Minister for Defence Industry Melissa Price reflects on the new opportunities available to local businesses under the trilateral AUKUS partnership.
The AUKUS agreement is going to create decades-long opportunities for Australia’s defence industry.
As the Prime Minister has said, we will spend the next 18 months looking at how we best deliver at least eight nuclear-powered submarines for Australia.
There is no doubt that the benefits to defence industry and the wider Australian economy from our acquisition of nuclear-powered submarines will be immense.
Naturally, with a change of this magnitude, there will also be some challenges during the transition period. We will work closely with industry to support them through this.
Australia’s defence industry has reacted to the AUKUS agreement as I expected it would.
There are many businesses that are excited by the prospect of a new industry that will develop around the nuclear-powered submarines, and the potential opportunities that brings.
There are also businesses that had been readying themselves to be part of the Attack Class program and will now gain our support as they look for other opportunities.
I want to assure those businesses that I have their backs.
As has been flagged previously, Australian SMEs with contracts with Naval Group or Lockheed Martin will go through a contract termination process.
I have instructed the Secretary and Deputy Secretaries of Defence to ensure that this process ensures a resolution is reached as quickly as possible for those businesses.
There are also SMEs that did not have contracts in this program, but were preparing their business to compete with other SMEs for opportunities in it.
We must ensure that they are fully supported as they seek out those new opportunities.
To support Australian defence companies through these changes, I have directed Defence to establish a dedicated unit known as the Impacted SME Support Cell.
This cell is supporting those genuinely affected SMEs to identify other opportunities that they have set themselves up for by increasing their competitiveness.
It will use Defence’s resources to help the SMEs compete for future work in either the shipbuilding domain or in the wide array of Defence programs the Morrison government is investing in.
The $100 billion Sovereign Guided Weapons Enterprise is the key enterprise that we will try to help these businesses compete in.
Outside of submarines, this is the largest endeavour Defence has ever undertaken.
Clearly, the opportunities for Australian SMEs in the Sovereign Guided Weapons Enterprise are going to be significant.
To make industry aware of this new cell, I convened a teleconference earlier this month with groups that included all defence industry associations, AiGroup, AIDN, the Henderson Alliance in WA, Australian Defence Alliance in Victoria, the Australian shipbuilding group in Queensland, state and territory defence advocates and government officials.
Also on the line was every senior manager in Defence’s Capability Acquisition and Sustainment Group.
I wanted to hear industry’s perspectives and get their feedback.
They are the ones at the coalface, and I sincerely valued their points of view.
I also wanted to ensure industry fully understood that I would continue to fight for SMEs that were seeking new opportunities.
From the day I was sworn in as Defence Industry Minister, increasing Australian industry content has been my number one priority.
As the pandemic has demonstrated, we must have a strong sovereign industrial base, and that is the critical driver in seeking to increase AIC.
Upon taking on this portfolio I immediately identified gaps in AIC policy and the need to fix the system.
These were legacy issues that I was determined to overcome.
I have since delivered a new contracting system that has specific, measurable, enforceable, accountable and unbreakable AIC commitments.
To hold primes to account, I have delivered – from scratch – an independent audit program to hold the major contractors to account.
It is laughable to see the opposition now put forward commitments and solutions on AIC that I identified two years ago and have already delivered on.
Matt Keogh and Brendan O’Connor are merely taking what I have already delivered and trying to rebrand it as Labor policy.
We’re not going to be lectured about Australian industry content from those who were the authors of the book on the ‘Valley of Death’ on local defence industry jobs.
When Labor was last in government it gutted $18 billion from the Defence budget, cutting Defence spending to its lowest level since World War Two.
It did not commission a single Australian built ship in its six years in office, risking our Defence capability and leaving hundreds of Australians without a job.
The Morrison government continues to right those wrongs.
I have said right from the outset that my focus would be backing small business and that is exactly what I have done and will continue to do.
As a government, we will continue to back the men and women of the Australian Defence Force and the thousands of talented Australians in our world-class defence industry.
Melissa Price is the member for Durack in Western Australia, currently serving as the Minister for Defence Industry, and the Minister for Science and Technology.