Textron bannerA new report sets a path to building genuine sovereign defence capability for Australia, recommending the Department of Defence cultivate Australian defence prime contractors and create a new $1 billion fund to acquire capabilities and services from medium and small Australian companies for defence purposes. The research was commissioned by the Australian Industry Defence Network (AIDN) and the Sovereign Australian Prime Alliance (SAPA).

The report, Developing Australia’s Defence Industrial Base, details eight recommendations to the Department of Defence and Australian Government to grow Australia’s defence industrial base, in the interests of strengthening Australia’s deterrence capabilities, improving our self-reliance, and becoming an active contributor to our AUKUS alliance.

The paper argues, achieving these objectives will de-risk the nation as we face our most challenging strategic outlook since World War II.

The eight recommendations in the report are for the Australian Government to:

  1. declare the intent to establish Australian defence industry primes;
  2. establish a Government Defence Industry Steering Council;
  3. produce a new definition of ‘industrial sovereignty’;
  4. revise the Commonwealth Procurement Rules to recognise economic security and industrial sovereignty as ‘value for money’;
  5. change Defence core processes and structures to enable and grow direct partnerships with Australian companies;
  6. create a new $1 billion budget line to fund sovereign capabilities and services from medium and small Australian companies for defence purposes;
  7. make AUKUS Pillar Two – Advancing the Capabilities of the U.S., UK, and Australia – deliver now, by setting industry to work; and
  8. replace the fruitless search for the perfect lists of ‘Strategic Capabilities Priorities’ and detailed industry plans with practical priorities.

The report examines Australia’s strategic challenges in the context of increasingly expansionist, policies of the People’s Republic of China and the growing grey-zone warfare tactics being perpetrated against Australia and our allies.

Underscoring the geo-political context is Australia’s increasingly important role in the Indo-Pacific, our AUKUS partnership, and concerns expressed by the Albanese and former Morrison governments through the Defence Strategic Review and Defence Strategic Update, respectively.

It also proposes a deeper working partnership between Australian companies, government ministers and the Defence organisation, driven by the urgency of our strategic environment and focused on results that strengthen Australia’s military deterrence capability and national security.

The paper asserts its recommendations will see Australia shore up its defences by building a stronger industrial base centred on stronger manufacturing capabilities, a multi-pronged approach to reducing supply chain risk – including greater stockpiles of key resources – and building a stronger sovereign defence industry underpinned by Australian primes.  The paper argues this would lower Australia’s current overdependence on multinational primes which may be required to support their home nations during a major conflict, potentially at Australia’s expense.

The report looks at examples of how comparable countries, with lower GDP and – in many case – smaller defence budgets, have built highly capable defence industries when faced with strategic threats and uncertainty.  These include Israel, South Korea, Sweden, and Turkey, all of which have become defence export powerhouses.

“Even our most trusted security partners will be stretched in the event of a regional war.  So, Australia must have more independent capacity to defend ourselves and to be a strong partner with our allies”, said Rob Nioa, CEO of NIOA, a member of SAPA and one of the paper’s co-sponsors. Nioa underscored how Australian industry is ready to step up to support Defence and the Government meet the current challenge. “Give us the tools and we will finish the job.  In this case the tools are the conditions that will allow strong Australian owned and run defence prime companies to emerge and thrive.”


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  1. Good news as long it isn’t lost in political interference. Self reliance is absolutely critical – the more we can invest in innovation and development of world leading systems the better.

  2. A Government Defence Industry Steering Council.
    More jobs for the boys, more committees, more meetings, more announcements then what?
    Defence doesn’t seem to know what to do with the advice it gets now.

  3. We have had Australian Industry Content, then Australian Industry Capability, Priority Industry Capabilities, Strategic Industry Capabilities and then Sovereign Industry Capabilities but a significant lack of will to actually enforce the stated outcomes, relying on good will of the Primes to do the right thing particularly by giving preference to Australian Industry.

    Then there were the taxpayer funded innovation schemes that by and large went to Primes..

    Sorry it sounds like rhetoric.

    • It sound like that to me to . But we have to start somewhere. At the outbreak of WW2 the industries to build arms was non-existent and we had to rely on Lend Lease . We need to bring our industries on line now . The technology that went into a tank today is far more and takes more precision than the 1940s and add to that the educational requirements to fill some of the positions and the fact we spent the last 30 years pushing our industries off shore will make the cost very high. Even some of the industries that were privatised may have to be taken back.
      I hope we can do it before anything starts.

  4. The recommendations of this report are all things that should be self evident. It is about time someone informed the Government that Australia’s Defence Industry is where they should invest their money instead of propping up the U.S. Industry Base. So far all the Australian Public has seen on National Sovereignty is a lot of promises and broad assurances but nothing tangible. The Government and it’s Departments work for Australia, not the U.S., not the U.K. and nobody else. It’s about time they realise that.

    • Agree. Don’t forget that as part of AUKUS we will be transferring – without conditions – $4.7 billion to the US for them to spend on their own industry. I think that’s totally outrageous, but no one here seems to care.


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