Aussie defence industry baulk at push for rapid off-the-shelf

Australia’s sudden move to buy off-the-shelf military arms could affect our longer terms efforts to counter China’s regional build up.

Australia’s “need for speed” to buy off-the-shelf military arms to counter China’s regional build up has forced Australian companies to quit the manufacturing chain.

It comes as analysts expect military spend to take a hit in this week’s federal budget with cost of living and household pressures pushing the country into a guns and butter era, with no new money for weapons.

Australian Industry and Defence Network chief executive Brent Clark has confirmed he has had small to medium member firms advise they were exiting defence manufacturing. For confidentiality reasons he would not reveal how many.

An Australian Army M1A1 Abrams main battle tank during training at the Puckapunyal Military Base some 100 kilometres north of Melbourne. Picture: AFP

Mr Clark said last month’s Defence Strategic Review (DSR), the blue print for our future national security requirements, rightly criticised defence procurements in the country but it also flagged speed to capability with repeated references to considering buying off-the-shelf to get better value for time and money.

He said while the government will make available funds for projects in the next budgeted four years what was needed was a plan on how that would ensure Australian industry inclusion.

Prime Minister Anthony Albanese releasing the Defence Strategic Review at Parliament House Canberra last month. Picture: NCA NewsWire / Martin Ollman

“We have a situation right now where I know companies are exiting the defence market place because of the DSR, they don’t see any surety, they are very concerned … I have had correspondence from companies where they’ve said, they have reassessed and their intention is to not do defence work,” said Mr Clark, whose network has 1500 members.

Australian Industry and Defence Network chief executive Brent Clark. Supplied

“We know the government is under massive financial commitment pressure, the Labor government getting pulled left and right and there’s no way they could mount an argument for defence increase and not Job Seeker or other social payment areas. But every dollar you spend in Australia comes back to the Australian economy multiplied, every dollar spent in the US, UK or Japan or wherever you spend it, that’s a net loss to the Australian taxpayer.”

Security analysts have praised Defence’s reprioritsing spending but bemoaned the lack of new money to national security.

An Australian defence industry base is a priority. Picture: AFP

Former Army chief Peter Leahy said the DSR plans to shift old money to new projects and sovereign capability promises were all too “wobbly”.

“The government needs to demonstrate its intent by dollars as well as rhetoric,” he said.

“We are entering a guns versus butter era where the demand for butter in health, welfare and education is really high. I think the Labor Party is inclined that way but the demand for guns is more than the current 2 per cent of GDP with some arguing it needs to be 2.5 per cent or 3 per cent.”

Deputy Prime Minister and Defence Minister Richard Marles and Defence Industry Minister Pat Conroy in Darwin following the release of the Defence Strategic Review. Picture: Pema Tamang Pakhrin

Defence Industry Minister Pat Conroy has said a local defence industrial base was a priority. He will later this year release the Defence Industry Development Strategy outlining how the government will grow the base and workforce, geared toward more targeted projects such as missiles.

Originally published as Aussie defence industry baulk at push for rapid off-the-shelf