Q&A 2024 ASPI Defence Conference

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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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4 June 2024

SUBJECTS: ASCA, Defence innovation, non-citizens serving in the military, Record spending on Defence.

JOURNALIST: Thank you very much for your keynote address, Minister. I would like to ask a little bit more about ASCA and the way that has actually been implemented versus what was the concept for Labor to take to the election, which was a little bit more along the lines of the DARPA model I think you'd say. 

Can you explain why the decision was made to put ASCA where it is within Defence and how that's working or whether that's likely to be reviewed for a little bit greater I guess industry and community involvement? I know there's a lot but being so closely managed within the Defence Department does create some inherent barriers to some of that cooperation. 

MINISTER FOR DEFENCE INDUSTRY PAT CONROY: Yes, thanks for the question. That's why it's fair to say that the policy we took to the last election was effectively an Australian version of DARPA. Now when I was sworn in to [indistinct] I had a look at it and after talking to key players I thought the model was, you know, more closely aligned with the US Defence Innovation Unit. 

I did that for a couple of reasons. The first is I heard the feedback about the previous ecosystem of grants, the Defence Industry Hub and other things where people were critical of the research, but they were saying it was incredibly painful to get in to a grant. Most people missed out, and if they were lucky enough to get one, the time for the paperwork took years, and even if there was a successful and proved up the technology, there was no transition into capability. You just had a bright idea that was further up the TLL ladder, but you had no pathway in the service. 

So we've got limited funding for Defence innovation in this country. We have increased it, so we have increased it by hundreds of millions of dollars since we've come to power, but I want to focus on things that can give asymmetric advantage in the next four to five years. 

That means being very narrowly focused on things that capability managers say if proved up will give them an advantage on the battlefield, so that's why it’s within the Defence organisation. But the quid pro quo, unlike a DARPA model, is that by having the capability managers involved at the start, we nail their feet to the floor, when means when the technology gets proved up, it has to have a funded pathway into service so that it doesn't die in the valley of death of innovation. 

And the best example is Ghost Shark, where we funded it through DSTG and Navy, and the new IIP is funding it into full rate production, and that full rate of production will be achieved by end of 2025. 

So for me, yes, there are some limitations of having it embedded into Defence organisation, but for me, the pay‑off of having capability managers having ownership over it, and secondly, having the IIP funding it into service outweighs those disadvantages. 

JOURNALIST: Hi, Ben Westcott from Bloomberg. Thanks for your speech, Minister. Just wanted to ask about the announcement today that citizens from other countries can serve, you know, New Zealand, US, UK citizens can serve in our military in coming years. Just asking a question that goes across your portfolios. Have you thought about expanding that out to our Pacific neighbours, potentially allowing Pacific non‑citizens to serve in our military? 

MINISTER CONROY: We have, and I'm very enthusiastic about that. So what we'll be doing is, that announcement today will also allow permanent residents from countries within the Pacific to serve in the military after ‑ from 2025 onwards. That's not all we're doing. We're also exploring other options of having Pacific Island residents serve in the Australian Military. I think that's a win‑win, and we've got many Pacific leaders who are very keen to do that. 

So first step is obviously New Zealand, which is a Pacific country, but other Pacific countries, permanent residents of those countries within Australia will be able to apply to join next year, and then there's other pathways that we're still developing with other options. 

JOURNALIST: Thank you, Minister, good morning. Thank you very much for your keynote. A quick question about if I could on AUKUS Pillar II in particular. You mentioned that you made great progress government to government in Pillar I. 

I wonder, and I've just come from the Shangri‑La dialogue over the weekend where the Chinese Defence Minister was pretty clear in his statements of intent over Taiwan, as indeed was the last one last year, same sort of conversation [indistinct]. But do you think governments are doing enough in Pillar II to mandate outcomes in order to accelerate the pace of delivery? By that I mean is it not time for the three governments to be able to decide that they're prepared to take the best agreed from whichever of those three nations is necessary in the lead in order to accelerate progress? 

MINISTER CONROY: Well, Sir Nicholas, I'd like to say that we're doing that right now. So your idea is spot on, and ASCA's leading the first electronic warfare challenge, and that is that concept of challenging all three industrial bases, put forward the best ideas of the specific area, in this case it's electronic warfare, and then we're going to pick from those three options. We may combine the three, we may work collaboratively, or we may say this option is the best and we'll fund that in service. So that's a key way forward. 

Another one is obviously we're already sharing algorithms around sound signatures on our P- 8 Poseidon so that's an AUKUS Pillar II initiative. It's fair to say AUKUS Pillar II has the challenge that it's less discrete than Pillar I. Pillar I is very clearly what we're doing. Pillar II is a bit broader, and so there's been a challenge to try and find discrete tasks for the work on. We've now landed on that electronic warfare as the first one, and I'm hoping that that model will be transitioning through to other domains.

STEVEN BAXTER: Okay. Steve Baxter from Beaten Zone Venture Partners. On the ASCA comparison to the previous grant base funding regime, where the essence of innovation essentially is lots and lots of ideas from the bottom up, do you see a risk of moving from that to basically anointing experts to pick winners for our nation's defence? 

MINISTER CONROY: No, and the answer is we have to pick winners; we have to pick winners for two reasons: one, time demands that. We do not have the time for lots of blue sky ideas to bubble up. We've got a broader industrial ecosystem that supports that, we've got the CSIRO, we're got the R&D tax incentive that is all designed to support blue sky research. We've got our university ecosystem for that. We don't have the time and we don't have the resources to focus on that. 

The US spends about 13 per cent of its Defence budget on innovation, the UK 8 per cent. When we came to power it was 3 per cent, we've increased it, so we've increased it quite significantly, but still not to their scale. 

So with that and the deteriorating strategic challenges, we have decided to focus on things that can be deployed in four or five years to actually give us that sense of urgency and delivery. 

So I understand why people feel like we're picking winners, we are, but I've also taken the message from industry, which is the second best answer after a yes is a fast no, and that's what we're doing, and we're doing it with ‑ we announced a project around sovereign uncrewed aerial system last year, we announced it in August. We've funded 11 companies in October, we had a fly‑off in April, and that will flow through to a funded project. 

So we're moving at speed and part of that speed is being much more focused on what we can do in the here and now and that's really the focus in the NDS and the IIP. I must say I was a bit disappointed in some of the commentary in the ASPI Cost of Defence. We are delivering additional capability funded out of the IIP in the next two years, not in the next two decades, in the next two years, with Ghost Shark, with GIMLRS, there's five years for general purpose frigate, accelerating HIMARS, all those capabilities, Tomahawk being integrated. All those things are being filled in the next few years because the funding in the new IIP, not in two decades time. Rant over. 

I'm getting the hurry up, so thank you very much for having me. Have a good day.  


JOURNALIST: That was a bit subtle. Thank you, Minister Conroy, for the frank feedback. 


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