AIDN National Dinner

Speech – AIDN National Dinner

Wednesday 14 February 2018

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Good evening, it’s a great pleasure to be here at the Australian Industry and Defence Network’s annual dinner.

Let me first pay tribute to the hard work that AIDN does to represent and advocate for the interests of small and medium enterprises, particularly their role in defence industry.

AIDN plays an important and constructive part in defence industry policy development in Australia, something that is most welcome and vitally necessary.

With the great step up in defence industry under the Turnbull Government – the largest peacetime build up of our defence capability since World War Two – I expect SMEs to play an increasingly large role in delivering on that policy.

Industry – small, medium and indeed, large, will work directly with us to grow Australia’s sovereign defence capability. They will work to secure our future and distribute economic benefits to the wider Australian community.

And I’ll pause now to pay tribute to Alan Rankins, your outgoing President.

Alan, your committed advocacy for the SME community has made a real difference.

Few have more experience in the sector and a great ability to represent the over 3000 SMEs that are the backbone of our defence industry.

Welcome to the new National President, Rob Forbes. I look forward to working with you in this, our great national enterprise.

I do view our defence industry as a great national enterprise.

Everything we have and enjoy in Australia is made possible by our national security.

Our ability to defend ourselves, protect our borders, and freely navigate the sea lanes in our region, is why we can live prosperous and peaceful lives.

It is why we have community benefits such as this marvellous building that we are enjoying tonight, the Australian National Gallery.

Through here, streams of ordinary Australians and thousands of school children from around the country are able to see some of the world’s greatest artworks.

Wherever there is good government and opportunities for those who want to have a go – people such as yourselves – there are buildings like this.

The Gallery and I have something in common, in turns out.

We both date back to 1967, which is the year I was born – sadly for me, over 50 years ago. It was also the year in which Liberal Prime Minister Harold Holt announced a national gallery would be built for Australia.

It was a year that ended tragically for him just a few weeks later.

But his successor, Liberal Prime Minister John Gorton, continued his farsighted policy. The Gorton Cabinet approved the Australian National Gallery and High Court Complex in 1970.

Sir John, as many of you would know, was a former RAAF fighter pilot who had a distinguished service record in World War Two.

Defence matters played a prominent and controversial role throughout Sir John’s time as PM.

These were heady days – a time when defence technology was dramatically different, but every bit as exciting as it is today.

Men were taking rockets to the moon, and Australia was helping its ally with the project.

But at the same time as all this excitement and positivity, there was deep controversy. Our involvement in the Vietnam War was growing in unpopularity – both in Australia and the United States.

Our relationships were changing regionally and globally. Our need to move to greater independence as a nation was starkly indicated by massive changes in our region.

In defence terms, we were experiencing new, regional challenges and looking for alignments that we would need in the future.

We went on to pursue many of them to the point where they are now our reality.

Fifty years on, Australia is a big player in the Asia Pacific and takes its role very seriously.

The Asia-Pacific is where our major economic interests lie, and where we must be at the ready to make a major contribution to peace and security.

I am feeling extremely positive about 2018 and the Turnbull Government’s whole approach to defence industry.

This is going to be a great year for Australia, Australians and those working in and around this great defence industry.

I’ll outline shortly what you might expect for defence industry as this year unfolds and how, as a matter of fundamental importance to the Turnbull Government, we intend to put Australian industry, particularly small to medium industry, at the greatest possible advantage.

But before I do, let me update you on the broad directions of the Turnbull Government’s defence industry policy, and take a look at what we have already achieved – industry and government together, that is —in 2017.

I am proud to say we are well on our way to creating the vision of a strong, sovereign defence industry on the back of the Turnbull Government’s $200 billion investment. As I said, it is our greatest-ever peacetime build‑up and one we must all get behind.

Our plan is being delivered as we speak.

It will take time to bring it all home, but 2017 saw us head in the right direction, and with real results.

Last year, we released the Naval Shipbuilding Plan to outline what we need for continuous naval shipbuilding in this country.

Because continuous shipbuilding is not negotiable – it is a must have.

There can be no hiatuses, no peaks and troughs, no repeat of the appalling indecision that saw not a single naval ship commissioned over six long years of the previous government.

That was inexcusable, and avoidable.

The Turnbull Government has put an end to that.

In 2017 we announced the selection of Lendlease as the managing contractor for the upgrade to Osborne South Shipyard - this is a project which will create more than 600 jobs at its peak.

Also in 2017, we started driving capability by investing in Australia’s defence industry and innovation sector via the Centre for Defence Industry Capability, the Defence Innovation Hub and the Next Generation Technologies Fund.

These initiatives are designed to help you.

They are all about actively lowering barriers to doing business and innovating with Defence, giving industry certainty about our Defence objectives and enabling industry to plan and invest.

We’re getting on and making decisions.

A record 74 capability-related projects were approved in 2016-17 as part of the Integrated Investment Program. Before then, the highest number of approvals achieved in a year was 46 in 2011-12.

This signifies the opportunities being provided for Australian industry.

Also in 2017 I announced the strengthening of the Australian Industry Capability Plan requirements on tenderers for all major capital equipment procurements of $20 million and above.

This Turnbull government initiative not only enhances the sovereignty of our industrial base, it provides valuable opportunities for Australian companies to hone their capabilities.

2017 saw the Thales Hawkei vehicle enter into its low-rate initial production.

The acquisition contract will sustain around 210 jobs in Bendigo. Importantly, Thales has achieved Australian Industry Capability content of 55 per cent so far.

Australian SMEs like DVR, Cablex, Albins, W. E. Platt and Z.F all played an important part in that.

