G’Day USA: US-Australian Dialogue on Defence Industries

13 Apr 2018 Speech

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G’Day USA US-Australian Dialogue on Defence Industries

“2016–2018: this is a watershed period in the defence of Australia”

Canberra is the capital city of Australia. It was created back in 1913 to be separate from our two biggest cities, Sydney and Melbourne.

It’s cold in winter, hot in summer, and the home of much of our nation’s government and Defence leadership. It’s been my second home for the last twenty-five years when our Parliament is sitting.

But the name “Canberra” has seen rather more of the world than its namesake.

It’s travelled on the side of a number of Australian warships, but also, unusually, on the side of a US Navy warship.

In 1943 the first USS Canberra joined the US Navy, serving with distinction in the Pacific in World War Two, the Cuban Missile Crisis blockade and the Vietnam War.

The ship was named to honour a close ally, and to mark the loss of a similarly named Australian warship during the 1942 Battle of Savo Island, near the Solomon Islands.

The “Can-Do Kangaroo”, as she was known, was decommissioned in 1970.

The Bell from this great ship is now displayed at the Australian National Maritime Museum after being presented by President George W Bush to former Prime Minister John Howard here in Washington on September 10 2001 to mark the 50th anniversary of ANZUS. Just four days later John Howard invoked the ANZUS Treaty for the first time following the September 11 attacks.

I am delighted that President Trump announced that the US Navy’s next littoral combat ship, the Independence-variant LCS 30, would be named USS Canberra.

It will remain the only US navy vessel named for a city outside the United States.

That the name of our Australian capital will once again adorn a US Navy warship is a singular honour, and one we keenly feel.

That the warship in question will be built by a great Australian company, Austal, the first foreign owned company to build warships for the US Navy, is the icing on the cake.

Our Relationship

For many people on our side of the Pacific, awareness of the scale and importance of the United States to the national security and defence of Australia dates back to 1942.

At that time, within months of Pearl Harbour, Japan had captured much of South East Asia and several strategic points in the Pacific. It was in striking distance of the coast of Australia.

Extraordinary bravery and great sacrifice on the part of American sailors and naval airmen at the battles of the Coral Sea and Midway – with Australians fighting and dying at their side – rendered us safe. The Battle of the Coral Sea was the turning point in the Pacific theatre of war, and indeed has become synonymous with the description of a turning point in our modern lexicon.

Churchill described this victory as ‘the hinge of fate’.

To any thinking Australian at the time and since, the importance of these events was crystal clear.

Our reliance on the strategic umbrella of the US would be absolute.

Australia and the US could not be closer allies, particularly so in the field of national defence.

We saw this just recently, when President Trump gave another indication of the depth of the relationship, announcing that Australia would be exempted from new steel and aluminium tariffs that would have otherwise have had a negative impact on defence production.

The fact is we have been fighting, side by side, from the same global and domestic perspectives since the Battle of Hamel a hundred years ago.

On that occasion, the Americans served under the command of our revered Australian military commander, General Sir John Monash.

Considering the relative youth of both our democracies, with bicentennials in the US and in Australia having occurred in the final decades of the 20th century, it is extraordinary that we have achieved a 100 year-long relationship.

Furthermore, it is one of the great organic, cultural, social, economic and defence relationships ever likely to be shared between two nations.

On each of my visits here I have seen the relationship unfold and grow, especially within defence industry.

It has happened at both government and industry level. It has expanded in stature and productivity.

Global uncertainty is a constant that has been a core driver of our alliance for all its existence. Right now, we need to be on guard against potential threats from North Korea, pressure from those who haven’t signed up to the rules-based global order, and continuing instability in the Middle East and the Gulf

But right now the rapidity of geopolitical and technological change is unlike anything we have seen – even at the height of the Cold War.

We need every advantage to keep pace with national, regional and global security demands.

Cutting edge defence cooperation becomes an even more crucial element of the alliance at such a time.

The Australian Government, led by Prime Minister Turnbull, has thoroughly understood the significance of these paradigm-shifting circumstances. It has acted swiftly, to activate greater defence capability and cooperation with the US.

