Speaking at the HunterNet Defence Conference in Newcastle earlier this week, Mike Kalms - a partner, advisory at KPMG, noted interstate rivalries as a major challenge for Australian defence industry.
"It worries me that individual States or Territories might try to jump on the first project, just because it's an early win," said Kalms.
"They may not have the best capacity for that particular project compared to another State, but they want that first contract.
"Instead, they should be focused on what they can achieve and look at the long term projects that could benefit not only their state, but Defence.
"There'll be other challenges to industry too, especially in the short term."
Kalms listed the short term dip in Defence spending and project mobilisation delays as other potential hurdles for the industry.
But it wasn't all doom and gloom, as Kalms was also quick to point out the opportunities for the industry.
"There are over 40 Gate Approvals planned for this financial year. And a $1.6 billion*, 10 year investment which should largely flow to Australian companies and entrepreneurs prepared to collaborate and deliver Defence outcomes," he said.
Plus, an "alignment with the anticipated new Capability Life Cycle providing a simpler and more streamlined approach to capability acquisition, with greater opportunities for industry to insert unsolicited ideas".
"However, I've heard it a few times already today, and it really concerns me - all the talk of State versus State. I hope it changes," said Kalms.
*$230m for the Centre for Defence Industry Capability (CDIC), $640m for a Defence Innovation Hub (DIH) and $730m for the Next Generation Technologies Fund (NGTF).