it's an investment in an industrial base that will make Australia stronger and more resilient.

The Defence Strategic Review recommended that the MQ-28 Ghost Bat should be a priority for collaborative development with the United States, and this is another DSR recommendation delivered by the Albanese Government.

The prosperity and security of our nation will always be a top priority for the Albanese Government. That's why giving our Air Force the critical capabilities it needs to protect Australians and our interests is paramount.

I'll now turn over to Scott to say a few things on behalf of Boeing.

SCOTT CARPENDALE: Thank you, Minister. Today's announcement shows the confidence the Federal Government and Air Force has placed in sovereign developed products and Australian ingenuity.

Boeing Australia is pleased to continue our partnership with the Commonwealth of Australia, Royal Australian Air Force and Australian industry in developing this mission critical capability for Australia.

The MQ-28 Ghost Bat is made possible thanks to over 55 Australian suppliers supporting the program, including our key capability partner BA Systems Australia and a number of small to medium businesses.

This latest agreement, including three more Block 2 aircraft, enables us to continue developing the MQ-28 where we will prove out the systems and operational requirements for the Royal Australian Air Force.

As we continue to expand our flight test window and advance this autonomous capability, we are also turning our attention to establishing an Australian production facility in Queensland.

And in addition to thanking the RAAF and the Government, I'd just like to thank our dedicated team, our suppliers and partners for what's been achieved on this remarkable program so far. Thank you.

MINISTER CONROY: Thanks, Scott. And just to sum up, this is world‑leading technology, designed in Australia and made by Australians. Today's announcement is a further demonstration of the Albanese Government's commitment to protect this nation and invest in world‑leading Defence capabilities.

I'll invite first questions on today's announcement, and then I'd be happy to answer other questions after we've done all questions on the Ghost Bat announcement.

JOURNALIST: Minister roughly how much is each Ghost Bat going to cost? What are we going to get with this announcement? And what do you say to pilots who are reluctant to move to more [indistinct]?

MINISTER CONROY: Well, I'll invite the Chief of the Air Force to answer the last part of that question, but on the first part, this is a $400 million announcement that will produce three Block 2 next generation Ghost Bats that will have upgraded sensors and payload capabilities. But the most important part of this investment is into the autonomous systems that give this the world‑leading ability to pair with crewed aircraft.

The goal, obviously, after the capability demonstration phase exercise next year is Boeing has a goal of being able to produce these at 10 per cent of the cost a crewed aircraft such as a Joint Strike Fighter, and this phase obviously we're investing in the development, which tends to be a bit more expensive because you're at the leading edge of the world. 

I'll invite the Chief of Air Force to talk about the second part of your question.

ROBERT CHIPMAN: Thank you, Minister, and thank you for the question. I can tell you there is absolutely no reluctance from the pilots to move into this technology. We absolutely understand that they end up being a team that is part of the future of air combat, and it is not just inspiring, but it is vital for us to be investing in this sovereign capability in Australia, so that we understand the technology and we can move rapidly towards it.

JOURNALIST: Minister, can I ask, does Australia have the capability right now to manufacture a product like this at scale beyond the three? And has Boeing committed to production beyond those three to produce them at scale potentially for export to our allies?

MINISTER CONROY: Well, since both your questions are about Boeing's ability, I'm going to invite Boeing to answer that question.

SCOTT CARPENDALE: Sure. Thank you. And thanks for the question. Boeing actually has a significant history in Australia of building components and components of aircraft for commercial production out of our Melbourne facility, and we have a large range of suppliers who actually already support production on both commercial aircraft and military aircraft across the world.

The scale and scope of our aerospace industry is better than a lot of people give it credit for. Certainly there is a scale growth that we need to go through, and we're going to be deliberate as to how we scale that to make sure we don't break our production system, but we're really confident that we've got the capability to produce both for the Australian Air Force and for international customers in time, using the technologies that we've been able to harness from commercial production and from supporting other programs, and we've got a lot of confidence in our production plan and the use of Australian suppliers.