Australia has decided to both transform the capability of its front line forces, and also to build the Defence Industry to match and support that capability.

We’re doing this so we have the modern, integrated fighting force we need, to protect our own nation and play a strong role in supporting the rules based global order.

We’re doing this to ensure we’ve got the industrial base to underpin that fighting force.

We’re doing this, so we can be a better ally to the United States. One which can continue to respond with assistance when asked, to play our part in addressing the challenges of our region, and to work well with our like‑minded friends around the world.

This is a watershed period in the defence of Australia. It represents a significant and enduring change to the way we develop and sustain our defence forces.

To drive this transformation, we’ve established a significant framework to underpin this great national enterprise.

Our Defence White Paper sets the strategic direction we’re taking – possible threats, risks and how we will meet those threats.

Our Integrated Investment Plan outlines the investments we will make to ensure we’ve got the forces ready to underpin that strategy.

The Naval Shipbuilding Plan outlines how we will deliver a key plank of that Investment Program – the complete renewal of our naval fleet.

Our Defence Industry Policy Statement outlines the importance of our Defence industry and how we will give it the capability it needs, and the priority it deserves.

Our Defence Export Strategy puts Government at the right-hand of Industry as they look to sell our unique capabilities to our friends and allies.

And finally, I’ll soon be releasing our Defence Industrial Capability Plan – the plan for creating the sovereign capability and defence industries we need to maintain one of the world’s most effective and most advanced fighting forces.

What the Australian Government has done is no less than set ourselves on the course of transforming our strategic industrial base that will transform the economic capability of our nation.

It’s important that our American friends and allies appreciate our sincere commitment to this alliance, so our great national enterprise can become a shared one.

The Defence White Paper and Integrated Investment Plan

The 2016 Defence White Paper represents a revolutionary change in Australia’s approach to meeting our sovereign, regional, and wider defence obligations.

It contains explicit recognition of the paramount importance of our relationship with the United States.

It points to immediate action in the defence industry sphere, which we are delivering.

We are now embarked on the greatest revitalisation of our defence capabilities since World War II.

There is a sovereign responsibility, on the part of all of us, to contribute significantly towards, national, regional and global survivability.

Reliance on the US cannot be one way only.

Australia’s Defence spending will be expanded to 2 per cent of Gross Domestic Product by 2021. We will reach that goal a year earlier than we had planned.

Our renewal program is an investment of 200 billion Australian dollars over the coming decade.

This program, significant by any measure, will be transformative in terms of the capability it will deliver to our Australian Defence Force.

It will give us one of the most advanced air forces in the world, with the 5th Generation Joint Strike Fighter working hand in hand with Super Hornet, Growler and our own Wedgetail airborne early warning and control aircraft. The P-8 Poseidon and the Triton unmanned aircraft will work together to protect our maritime approaches.

At sea, on top of our 12 new Future Submarines, we will field the second largest AEGIS equipped surface warship fleet in the world – with 9 Anti-Submarine Warfare Frigates and 3 Air Warfare Destroyers.

On land, we are renewing our armoured vehicle fleet, with new Combat Reconnaissance Vehicles and Infantry Fighting Vehicles to join our upgraded Abrams tanks, along with the digital communications system that will get the most out of these platforms in an integrated way.

In particular we are investing in the enablers that bring that force together – communications systems, intelligence integration, sensor linkages, training areas and base facilities.

This will also deliver better balance to the alliance.

Our program dovetails neatly with President Trump’s National Defence Strategy and his National Security Strategy – which prioritises interoperability with allies such as Australia.

Naval Shipbuilding Plan

Through the Naval Shipbuilding Plan, we are committed to building our renewed fleet in Australia.

This requires a fundamental ‘step change’ in Australian industry’s ship and submarine building capabilities.

Our Future Submarines, Frigates, Offshore Patrol Vessels and Pacific Patrol Boats will be constructed in Australia – the largest Defence procurement program in our history. They follow the successful construction of our Air Warfare Destroyers and the Collins Class Submarines.

The Naval Shipbuilding Plan outlines how this ambitious project will be achieved.

Defence Industry Policy Statement

At the forefront of all our procurement programs is Australian industry.

