The release of the Government's response to the Defence Strategic Review represents a major shift in direction, trajectory and ambition for Australia's defence posture and capability, Innes Willox, Chief Executive of the national employer association, Ai Group, said today.
"Implementation of the Defence Strategic Review will rely on industry as a key partner for success," Mr Willox said.
"The Review makes significant adjustments to our force posture and associated infrastructure, with major follow-on recommendations for defence capabilities. This will set the foundations for our defence and national security for a generation to come.
"Neither Australia's strategic goals nor implementation of the Defence Strategic Review can be achieved without industry. It is imperative that government and industry work together to deliver the defence capabilities that the Review identifies, underpinned by a clear industrial strategy. Australian industry is ready for this challenge.
"The Australian industrial base produces world-class capabilities. With the right investments, it stands ready to meet the requirements of the Review. The focus on enhanced domestic manufacturing of Guided Weapons and Explosive Ordnance, as well as the ongoing commitment to continuous shipbuilding, is positive.
"However, there is urgent work to be done to ensure we have the right business and policy settings for success. There will need to be a clear shift in thinking within Defence to allow for Australian- based industry to play its role to deliver on the Government's agenda.
"Russia's invasion of Ukraine has demonstrated the vexing capacity constraints faced by the defence supply chains of our allies and partners. Australia has a role to play in helping to support the defence industrial base of democracies.
"To do so, there must be a fundamental shift in defence thinking and policymaking to successfully deliver on the Review agenda, with a particular focus on four areas:
"First, major reforms to accelerate the acquisition process. We welcome the Review's focus on procurement reform and note that, at present, Australian defence procurement is geared for peacetime. Yet, as the Review makes plain, our 'strategic warning time' is now far shorter than before.
"Second, a focus on strategic investment in the Australian defence industrial base that closes gaps in critical supply chains. The Government's proposed Defence Industry Development Strategy should target technology transfers that unlock our capability to design, manufacture and export where there are local and/or allied constraints and chokepoints.
"Third, address the chronic skills shortages afflicting the defence industry sector. As the AUKUS submarine project has revealed, the civilian workforce is as important as defence personnel in delivering advanced capabilities. A comprehensive strategy – authored together by industry, training providers and all levels of government – should offer a 10-year roadmap for providing the defence workforce Australia will need.
"Finally, defence industry needs to embrace new technological trends. Digitalisation, automation, artificial intelligence and the clean energy revolution will remake global industry, and defence industry as well. Australia is well-positioned to lead if we can seize emerging opportunities in areas where we have demonstrated or potential competitive advantages.
"There also needs to be clear long-term political bipartisanship to ensure Australia stays the course, and industry has certainty to make long-term investments in capability that will be required.
"Time is of the essence, and our strategic circumstances mean we cannot afford to fail," Mr Willox said.
