Australia vulnerable until defence budgets are rebalanced

Armoured vehicles, frigates, submarines and other tools we used ‘fighting the last war’ remain critical, but can’t be the sole focus as our adversaries, including China and Russia, make major headway with grey zone warfare – including asymmetric and electronic capabilities.

While we continue to fund ‘staples’ of the battlefield, defence budgets need to be better balanced to newer and more advanced capabilities so we are prepared for the new era of warfare.

If we look at the war in Ukraine, Russians have relied heavily on Iranian Shahed drones to do extraordinary damage through both isolated attacks and swarms. They cost about US$20,000 each, making them disposable by military standards, but can still carry 40 kilograms of payload, typically explosives.

Prior, Azerbaijan’s Turkish TB2 drones defined its war with Armenia, with the latter unable to defend against them.

Beyond the overseas battlefield, our home soil is also under increasing threat. We need to harden our domestic ADF bases, and especially as we reportedly look to host nuclear-capable US Air Force B-52 bombers as a key deterrent against China, not to mention our own F-35 assets across our airfields.

The enemy threat won’t just come from complex hypersonic weapons, either. Something as simple as a drone – such as a DJI Mavic or Phantom that can be purchased at most retailers – can be strapped with equipment to steal government and military assets, and various other capabilities adversaries have.

We might have crucial allies to aid us should we need it. Though when we consider we aren’t part of NATO, nor do we have first strike, it’s apparent there must be more focus on our own priorities.

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Funding the right contracts

Every defence or military trade show comes with a showcase of Ghost Robotics dogs – they provide perfect photo opportunities. But while the ADF invests in various forms of robotics (most famously, the Ghost Bat, previously known as Loyal Wingman)and unmanned ground vehicles (UGVs), what’s missing is substantial investment in changes spanning cyber security, protection of ‘soft’ targets, and advanced technology and electronic warfare, like counterdrone. Robotics and counter-robotics are two sides of same coin, much like missiles and missile defence systems.

We need real government contracts to foster sovereign capabilities and become a defence tech world leader, and simultaneously get away from relying on imports. We are the 12^th largest defence spender globally, yet a top five importer; that investment could be better spent on home grown industry.

In the US, In-Q-Tel acts as the ‘Venture Capital arm’ of the CIA for companies with which it does business. Australia has the opportunity to structure funding options for defence companies based around performance with the ADF.

This would help to resolve the current situation whereby funding and procurement channels are missing despite common understanding amid the ‘working level’ of the ADF that this is needed.

A large number of ADF groups and personnel at various levels with whom we are engaged have expressed concerns over drone security. They have highlighted instances of trying to cut through red tape to get the equipment needed with very limited success.

They are left struggling to deal with drones moving through domestic military air space, and worse yet, it’s difficult to know with a level of certainty that all flying devices are even being spotted.

The consensus among this personnel is that a separate, major program to fund advanced capabilities – is essential for Australian defence. As it stands, it is unclear who is in charge of establishing this type of comprehensive counterdrone capability or who is responsible for funding it.

One reason for this is that counterdrone is applicable across a vast range of areas. It can apply to programs like LAND 400 (armoured vehicles), Abrams tanks, LAND 125 (soldier systems), LAND 8710 (littoral vessels) and even AIR 6500 (Joint Air Battle Management System). All of these need a level of counterdrone, but because funding is limited, any investment has to come at the expense of something else, and is therefore forgotten.

Defence is starting to focus on fostering local defence capabilities, outside of defence primes (which continue to be critical for larger programs). Small, agile local defence SMEs are able to deliver innovative solutions to Defence, but need regular work to grow their workforce and investment in research and development (R&D)

High-tech areas where defence stands to benefit if we are to see increased government contracts include Ocius and its persistent maritime surveillance Bluebottle robotic ships, Silentium and Darenmont with passive radars, and Mellori with electronic warfare, among others. And then we have a related (but separate) space industry with defence applications, which is also quickly becoming a core defence capability where we want a thriving local ecosystem through regular Defence work.

How do we ensure defence SMEs get access to such regular work? More transparency is key. Approved SMEs need to have access to Defence capability managers across all areas, along with their main interests, and ability to “pitch” their capabilities to them.

In turn, the capability managers need more empowerment and budgets to spend as they see appropriate – decentralising the spending system – as opposed to focussing budgets on single, clunky choking points like Innovation Hub. Defence can even choose to fund the development, or share the development risk by committing to purchase the end product (subject to meeting agreed specs), assuming the SME is able to develop it.

Australian defence will never outspend adversaries like China. Smart (and smaller) programs with a disproportionate and asymmetric impact must therefore become a priority for the Albanese Government and Defence Minister Richard Marles, right alongside sovereign, high tech R&D in electronic warfare and advanced capabilities.

Oleg Vornik is CEO at Australian counter-UAS company DroneShield (ASX:DRO).