The Morrison Government and Department of Defence will be providing certainty and funding to help Australian companies through the COVID-19 pandemic, with fast-tracked payments to defence industry a key feature of initial assistance to help mitigate the effects of the global COVID-19 coronavirus pandemic.

This will mean some suppliers will receive payment up to two weeks earlier than usual.

Minister for Defence, Senator Hon Linda Reynolds said COVID-19 posed an unprecedented challenge to Australia’s defence industry, which she says makes an important contribution to Australias economy, security posture and safety.

“That is why we brought forward the payment of more than $500 million to businesses in Australia, which ensures money is flowing into the Australian economy at a time of acute pressure.” She added

Minister for Defence Industry, Melissa Price said the government was committed to ensuring Australian industry personnel were supported, so they could keep equipping and sustaining Australian troops.

“Australian small businesses are the backbone of our defence industry and we will continue to do everything we can to relieve the current pressures they’re under,” Minister Price said.

Additional measures in place include:

  • Accelerating payments to Australian suppliers by making payment as soon as possible after their invoice has been approved for payment by Defence, irrespective of the contracted payment terms;
  • Reinforcing to strategic prime contractors the important role their Australian sub-contractors play in ensuring prompt payment across the supply chain; and
  • Providing appropriate relief to contractors in circumstances of demonstrated adverse effects as a result of the COVID-19 crisis on the supply of labour, equipment, materials or services required to meet current contractual obligations.

Defence assistance also extends to the sizeable Defence estate with a continued focused on delivering capital facilities and infrastructure works across Australia to support existing and new capabilities.

Defence has proactively amended and implemented all current and future contractual clauses to provide time and cost relief for COVID-19 impacts under its construction contracts, and is finding ways to bring forward Defence activities or additional works, to provide economic stimulus to the country, and support Australian industry.

CASG encourages industry to keep communication going

Meanwhile Western Australian Defence Advocate Rear Admiral (Rtd) Raydon Gates has provided further details of support the CASG is offering defence industry companies and SMEs.

In a statement, Gates said that during a teleconference Deputy Secretary CASG Tony Fraser emphasised that defence industry activities will not slow down despite the upcoming budget pressures.

Fraser noted that the Australian defence industry “remains a priority on two counts, one – continued capability to the sailors, soldiers and airmen and airwomen on deployment and at home, and two – continued cash flow into the Australian economy.”

However, CASG has main concerns at this stage; these beingcash flow to industry and the cross border lockdowns. With respect to cash flow, CASG will now be paying invoices to the Primes within two days, it is expected that the Primes will treat their contractors with the same respect.

With regards to border lockdown, Gates says that Defence is seeking from government that Defence personnel and defence industry personnel be declared as essential owing to the present restrictions on cross border travel is a major handicap to defence industry

CASG is reviewing all projects to see if some milestones can be broken down into smaller packages and bought forward to earlier dates of completion, again aimed particularly at SME participation. To facilitate these initiatives CASG has commenced recruiting for some short-term non-ongoing positions to help handle the increased workload to achieve these goals.

Fraser stressed that CASG is aware of the pressures placed on SMEs in this pandemic crisis, and companies seeking excusable delays should submit early and that they will be looked upon favourably.

He added that if companies required letters from Defence for creditors to provide certainty and surety of long term contracts, they are requested to speak to Defence, and if financially stressed companies are approached by venture capitalists promoting sale, they are also encouraged to speak to Defence before making a decision.

About 35,000 Australians are employed in the defence industry.

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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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