Defence Industry

Post Pandemic Policy Paper

Defence Industry

Post pandemic policy paper

Kate Louis
Head – Defence & Industry Policy
kate.louis@aigroup.com.au

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Strong and competitive defence industries aligned with national defence objectives are critical to Australia’s national interest. The COVID-19 crisis has been an important test for Government, Defence and Defence industry to determine how well Australian Defence industry, supply chains and industry policy can stand up to strategic shock and overall, the Government, Defence and defence industry response has been positive.

The recently released 2020 Defence Strategic Update and 2020 Force Structure Review are welcome initiatives to help provide strategic and funding certainty for Defence and the Australian Defence industry.

While the Government and Defence responses to the COVID crisis have been effective, the pandemic has highlighted the fact that we do not have a sufficient understanding of the depth and breadth of our Defence industry supply chains: neither do we understand the source of origin of many component parts.

This is an important time to review both the resilience of supply chains and Australian Defence industry policy. The last policy statement was released in early 2016 in the Defence Industry Policy Statement. It is timely to review this document in light of the strategic changes post pandemic, looking at how we can best balance the concept of self-reliance with what is affordable and what makes sense from an economic perspective.

To progress an update to our Defence industry policy, as well as test and develop strategies for the supply chain, we recommend the following directions:

  • Ensuring the 2020 Force Structure Plan considers ADF capabilities that could be largely built and maintained by Australian industry, which would also help drive a new era in Australia’s Defence industry;
  • More detailed information to support the 2020 Force Structure Plan and public release of Defence’s Integrated Investment Program. It is critical that the Government release an updated Integrated Investment Program, particularly given the last public document was released in early 2016. The Integrated Investment Program gives industry the information it needs to invest and skill its workforce to support delivery of capability for the Australian Defence Force.
  • Development of an updated Australian defence industry policy reflecting our new circumstances and post COVID-19 environment, underpinned by the concept of Australian Defence industry as a national strategic asset for the country.