Government releases Defence Export Strategy
The Turnbull Government has unveiled its plans to unlock more jobs and investment in Australia’s defence sector with the release of the new Defence Export Strategy.
The landmark document sets out policy and strategy to make Australia one of the top ten global defence exporters within the next decade.
The ambitious plan should boost Australian industry, increase investment, and create more jobs for Australian businesses.
A strong, exporting defence industry in Australia will also provide greater certainty of investment, support high-end manufacturing jobs and support the capability of the Australian Defence Force.
The export strategy will complement the Turnbull Government’s record $200 billion investment in Australian Defence Force capability to meet growing threats in the region.
Defence Industry Minister Christopher Pyne said the strategy would smooth the ebb and flow of Defence procurement within Australia.
“One of the features, of course, of defence industry is peaks and troughs, depending on the Australian government’s demand for equipment and platforms,” he said, announcing the strategy with the Prime Minister.
“By investing in defence exports, we are giving defence industry the opportunity to see through those peaks and troughs and establish very long-term investments in their equipment, in their skills, in their workforce, in their management, in their research and development.”
The Defence Export Strategy includes several new initiatives and investments, including:
- A new Australian Defence Export Office to work hand-in-hand with Austrade and the Centre for Defence Industry Capability to coordinate whole-of-government efforts and offer a focal point for defence exports.
- A new Australian Defence Export Advocate to provide high-level advocacy for defence exports and work across industry and government to coordinate their activities.
- A $3.8 billion Defence Export Facility administered by Efic, Australia’s export credit agency. This will help Australian companies get the finance they need to underpin the sales of their equipment overseas, boosting their confidence in identifying and pursuing new export opportunities.
- $20 million per year to implement the Defence Export Strategy and support defence industry exports, including $6.35 million to develop and implement strategic multi-year export campaigns
- An additional $3.2 million to enhance and expand the Global Supply Chain program and another $4.1 million for grants to help small and medium enterprises to compete internationally.
The Government hopes the strategy will create jobs by giving Australian defence companies the support they need to grow, invest and deliver defence capability. Allied to Australia’s growing technological capability, it aims to make Australian defence exports among the best in the world.
Australia has a wide range of defence industry success stories, ranging from Thales’ Bushmaster, Hawkei and sonars to Austal’s ships and engineering and CEA’s state of the art radar, and the new export strategy will look to turn domestic expertise into foreign export opportunities.
Between $1.5 to $2.5 billion in Australian-made military technology and machinery is already exported every year, however this only amounts to about 0.3% of global defence exports. The world’s 10 largest defence exporters are the USA, Russia, China, France, Germany, Great Britain, Spain, Italy, Ukraine and Israel.
Australia was the world’s 20th largest defence exporter from 2013 to 2016 and, given that Israel, the 10th rated nation, accounted for 2.3% of global arms sales, then Australia would have to increase exports by 700% to overtake it.
However the Government believes Australia’s position on the global rankings is underestimated as the Stockholm International Peace Research Institute, which produces the most widely used international figures, tends to favour countries exporting large platforms and systems while a significant proportion of Australia’s exports are components.
Long term allies such as the USA, Great Britain, Canada and New Zealand will be the initial targets of the defence export push, alongside European NATO members and oil rich states in the Middle East.
While some opposition politicians and pressure groups have criticised the export drive on moral grounds, Defence Industry Minister Christopher Pyne underlined that prospective buyers would face stringent checks and the Prime Minister argued that “every responsible nation, including our own, sets out to have the capabilities to defend itself, whatever and however circumstances may develop in the future.”
Industry backs the strategy
Australian Industry Group Chief Executive, Innes Willox welcomed the strategy as “a significant step in helping to build the capability of defence industry to support the Australian Defence Force, grow our local industry, and promote Australia’s economic goals.”
“Defence exports are a critical underpinning in the development, growth and prosperity of our defence industry, which contributes significantly to national security and economic outcomes. The development and release of a Defence Export Strategy is recognition that the Australian defence industry depends on both domestic acquisition and development of overseas markets. At the heart of this new strategy is the partnership between Government and industry, which is crucial for breaking into overseas defence markets.
“The Defence Export Strategy provides firmer foundations for the industry’s success, including: a set of strategic goals, an emphasis on the partnership between the Australian Government and industry in pursuit of exports, and associated funding and organisational structures.
“Australian industry is already committed to the delivery of first class capability to the Australian Defence Force, and we have significant local capabilities with further potential for overseas markets.
“Australia has a number of export success stories, including the CEA radar, the Australian-designed Nulka system, Austal vessels and Thales Bushmasters. The Defence Export Strategy will allow Australia to build on these successes, and expand our defence industry and capabilities together with Defence and other Government agencies.
“The Defence Export Strategy sets out an ambitious vision for the industry to become a global defence exporter, and Ai Group looks forward to working with Defence on implementing this strategy for success.”
