"Today's release of the Federal Government's Defence Industry Development Strategy (DIDS) marks a significant change in the direction of Australian defence industry policy. The clarity and precision of the Government's Defence industry priorities offers welcome guidance for industry, and we commend a range of the initiatives in support of Defence capability delivery," Innes Willox Chief Executive of the national employer association Ai Group said today.
"However, without Defence's investment plans that will be contained in a future Integrated Investment Program, the DIDS risks being another plan for a plan. In addition, the impact of the strategy on the size, shape and capacity of the sector, including critical supply chains and small-to-medium enterprises needs to be further understood.
"The DIDS provides clarity of the Government's intent in narrowing the range of (newly named) Sovereign Defence Industrial Priorities, and in defining what is meant by Australia's sovereign defence industrial base. This new level of detail will help industry to prepare, invest, and deliver on development, production, and sustainment of Defence capabilities.
"However, in recent times, there has been concern in relation to the lack of progress of defence capability projects and lack of visibility of future capability requirements. The Australian Industry Group continues to advocate that the DIDS should recognise that Australian industry is a fundamental part of the National Defence Strategy and should be released with the investment plans.
"Given the smaller range of Sovereign Defence Industrial Priorities and the broad definition of 'industrial capability', the DIDS has the potential to significantly shape the size and capacity of the sector. While there are a range of initiatives noted in the DIDS to grow the 'Tier 2' sector, they appear to lack ‘teeth’ to enable this strategy to be a success. We also seek to understand how the DIDS will complement the broader national programs, including the National Reconstruction Fund.
"Ai Group commends a range of initiatives that are contained in the DIDS, including procurement reform, export support and workforce initiatives. It will be critical that industry is involved in the design and implementation of these strategies to help underpin success.
"More broadly, there is also an expected increase in regulation across the board for the Australian defence industry, which could drive up compliance and regulatory costs. This is across a range of important issues including supplier code of conduct; energy and emissions; export control requirements; security and modern slavery. Ai Group commends the intent of these initiatives, but it will be important for Government to take a holistic approach when assessing the regulatory impact, as well as the broader impact of the DIDS.
"A strong sovereign industrial base is fundamental to the Australian Defence Force and will support increased levels of preparedness and mobilisation. Ai Group looks forward to working with the Government to ensure the impacts of the DIDS are well understood, and that a practical and workable implementation plan is developed," Mr Willox said.
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