We intend to embed not only shipbuilding, but defence industry generally, as a significant, permanent, and technologically cutting-edge component of our national economy.

Our Defence Industry Policy Statement sets out how we are considering Industry at every stage of our procurement process.

Industry is a fundamental input to capability – these are the essential inputs that are combined to achieve Defence capability.

We’ve established an Australian Industry Capability Program as our vehicle for achieving this priority.

We require tenderers to develop plans that maximise the use of Australian industry for any Defence materiel procurement of around 20 million Australian dollars or more.

The Australian Industry Capability Program does not mandate percentages or multipliers of Australian industry involvement.

But we strongly encourage international defence primes to invest in the leading capability of Australian industry.

US primes interested in joining us in this endeavour need to establish a real footprint in Australia. And to their credit, they are responding to our encouragement enthusiastically.

We want to see an Australian business, with an Australian board and leadership.

We are known for our intellectual, research and scientific capacity, which is comparable with the best in the world.

We are good at putting our industrial and academic institutions together.

By cooperating, we can improve both Australian and United States defence capabilities and apply them in an increasingly complex battlefield.

This delivers for us both economically and strategically – while strengthening our Alliance.

We know very well that Australia’s future defence capability will be underpinned by access to advanced technology, platforms and systems often sourced from the United States.

But we see our capability, our programs, as a secure, trusted and compatible augmentation of US national defence capability.

US Companies in Australia

I’d also like to pay tribute to the presence of United States companies in Australia, and their Australian-based workforces. They are a vital part of our sovereign defence industry capability.

These companies have a strong track record of pulling Australian small and medium enterprises through their supply chains.

Northrop Grumman, Boeing, Lockheed Martin and Raytheon are members of Australia’s Global Supply Chain Program.

Through it, our innovative small and medium enterprises can connect to the global market.

The supply chain program is approaching 1 billion Australian dollars in contracts for Australian small to medium enterprises.

Australia also has a number of small and medium enterprises that are fully embedded in the growing global Joint Strike Fighter fleet, with eight of Australia’s fleet scheduled for delivery in 2018.

This one platform alone has brought significant opportunities for Australian industry.

Australia has won the right to undertake Joint Strike Fighter airframe and engine depot maintenance responsibility, as well as Maintenance, Repair, Overhaul and Upgrade for the majority of the first tranche of componentry for the Asia-Pacific region.

Australia will also provide the Asia-Pacific regional warehouse through BAE Systems Australia.

We’ve already reached one billion Australian dollars in local design and production work and are on track to double this by 2023.

The Joint Strike Fighter Program has supported more than 2400 jobs across Australia, and that is set to grow to 5,000 by 2023.

This is a tremendous acknowledgement of the capabilities of Australia’s defence industry.

As the only Joint Strike Fighter Partner in the region, Australia is also prepared to provide effective and efficient support to the F35 under the next tranche of Joint Strike Fighter depot level maintenance.

Cooperating on the Joint Strike Fighter Program assists the interoperability of Australian and United States forces. It delivers a decisive advantage on the battlefield.

It is a fine example of win-win outcomes for our respective defence industries and countries.

Leveraging each other’s expertise to deliver the best capabilities is key to enhancing the Alliance.

Australia has partnered with the United States Navy in a highly successful cooperative program to jointly develop twelve P-8A Poseidon Surveillance and Anti-Submarine Warfare aircraft.

Australian industry is the backbone of Australia’s Poseidon capability, from aircraft support, to facilities design, through to future development.

The Poseidon project is worth over 5 billion Australian dollars with growing opportunities available for Australian industry in capability developments, maintenance and training.

The Nulka anti-ship missile decoy and the E-7A Wedgetail are further, great examples of Australia and United States forging industrial cooperation.

As you would appreciate, I am a very strong advocate for Australia’s defence industry in its own right. It is vital to our strategic and economic security that we can build and sustain key parts of our capability.

But in all the examples I’ve given you, I trust you can see how Australia’s defence industry is bound together with that of the United States.

The US National Security Strategy noted the need for secure supply chains, and Australia is ready and willing and able to be there, and be secure.