JOURNALIST: What would be the time scale for a commercial product coming off the line as opposed to a prototype?

SCOTT CARPENDALE: So we're working through that over the next couple of years with the Air Force. As we continue to work through the capability demonstration our goal is to make sure that we have production capability in the next two to three years so that we can move to commercial production.  

JOURNALIST: [Indistinct] this Ghost Bat at all? There are rumours of [indistinct].

MINISTER CONROY: I can say those rumours are completely untrue. There have been no experiences along those lines. All platforms that have been produced are still there.

JOURNALIST: Can you just give the timeline of having this great model here to when we eventually have these finely designed Australian aircraft?  

MINISTER CONROY: Well, as Scott said, we're still in the technology development phase. The goal is to have the three Block 2 available for the really critical capability demonstration exercises next year. They'll allow Air Force to really evaluate how capable these aircraft are, how the systems work in cooperation with crewed aircraft, and then Air Force and Government will look at making decisions about further deployment.

So next year really is the critical year for these. Signing the collaborative agreement with the United States is also incredibly important. We did that last year. That will turbo charge the development, and that's another DSR recommendation that we've implemented.

JOURNALIST: Is there any AUKUS Pillar 2 tech that goes into this? I mean did AUKUS clear the way for capability that will get built into this?

MINISTER CONROY: I might invite the Chief of the Air Force to comment on that.

ROBERT CHIPMAN: So there's a potential for AUKUS technology to be employed in Ghost Bat in the future but it has ‑ Ghost Bat preceded the AUKUS agreement.

JOURNALIST: When you mention co‑development with the United States, does that mean that the US will also be involved in the funding of the development?

MINISTER CONROY: We're in early days at the moment. I think it's fair to say that the capability demonstration exercises next year will be really important to driving support for this project, but obviously the United States has a number of collaborative combat aircraft programs that this may fit into, but at the moment this is an Australian investment in an Australian designed and Australian‑made platform. And I'm really proud that it's driving support for 350 jobs in Australia.

JOURNALIST: Can you say where the ‑ this is obviously very impressive technology, but what about the cheaper disposable drones that we see having such a devastating effect in the Ukraine?

MINISTER CONROY: Okay. I'll just see, are there any other questions specifically about the Ghost Bat before I go to other questions of the day?

JOURNALIST: I have a question provided the Chief of the Air Force remains?

MINISTER CONROY: No, well, I'm actually ‑ if that's the end of the Ghost Bat questions I might ask everyone to move on.‑‑

JOURNALIST: I'd like to ask about excellence and [indistinct], and that would require the Chief of the Air Force. 

MINISTER CONROY: Oh, well, thank you.

Andrew, your question about other systems, the truth is that we've been trialling and testing a range of drones that have the potential to be armed with possible delivery across all three epochs of the Defence Strategic Review. We trialled and demonstrated armed drones last year and separately we are introducing into service an armed drone this year.

I won't go into details of the nature of that armed drone for security reasons, but I want to assure everyone in this country that we are spending lots of time working on drones with the potential to be armed.

JOURNALIST: If we're talking aircraft, and other topics, are you worried about the delay in the delivery of Australia's last batch of F-35s, and is that affecting the overall level of capability that we have?

MINISTER CONROY: The answer is no. It's not affecting our capability and we're continuing to work with Lockheed Martin and the rest of the [indistinct] supply chain.

JOURNALIST: Why didn't [indistinct] ask the Chief of the Air Force about whether Defence's culture of excellence is lacking?  

MINISTER CONROY: Well, I'm accountable for the Department of Defence, as is Deputy Prime Minister Marles, and as the Deputy Prime Minister said yesterday, we are working with the whole Department of Defence for that culture of excellence. The truth is when you had under the Coalition Government six Defence Ministers in nine years, their culture suffered.

Let's be frank, goldfish have longer lives than Coalition Defence Ministers, and that impacted on performance. Under Peter Dutton there were 28 major projects running 97 years late and $6.5 billion over budget. We've made no secret of the fact that we're intent on improving Defence performance.

