Mike Kalms | Melbourne

As promised in the Defence Industry Policy Statement (DIPS) released at the beginning of the 2016, Defence has continued to take clear, positive steps towards redefining its relationship with Defence Industry.

The signature initiatives of the DIPS, the Centre for Defence Industry Capability (CDIC) and Defence Innovation Hub have now been launched by the Minister for Defence Industry.

Development of the Defence Industrial Capability Plan (DICP) is also underway. The project, which is a Department and CDIC collaborative effort, launched in November 2016 and will continue through to Government release in mid-2017.

“We want to develop a baseline picture of what Australian industry can do for Defence.”

The DICP will provide the Government’s vision for Defence industry; describe opportunities over the next 10 years, and the support available to industry working in the Defence sector.

Central to the DICP is the concept of Sovereign Industrial Capabilities (SICs), which will be developed through focused research, analysis and consultation, across Defence and defence industry. An enduring SICs Assessment Framework (SICAF) will be produced to enable the continuous identification and evolution of candidate SICs.

The SICs will be focused on the critical industrial capabilities that underpin the ADF’s warfighting advantage and ability to achieve its mission. As well as identifying the SICs, a critical development task as part of the DICP will be to determine the range of Government and Defence measures that could be implemented to ensure a SIC’s health and sustainability.

This project is a seminal piece of work and relies on strong engagement and stakeholder participation. Exactly how Defence deals with companies that are involved in SICs will be shaped through analysis and consultation, meaning that industry needs to be actively involved from the outset.

“The contribution of Australia’s defence industry to this work is essential if we are to produce meaningful outcomes. A Framework which is informed by data and built on an understanding of how Defence fosters industrial capability, will be a positive step forward for the nation,” Minister for Defence Industry Christopher Pyne said.

Initial consultation sessions and forums will be held in conjunction with each state and territory government during December to ensure that a wide range of unique and informed perspectives are captured, maximising opportunities for industry to shape future Defence investment. 

Through December and January, industry will also be asked to complete the Defence Relevant Industrial Capabilities survey. The industry version of this survey focuses on the supply capabilities of Australia’s defence industry, and will be completed by current and aspiring defence industry organisations.

“We want to develop a baseline picture of what Australian industry can do for Defence,” Minister Pyne said. “And compare it to the needs of Defence to understand and analyse any gaps.” The approach taken by Defence in developing this policy reflects the Department’s broader intent to collaborate more with industry as a Fundamental Input to Capability, and work with state and territory governments to strategically plan and develop Australia’s industrial base.

Further information on the industry forums and the surveys is available through respective state and territory governments, industry associations, or Dylan Nagle who is leading the project team.

The online survey for industry is available here.

Mike Kalms is Lead Partner – Defence Industry at KPMG Australia.