In August 2017, BAE Systems Australia was assigned the role as Asia-Pacific Regional Warehouse for the F-35 Joint Strike Fighter.

The JSF program is a great success story for Australian SMEs.

SMEs like Marand, Quickstep, Ferra and Lovitt are playing a key role in delivering our next generation aircraft, and just yesterday I announced that Australian businesses had won $1 billion worth of contracts in the supply chain for the construction of the Joint Strike Fighter.

This is a great vote of confidence in Australia’s defence industry, and shows our commitment to regional security.

Capability decisions for our continuous shipbuilding program remain on track and on budget.

The continuous shipbuilding program started on schedule in April 2017, with construction starting on the first Pacific Patrol Boat.

In November 2017 the Government announced that our new Offshore Patrol Vessels would be designed and built under prime contractor Lürssen.

Importantly, the build will use ASC in Adelaide for the construction of the first two ships. The project transfers to Western Australia in 2020, where the remaining ten ships will be built.

This project will directly employ around 400 Australian workers and see a further 600 jobs created in associated supply chains.

The Future Submarine Program also progressed rapidly, with Naval Group and Lockheed Martin Australia completing industry days in Australian capitals with over 1000 attendees from Australian companies.

In July 2017, the Prime Minister opened Hughes House, the Australia Future Submarines Office in France. This represented an important milestone towards successful technology transfer.

As of early this year we had 33 Commonwealth staff move to Cherbourg working from Hughes House.

Over the next few months that number will grow to 50 or more to include the staff of the Future Submarine Program as well as the staff of Lockheed Martin Australia.

We will work side by side with Naval Group France to design the Future Submarine and plan its production.

Finally, in 2017, I launched the first ever National Defence Industry Skills and Jobs Information Campaign – ‘The Workforce Behind the Defence Force.’

I hope you’ve seen the ads – they are pretty inspiring and they directly relevant to industry small and large.

Transforming our defence industry requires the Australian community – businesses, students, academics and workers to be aware and informed about the opportunities on offer.

The campaign tells people how they can get involved.

I would like to thank AIDN for your strong support of the campaign. It speaks volumes about the strong relationship between the Department of Defence and defence industry.

I was pleased to see in 2017 a range of businesses make their own investments in innovation and their Australian workforces.

In November, I attended the opening of Leidos Australia’s new $12 million research and development facility.

In the same month, Saab announced they had embarked on a recruitment drive for 250 additional workers, a direct result of our selection of Saab’s combat management system for use on all future Australian Navy ships.

Australian small and medium enterprises in 2017 did well in positioning themselves for what’s on offer.

Alert and ambitious companies were quick to access the advice and services of the Centre for Defence Industry Capability.

Jenkins Defence Systems, a company that specialises in electronic warfare products, is one example.

Thanks to a grant from the Centre, Jenkins were able to upskill their employees with specialised training, thus enhancing their competitiveness and positioning for future success.

2017 was a pretty good run-up, and saw us make great progress in capability decisions.

It heralded support for industry and involved laying out of key enablers that will shape and guide our defence industry over the next decade.

We are not about to slow down this year.

2018 will be a year of big delivery and new horizons.

I refer in particular to defence exports.

Exports are an essential part of our vision for a sustainable and internationally competitive Australian defence industry.

Companies that export are more likely to be successful. They are more likely to employ more Australians. To deliver better capabilities to the ADF.

In the past year I have been to a range of countries to promote Australian exports and build the partnerships we need to boost those.

It was abundantly clear to me on each visit that our defence industry is respected around the world for its innovation and expertise.

So I was so proud last month to launch Australia’s first ever Defence Export Strategy which is about growing our defence exports.

There are huge opportunities – but we must work strategically to seize them for Australian industry.

Thus the strategy pulls together all the levers we need for end-to-end support for Defence exports, from building readiness to identifying and realising opportunities to export.

Later this year, I will release the first ever Defence Industrial Capability Plan.

It will lay out our sovereign industrial capability priorities, our ten-year vision and plan for growing defence industry.

I want a clear and practical plan that properly informs defence industry decision-making.

I will also release the Defence Industry Skilling Strategy to match demand for defence industry capability with the right workforce and skills base.

It won’t surprise you to know the Turnbull Government will be on the front line supporting innovation.

In 2018 the Turnbull Government will also continue to provide opportunities for Australian industry to help deliver our warfighters the capabilities they need.

Already this year, a $700 million contract has been signed with Lockheed Martin Australia for the Future Submarine Combat System Design, Build and Integration, creating 200 new jobs.

2018 will see us announce the successful tenderers for the Land 400 Combat Reconnaissance Vehicles and Future Frigates.

It will see work commence on the Submarine Construction Yard at Osborne in South Australia.

There will be provisional acceptance of the second Air Warfare Destroyer, the launch of the first Pacific Patrol Boat and the commencement of construction on the first Offshore Patrol Vessel.

Australia’s next eight F-35 aircraft are scheduled for delivery in 2018.

2018 will see the United States Government choosing the repair locations for another 388 components of the Joint Strike Fighter and Defence is working very closely with industry to position Australia in the Global Support Solution. I will travel to Washington DC in April to press our case.

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2017 certainly showed just how serious the Turnbull Government is about transforming defence industry.

How it is working every day to keep our investment in Defence on track and delivering for Australian industry, workers and the community.

2018 will see us achieve even more.

We will continue to put in place the policies, the support, the guidance and the funding initiatives that allow you to help us transform Australia’s defence capabilities.

In so doing, you will help us deliver a sovereign Australian defence industry, secure our region, and provide peace and prosperity for all Australians.

Thank you -- enjoy the remainder of your evening and have a prosperous, innovative and great 2018.