Posted on
The release of the Defence Strategic Review (DSR) comes as a welcome relief to the Defence industry which has been waiting to find out which Defence Projects will continue, which will be cancelled, and what new opportunities will be available.
The Defence Teaming Centre (DTC) was pleased to see a number of their recommendations have been agreed upon by the Albanese Government, which will reduce the risk to businesses operating in Australia’s Defence industry.
Despite this, the cancellation or reduction of major projects and the very real possibility that lower-priority projects and programs could still be cancelled, may cost the industry millions of dollars in lost investment. This has the DTC predicting a decline in the number of businesses working in the Defence sector due to the continued lack of commitment and certainty from government, at a time when we need to maiximise resources available to meet Defence’s requirements.
Tim Dore, Acting Chief Executive Officer at the DTC, said the DTC supports the urgency to equip the Australian warfighter with the capability necessary to keep Australia safe. However, more commitment is needed to establish Australia’s sovereign industrial capability for long-term security to the sector that sits behind Defence.
“We understand why the significant overhaul was needed. We are in a considerably different geopolitical environment than in 2020, and the DTC appreciates the Albanese government requesting the review early on in their tenure,” Mr Dore said. “However, there are numerous businesses who have lost out on work and who have lost hundreds of thousands of dollars in investments they had made to upskill their workforce and equipment based on Defence’s previous requirements, only to see the Government’s direction once again change. Neither the taxpayer nor the warfighter benefits from this indecision.
“We will be monitoring the release of the National Defence Strategy next year, the recommended review for the structure and composition of Australia’s surface combat fleet later this year and any new opportunities that become available. The DTC will work with our members to see how they can pivot their business to meet the new needs of Australia’s Defence Force. Our sector is agile, responsive and has proven to the Government that with the right support and investment, they can deliver the capability. However, speaking with our members, we know that the DSR announcement may result in many established and mature small to medium enterprises choosing to either reduce their involvement or exit the Defence sector entirely, because it is no longer financially viable and less attractive to other buoyant sectors.
“Other issues we hear from our members is that they have heavily invested in projects only to have their hard work amount to nothing. Changes and uncertainty affect industries’ confidence of investing in Australia’s sovereign capability. With the huge demand for skilled employees in all sectors, members are worried that it may be difficult for them to afford to keep Australian skilled staff when there are few manufacturing and testing opportunities on the near horizon for Australia’s Defence industry.
“What the DTC would like to see is a bipartisan approach to how the Australian Government wants to defend our shores. Australia’s Defence industry has the speed, agility and capability required to deliver to Defence; however, Australia’s Defence industry is not being given the opportunity to begin building this important design expertise due to changing Defence priorities.
“Based on what has been published in the review about the implementation of a biennial National Defence Strategy, the DSR could support a bipartisan approach. A biennial strategy should also remove the uneasiness of delivering to Defence as requirements are consistently being reviewed instead of at sporadic intervals. This, in theory, should minimise the need to cancel projects and restore confidence in the sector.”
A public version of the DSR has been released and is available to read on the Defence website.
