Defence spending only received a brief mention in Treasurer Josh Frydenberg’s speech and the only new major initiative was the announcement of $9.9 billion for offensive and defensive cyber security capabilities.  He said this will create 1,900 new jobs in high technology domains such as software engineering.  However, the spending will be spread over a decade and the budget papers say the funding will be partly offset against the existing integrated investment plan.

Download the Defence budget documents here.

The funding will go to the Australian Signals Directorate – basically our electronic spy agency – and will be code named REDSPICE.  This stands for Resilience, Effects, Defence, Space, Intelligence, Cyber, and Enablers.  The funds will double the size of ASD and add considerably to Australia’s cyber warfare capabilities.  Much of the spend is outside the Forward Estimates, with something like $600 million to be spent during the next four years.

Marcus Thompson.

Former head of information warfare for the Australian Defence Force Marcus Thompson says the near-$10 billion cyber defence investment is “welcome and long overdue”, with 20 percent cyber rebates for small businesses also encouraging, but more is needed to shore up Australia’s multinational-dependent cyber resilience. He says Australia’s greatest threats come from abroad, but the bulk of our cyber investment also goes abroad – the Government needs to go further and drive a ‘buy-Australian’ mindset shift for cybersecurity services, and “more than ever, we need to build stronger sovereign capabilities at home to support our national cyber resilience in a changed world”.

“The decision to invest nearly $10 billion into Australia’s cyber defence capabilities is welcome and long overdue. It begins to recognise the threats we face in a changed global environment are more likely to come from the digital world,” Thompson said. “The additional 20 per cent rebates for small businesses purchasing cyber security systems are also encouraging – they don’t typically have CISOs, cyber security teams, or sizeable budgets like major organisations to better protect themselves from cybercriminals. Yet, small businesses’ operations grind to a halt in the event of a cyber-attack, and their position in the supply chains of Government, critical infrastructure and other key industries opens that risk to all of Australia. Money is a start, but the Government needs to go further and drive a ‘buy-Australian’ mindset shift for cybersecurity services. Our greatest threats come from abroad, but the bulk of our cyber investment goes abroad as it’s dependent on multinationals. More than ever, we need to build stronger sovereign capabilities at home to support our national cyber resilience in a changed world.”

The reaction from the cyber security industry sector has been mainly positive, with comments including the following:

Senetas CEO Andrew Wilson.

Senetas CEO Andrew Wilson said: “We strongly support the almost $9 billion funding for cybersecurity and intelligence outlined in the Federal Budget. Bolstering our cybersecurity capabilities is not only critical to Australia’s defence and economic strengths but provides a major opportunity to leverage Australian “home grown” world leading cybersecurity technologies.

“Australian companies provide some of the most advanced and threat-resistant cybersecurity solutions. They include protection of the most sensitive data and critical IT infrastructure used in government, defence, enterprise and national infrastructure such as energy and telecommunications. For example, our military grade data network encryption solutions protect much of the world’s most sensitive data and systems, including US, European and Middle Eastern allied governments and defence agencies. This budget has shown the Government understands the threat that future cyber-attacks could have on many aspects of Australian society and is prepared to seriously invest in the solutions that will be necessary to protect it.

“The war in Ukraine has highlighted cybersecurity threats as the first weapon drawn in geo-political conflict. Prior to Russia’s invasion of Ukraine, cyber-gangs and Russian state-sponsored cyber-criminals had relentlessly attacked US and numerous other allied countries’ defence and government agencies’ systems. With an increase in coercive behaviour occurring in the Indo-Pacific region, it is essential that the Australian cybersecurity industry is given the support it needs to strengthen Australia’s sovereign cybersecurity capabilities and ensure it is well prepared for the threats it may face in the future.”

ACS President Dr. Nick Tate.

ACS President Dr. Nick Tate said: “ACS is extremely pleased to see the Federal government has recognised cybersecurity as a key area in Australia’s defence posture. Protecting Australia’s digital infrastructure is essential to guaranteeing the nation’s security and keeping our industries and society running, so we welcome the cybersecurity investment. We would flag however that Australia needs a skilled workforce to maintain a robust cybersecurity sector and meet the demands of an increasingly digital economy and society.

“Our Election Platform released last month proposed a range of education and training measures to grow our digital workforce and we look forward to exploring these in coming weeks. On April 12, we will be holding a debate in Canberra that will look at what Australia’s digital workforce needs in the coming years, and we look forward to hearing the government and opposition’s proposals for growing our technology sector.”

NEXION CEO Kevin Read.

NEXION CEO Kevin Read said: “We are encouraged by the multi-agency centre approach by the federal government. We regularly face cyber security mitigation tasks from our global clients, and understand the pressure placed upon them to be resilient to sophisticated attacks. The truth is that cyber security risks can only truly be mitigated by every business pulling together to create a ‘national cyber shield’ that can be a formidable deterrent to state sponsored attacks. The $9 billion initiative is a good step in that direction and we look forward to the local investment in homegrown initiatives.

“Although the threshold update to Commonwealth Procurement Rules for SMEs (from $200,000 to $500,000) will help, there’s plenty of other barriers to entry for the government to address, such as compliance. That said, we remain cautiously optimistic that these funds will even the playing field and allow smaller, niche providers an opportunity to participate. This will give Australia some home-grown cybersecurity technology that may prove crucial in defending the nation in future cyberwarfare.”

Other than this, there is very little else newsworthy in the Defence domain.  For those hoping for information about who has won the LAND 400 Phase 3 bid; or wanting some progress on who is the selected partner for the Sovereign Guided Weapons and Explosive Ordnance Enterprise the evening has been an anti-climax.  Many of the measures mentioned – such as the construction of an East coast submarine base and extending the life of the Hawk trainer aircraft – have already been announced and are long term in nature.

The government is only a few days away from setting the date for the Federal election and going into caretaker mode.  The convention is that no announcements involving new government spending occur during this period.  Unless a major national security package of measures is revealed in the next few days it could be that many important decisions will be carried over until the next government is formed.

This article will be updated as more information becomes available.

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Kym Bergmann
Kym Bergmann is the editor for Asia Pacific Defence Reporter (APDR) and Defence Review Asia (DRA). He has more than 25 years of experience in journalism and the defence industry. After graduating with honours from the Australian National University, he joined Capital 7 television, holding several positions including foreign news editor and chief political correspondent. During that time he also wrote for Business Review Weekly, undertaking analysis of various defence matters.After two years on the staff of a federal minister, he moved to the defence industry and held senior positions in several companies, including Blohm+Voss, Thales, Celsius and Saab. In 1997 he was one of two Australians selected for the Thomson CSF 'Preparation for Senior Management' MBA course. He has also worked as a consultant for a number of companies including Raytheon, Tenix and others. He has served on the boards of Thomson Sintra Pacific and Saab Pacific.


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