Letter to members from the AIDN National CEO

 Hello to all,

I am pleased to be writing to you for this winter edition of the AIDN National Newsletter. I hope that this finds you all well and hopefully doing well in your businesses.

We of course find ourselves still learning to work with the COVID-19 pandemic, and our thoughts go out to our friends and colleagues in Victoria that find themselves once again locked down.

Matt Keogh MP, the Opposition Spokesperson for Defence Industry has been able to contribute to this newsletter, which we of course thank him for.

The Hon Melissa Price MP, Minister for Defence Industry is looking forward to contributing to the next newsletter. 

 This newsletter follows closely on from the successful Land Forces conference, which many of you were able to attend. I unfortunately found myself the victim of a close contact from a Victorian friend, requiring me to get another COVID test and self-isolate for a couple of days which was unfortunate as I was looking forward to the opportunity to catch up with many of you.

As I have mentioned previously AIDN is in the final stages of formalising its shift to a national entity, with the target date of 01 July remaining on track. I have separately written an article for this newsletter on what this means for the organisation and more importantly you as our membership.

AIDN remains fully committed to driving the discussion and influencing the outcomes to ensure that Australian companies and in particular our vitally important SME community are able to compete for and secure work on all Defence programs.

 The Morrison Government is investing  staggeringly large amounts of money into the Defence sector and the Government should be applauded for doing this. The Morrison Government has repeatedly stated that it has a requirement to ensure the creation of a sovereign industrial base, indeed Minister Price has repeatedly gone on the public record on this issue. AIDN of course supports this 100%.

The reality now is that Australian Industry needs to understand what this sovereignty looks like, how will Governments policy ensure that this happens and what does success actually look like.

It is not yet possible to answer the question of what success looks like, we collectively need to get to the point where there is strategic plan that takes Australia from where it is today – a country where the majority of defence dollars are spent with the large multinational foreign owned and controlled defence organisations – to where Australian controlled companies are undertaking large percentages of the defence work in-country with support from the foreign entities.

Recently AIDN posted an opinion piece on the need to properly define what an Australian company is, we will shortly be posting a follow up to this piece to further generate debate on this topic. Without a considered definition then we remain locked into the reality of overseas suppliers claiming that they are Australian companies because they are here and employ Australians, yet there is no control here and that makes Australia vulnerable in these tense geopolitical times. 

The vast majority of countries have clear policies and definitions on these matters. Ultimately the requirement gets down to control. Where is control exercised, where are decisions made, where is the IP developed, who owns the IP and if the IP isn’t owned domestically what rights are there to IP usage, to name but a few of the considerations.

We need to ask the question of Government as to why so much of the Australian Defence dollar is being used to effectively mobilise the industrial base of foreign governments.

There can be little doubt that the events of 2020 and 2021 have demonstrated the need for self-reliance, we cannot simply assume that the foreign supply chains will be able to prioritise Australia in complex times, quite rightly they will look to support their domestic market in the first instance and then international markets, and we cannot guarantee where Australia sits in that supply line.

The argument that Australian industry is not up to the required standard and therefore unable to supply into these programs simply is not true. Australia’s Defence Industry has repeatedly been able to supply products of quality and proves to be an innovative industry. Recently at Senate Estimates the Managing Director of ASC stated that ASC is achieving more than 90% Australian Industry involvement for the supply chain for Collins Class submarines, given this fact why are we seeing resistance to including Australian suppliers into the major defence programs? Australia has world leading industry in a number of areas, all of which could supply to the Defence market. The need to design Australian industry into these programs from the outset should be a fundamental requirement.

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