Uncertainty in Pacific & Ukraine strategic shock adds to need to adjust national security settings

"The recent Russian-Ukrainian conflict has profound implications for the global security order, including Australia's own national security. The deteriorating situation has become a wake-up call for an urgent update of our national security settings, resourcing decisions and our procurement processes," Innes Willox, Chief Executive of the national employer association Ai Group said today.

"Concerning developments in our own region adds further ballast to the need to act strategically and swiftly.

"The Ai Group Defence Industry Policy pre-election statement released today considers these growing and unpredictable threats and what the national response should be. It discusses the delivery of a new national security strategy matched with measures to lift value for money and an updated investment program for Australian Defence Force capabilities.

"The COVID-19 pandemic has illustrated two critical fundamentals for future planning: in times of crisis, countries will generally act in their national self-interest; and supply chains underpinning defence capability are vulnerable to disruption. 

"A revitalised Defence procurement process is therefore needed for speed and agility to respond to evolving threats within our limited warning time. While the strategic circumstances have changed with a growing sense of urgency, Australia has not yet adequately mobilised itself to respond to these threats.

"In order to support a strengthened national security position, Ai Group recommends a review of strategy and resourcing for Defence and national security purposes, as well as the development of a Government procurement system that can match the urgency of a worsening security situation.

"Ai Group recommends focussing on three key areas: 

1)    Development of a new national security strategy matched with an updated investment program for Australian Defence Force capabilities to meet the growing threats.

2)    Reform of the Defence capability development, acquisition and sustainment system, including:

• lifting constraints for Defence and industry during times of imminent threat and to help ensure surge capacity;
• reviewing Australia's strategic reserves, war stock and rapid response capability, and replenishing as necessary;
• taking a more agile approach to capability development, acquisition and sustainment, and ensuring industry is a true fundamental input to capability throughout the capability life cycle; and
• proper engagement with industry in the AUKUS process, including convening an urgent industry partnership roundtable with the US and UK.

3)    A new approach to expand and protect our defence sovereign industrial base and supply chains. This activity would involve:

• a dedicated line of effort to map Australia's defence industry supply chains, identify true sovereign capabilities and develop approaches to protect our critical supply chains;
• further development of our defence industrial capabilities within Australia to help underpin our sovereign requirements, including prioritising the development of the local defence industrial base in acquisition and sustainment decisions; 
• additional protection for Australian businesses against cyber threats through targeted government assistance for the defence industry; and
• a revitalised strategy for building the required Defence and defence industry workforce and skills.

"Ai Group encourages all political parties to endorse and adopt these strategic proposals, which have been informed by our industry consultations," Mr Willox said.

The full Ai Group pre-election Defence Industry Policy Statement is available here.