Australia stands at an uncertain juncture.
In the previous year, Russia has invaded Ukraine, Australia signed the AUKUS agreement, and the Indo-Pacific has become more uncertain than ever.
Modern warfare practices in our region and abroad that were unthinkable several years ago are now publicly visible and increasing in frequency and lethality.
In Taiwan, the volume of cyber attacks on national infrastructure due to US Speaker Nancy Pelosi’s visit was 23 times higher than the previous daily record.
At the same time, unsecured communications have led to significant cyber and electronic warfare attacks in Ukraine.
Australia’s geostrategic environment has changed significantly in the two years since the last Defence Strategic Update.
Our Defence leadership must now answer the question: is the Australian Defence Force (ADF) prepared for future conflict?
Our national security efforts have been built on our alliances, but the gravity of Australia’s strategic circumstances means we cannot continue to rely solely on our partners.
The government’s strategic review must deliver recommendations to improve capability and national security by exploring mechanisms to increase Australian SME participation in defence tenders and ways to grow exports of Australian-made capability.
With important defence acquisition decisions to be made in the near term, now is the time to legislate stronger minimum sovereign defence participation requirements in platform acquisitions.
Our allies have similar policies to strengthen their industrial bases, like the Jones Act in the United States.
This law stimulates the national shipbuilding industry by requiring goods shipped between US ports to be transported on vessels that are built, owned, and operated by US citizens or permanent residents.
Australia can legislate a minimum local defence industry participation without sacrificing capability, like mandating the involvement of Australian-owned SMEs supplying bolt-on components or fulfilling ongoing maintenance. Such a policy would develop local expertise in a sustainable and controlled way.
Australia will need to buy off-the-shelf platforms to deliver capability, but the Government can also ensure Australian defence SMEs are incorporated into platform acquisitions to develop local industry expertise.
The ultimate measure of an effective sovereign defence industry is a functioning market, exporting Australian-made capabilities.
I previously called for a thorough assessment of Australia’s defence export arrangements, and this review is the opportunity to analyse the barriers impeding sovereign defence companies.
The most effective promotion of Australian-made capability is its acquisition and use by the ADF.
Ukraine identified the Bushmaster based on its performance for the ADF in Afghanistan, and the Australian-made platform has again proven effective, now countering Russian attacks.
But the government must also explore new policies that facilitate defence export opportunities now.
Foreign Minister, Penny Wong has begun revitalising Australia’s relations in the Pacific, and it is logical to start a dialogue about a targeted defence export program to improve regional capability.
The program could provide these nations with proven Australian capabilities such as the Bushmaster or DefendTex drone – free upfront, with a contractual arrangement facilitating a future trading relationship.
The benefits of building defence exports with our Pacific neighbours are broader than economic. It is also about developing relationships to shore up our regional security.
Australia can no longer afford the luxury of time in this increasingly uncertain geostrategic environment. The only option is to act now.
Our current circumstances are confronting – but equally, this presents our leaders with an opportunity to build a Defence force for our future.
Ensuring sovereign SME participation, developing defence exports, and acquiring the capabilities that we need will require record funding, but we cannot afford not to.
Having built and grown a sovereign defence SME from the ground up, I know Australian defence companies can build skills, scale, and capability. Still, national security is a joint effort.
This review must set expectations, and bring together government and the defence industry for progressive strategic alignment.
If it does not, national security efforts will remain unchanged, but this time, it may result in more than just wasted money and missed opportunities.
By Jon Hawkins
Published in The Australian Defence Special Report, October 2022