Australian industry is ideally placed to work with the US, to fill niche gaps in the United States’ industrial base, to offer alternative options and security for US capabilities.

And while we are doing that, the US can devote its resources to its many other priorities.

Australia will not stand still -- we will grow our sovereign defence industry capability.

By growing our sovereign defence industry capability, we are not only delivering on our investment program – we are growing in support of the United States.

Defence Export Strategy

In January, the Turnbull Government launched our first ever Defence Export Strategy.

It is designed to grow our defence exports, including to the United States.

The strategy pulls all the levers available to government and industry to provide end-to-end support for defence exports.

We are building export readiness, identifying export opportunities, and ultimately we will realise – and raise – export outcomes.

A key initiative of the strategy was the new Australian Defence Export Office.

The office is critical to the Government’s ambition for Australia to become a top ten global Defence exporter.

It will lead the drive for greater export success, working hand in hand with Australian industry.

The United States, along with the United Kingdom, Canada and New Zealand have historically been our highest priority defence export markets and that status remains in the Defence Export Strategy.

Thus we have committed more resources to specifically support Australian companies seeking to export to those countries.

Australian defence industry, with its strength in sub-systems and hi-tech niche solutions, is highly complementary to that of the United States and there is scope to contribute even more, for our mutual advantage.

Australia is also strongly supportive of the National Technology and Industrial Base approach that includes the United Kingdom, Canada, and ourselves.

The initiative will allow our four countries to explore opportunities to leverage each other’s expertise, and reduce the barriers between our defence industries.

It is recognition that as intimate and reliable partners, our industrial capabilities should be viewed and assessed together.

Doing so will enable us to explore how we can better leverage and complement each other’s strengths, and enhance our collective industrial capacity.

Defence Industrial Capability Plan

I will soon release the first ever Defence Industrial Capability Plan.

The Plan, the first of its type for Australia, will outline the Australian Government’s vision for our Defence industry – how we will build the defence industry we need to underpin and support our defence forces.

It will strategically and deliberately look at our defence industry, the opportunities for business to become involved, and the role the Government will play to ensure our defence spend builds long-term, sustainable capacity.

It will also include our plan for supporting and developing Australia’s initial Sovereign Industrial Capability Priorities – those capabilities that we will manage quite specifically across our defence planning because of their criticality to our defence capability.

Ladies and gentlemen, often we can see what’s coming, sometimes we simply can’t.

That’s why we need to be vigilant, we need our relationship to continue to be leveraged to an even higher plane than it is now.

We must maintain deep and abiding force-to-force contacts.

For example, exercises like Talisman Sabre last year, involving over 30,000 service men and women from our two countries.

In February, we had the seventh rotation of Marines through Darwin, under the Force Posture Initiatives: another testing bed for inter-operability.

A further test will be in the US-led Exercise RIMPAC – the world’s biggest international naval exercise, being conducted on our home shores, in a region of perennial, deep interest to the United States.

In that regard, let me say how pleased we all are in the Australian Government, and how pleased I am, that President Trump has nominated Admiral Harry Harris as incoming US Ambassador to our country.

After such a long and distinguished defence career with such a strong focus on the Indo-Pacific region for much of it, this is a superb turn of events.

As defence and defence industry specialists, we could not hope for a better set of eyes, a more informed regional strategist and tactician than Admiral Harris to be the chief go-between for our respective governments.

Australia sees our two nations’ defence industries as partners – complementary, collaborative and generous.

For Australia, a more robust sovereign industrial capability, one that is innovative, sustainable and globally competitive delivers for the Australian Defence Force and the great men and women who serve in it.

But it also delivers for our Allies, and there is no greater ally for us than the United States.

Make no mistake – the United States will continue to enjoy access to assured Australian supply chains, just as we stand ready to make a contribution to the resilience and capacity of the United States industrial base.

I hope the future USS Canberra ends up with the same nickname as its predecessor. The “Can-Do Kangaroo” reflects the attitude of Australians and Americans that makes us such good mates – the belief that virtue is its own reward and that with a values‑based approach to statecraft, we can achieve great outcomes for our people and the rest of the world.

Thank you.