The DPM and I announced six important procurement reforms in late 2022 that we're implementing right now. The Defence Strategic Review had a number of things to say about it. We're accountable for the performance of ‑ the Defence is the highest priority of the Albanese Government, and that's why I'm standing here today.

JOURNALIST: But Minister, your criticism, your criticism of the Government [indistinct] was not just of what happened before but of the existing Australian Defence Force and its bureaucracy. So what is lacking in that culture of excellence?

MINISTER CONROY: Well, I wouldn't call it a criticism, Andrew. What I say is we are striving to improve performance, and we've made no secret of the fact that we need to be faster in our decision making and faster in our delivery. The strategic uncertainty that we face at the moment means that we need to be more agile.

The Defence Strategic Review talked about flexible contracting methods, adopting minimum viable capability. They're all critical to us and bringing forward capability.

Our investment today is an example of that. Our investment ‑ the announcement I made late last year to bring forward landing craft is another example.

JOURNALIST: But the suggestion was, again, through his reporting, that Defence was ignoring the Strategic Review. Is it?

MINISTER CONROY: No, it is not. The Department of Defence is working with us every day on implementing the Defence Strategic Review. We've made no secret that we want to improve performance.

This is taxpayers' money that we're talking about, and it's critical that we get the platforms that the Australian Defence Force needs in service, on time and on budget, and the Department of Defence and the Ministers are united in that approach.

JOURNALIST: Why did you take the Department's advice holus-bolus to bury the Taipans rather than explore other options, or at least take the time to ask some serious questions?

MINISTER CONROY: Well, let's be very clear. The Taipans are no longer in flying condition. It will require a huge expenditure of time and resources to change that. The best value for money option for the Commonwealth was to sell the spare parts and dispose of the rest of the asset. And I'll refer you to what the Ukrainian Ambassador said, it's time to move on.

JOURNALIST: Is Defence facing an extra challenge here as they try to transition from their reliance on consultants and contractors, as every other department is, and they've been very reliant on them, and now they're having to meet this extra standard of excellence from the Government?

MINISTER CONROY: We've made no secret of the fact that under Peter Dutton and the Coalition Government, they ran the Public Service down. Artificial caps on public servants and over reliance on consulting diminished the capability of the entire Public Service to deliver for the taxpayers of Australia, and we're fixing that right now.

JOURNALIST: But that's a challenge, because they won't get the same pay from the department as they will elsewhere?

MINISTER CONROY: I'm very confident that our Public Service can deliver what the Australian Government is asking it to do.

JOURNALIST: Speaking of Nine Newspapers, last night they were reporting that the expected surface fleet would be here in about a week and that there will be a cut in the number of frigates, possibly down to three or six. [Indistinct] those details?

MINISTER CONROY: It won't surprise you to hear that I'm not announcing the surface fleet review response today. What I can say to you is the DPM and I have said that we'll be announcing it shortly, in the first quarter of this year, and this is an important fulfillment of another DSR recommendation.

It's no secret that we've inherited the oldest surface fleet since World War II. We're intent on putting together a plan to fix that. We are investing record amounts in Defence industry, and you'll have to wait for the further announcement.

SPEAKER: Last question, last question.

JOURNALIST: Would you necessarily be increasing capability if you reduce the number?

MINISTER CONROY: Again, I'm not going to get into speculation about what people are reporting.

JOURNALIST: You know, just philosophically speaking.

MINISTER CONROY: Philosophically speaking, Mr Probyn, what I can say to you is we are spending record amounts in the Australian Defence industry and getting equipment for the Australian Defence Force.

An example of that was when I announced at the Henderson Consolidation late last year, we were bringing forward the construction of landing craft medium and landing craft heavy. Those landing craft heavy under the previous government's plan would have been produced in 2035. We'll start making them in 2028, an advancement of seven years that reflects our commitment to continuous Naval shipbuilding in this country and a commitment for meeting the strategic circumstances we face. Thank you ladies and gentlemen.


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