The 20th annual ADM Congress, held in Canberra on 21 June, kicked off a fascinating discussion of the issues facing the Australian Defence Industry. After a moving Welcome to Country from Ngunnawal elder, Serena Williams, the day of discussions kicked off in earnest with opening remarks from ADM Group Publisher Ewen Levick. Ewen took the opportunity of ADM’s 30th birthday to launch ADM’s new 30 under 30 Awards program which aims to encourage more young people to pursue a career in the Australian Defence industry.
Opening the summit the Assistant Minister for Defence, the Hon Matt Thistlethwaite MP, welcomed the new initiative as an important contribution to addressing the industry's workforce challenges. Minister Thistlethwaite then reflected on the massive changes that Australian Defence Policy has undergone since the first ADM Congress 20 years ago. The first ADM Congress was held after the Howard Government released its Defence update on the eve of the Iraq War. At the time, Thistlethwaite said, Australia was “essentially” focused on fighting land wars in the Middle East and countering violent extremism.
Fast-forward 20 years and Australia is once again focused on what it now calls the Indo-Pacific. Climate change has emerged as a “very real” security threat and Australia has lost warning time concerning a major power conflict in Asia. In the face of these changes, Assistant Minister Thistlethwaite said, the suitability of the Australian Defence Force (ADF) needed to be examined through the Defence Strategic Review (DSR). Now that we are in the implementation phase of the DSR, he said that Australia “can’t meet the challenges outlined in the DSR without your [Australian Defence Industry] help.”
Changing requirements for industry
Chief of the Defence Force (CDF), General Angus Campbell, followed the Assistant Minister and echoed many of his key points while explaining what impact the DSR’s ‘focused force’ will have on industry priorities. The “whole point of the address” he said, was to explain the form and nature of the future Defence force that he wants defence industry to support. Defence Industry, he said, is a critical element of Australia’s national power that the DSR calls upon the government to utilise.
However, General Campbell noted, the force that industry will be supporting will be more integrated. As a result, systems across the services will need to be the “same by default, separate by necessity, and bespoke by exception”. While Australian industry will remain key, General Campbell noted that “hard choices” had to be made, and that while “it’s absolutely important” that Australian Industry is supported, specific support had to make “strategic sense”.
Chris Deeble AO, Deputy Secretary Capability and Sustainment Group (CASG), then outlined his plan to reform CASG to deliver “minimal viable capability” rather than gold-plated solutions. Citing the “Iron Triangle" of military procurement, Deeble expressed his intent to lock in cost and timeframe, leaving capability as the dependent variable. This will involve first setting CASG up for success by increasing its engagement in programs early on. Whereas now CASG becomes involved just before a project enters gate one, under reforms proposed by Deeble and agreed to by the government, it will enter before gate zero. The second element of his strategy consists of a reorganisation of CASG through the creation of Air Defence and Space, Guided Weapons and Explosive Ordnance Enterprise (GWEO), Industry Engagement and Engineering Assurance divisions.
The final pillar, which Deeble emphasised, was a goal of re-working the Defence Contracting Framework to reduce both the cost and volume of paperwork involved in doing business with Defence by more than 50 per cent. The Deputy Secretary finished his presentation with a call to industry to bare with CASG while they undertake the reforms, which he expects to take around 18 months to roll out across the entire portfolio. Ending on a high note, Deeble said that the government has agreed to roll out the new framework with the Air Defence and Space division starting early next year.
Industrial challenges facing defence
The Deputy Secretary was followed by Richard Cho, the CEO of Hanwha Defense Australia (HDA). In his presentation, he explained why Hanwha is “here to stay” in Australia even if it loses the Land 400 Phase 3 tender. Hanwha, in collaboration with the government of South Korea, has selected Australia as a strategic location for industrial investment, he said. Cho noted that, because South Korea faces existential threats from its northern neighbours, it requires secondary industrial production facilities to guarantee its security.
Air Marshal Leon Phillips followed Cho’s discussion of industrial capabilities with an exploration of the industrial challenges facing GWEO. He noted that during the height of the War on Terror, it took more than two years for supplies of ‘dumb bombs’ to reach parity with increased demand. When it comes to more complex, guided weapons, the lag time is closer to four years. These supply challenges are driving GWEOs ambition for Australia to become a manufacturer of guided munitions as soon as possible. AVM Phillips told delegates that the Minister for Defence Industry, Pat Conroy MP, had challenged him to deliver options for domestic missile production to the government ahead of schedule. He added that he was “confident” that Australia could begin manufacturing munitions in 2025.
On the industry front Alison Petchell, Acting First Assistant Secretary, Program Delivery and Industry Nuclear Powered Submarines Taskforce, explained to the audience the scale of both the challenge and opportunity presented by the AUKUS program, with a particular focus on the necessary workforce. Workforce and skills development for SSN-AUKUS, she said, begins this year and confirmed that the first Australian shipyard workers to be seconded to UK and US SSN shipyards would begin work in Q3 2023. In response to criticism about the impact of AUKUS on the Australian Defence Industry, she noted the work underway within the Taskforce to create opportunities for Australian companies within the global SSN supply chain. In particular, she referenced the creation of a trilateral SSN-supply chain coordination mechanism, which should be established later this year.
Embracing emerging technology
The Chief Defence Scientist, Professor Tanya Monro AC, spoke at length during the conference about the challenges and benefits of innovation for Defence. A key focus of her talk was the Australian Strategic Capabilities Accelerator (ASCA) which will come into being next month. According to Professor Monro, the ASCA has learnt the lessons of previous attempts at fostering Defence innovation. Namely, the need to accept risk and the need to prevent wasted effort wherever possible. Addressing the first point she said that, for the ASCA, Defence would accept much lower project success rates giving the example of a two out of 15 record being considered successful. On the second point, she said that the ASCA would engage with the end user from day one so that unsustainable projects can be weeded out before companies invest in them.
However, Professor Monro noted, ASCA is not the be-all and end-all of Defence innovation. She highlighted the importance of a national effort, including companies, universities and Defence Science and Technology Group (DSTG) itself. She explained that ASCA's job amid this ecosystem was prioritisation because, as a small country, Australia cannot afford to do things that do not “upset the calculus of the adversary”. If such a capability is identified and matured by ASCA, she said, ASCA and DSTG would find the money for it within the existing Integrated Investment Plan (IIP) citing the example of Anduril Australia’s Ghost Shark.