NT’s $4bn Defence industry could be in for a shake-up as part of federal review
Defence has consistently contributed billions of dollars a year to the NT economy but that could be about to change.
Business
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Territory businesses, industry groups and the NT government are eagerly waiting the public release of the commonwealth’s highly-anticipated Defence Strategic Review.
Commissioned by Defence Minister Richard Marles after May’s change of government, a previous Defence minister Stephen Smith and former chief of defence Sir Angus Houston were commissioned last year to review and advise the federal government on where to prioritise Defence investment.
It was anticipated the completed report would be in Mr Marles’s inbox this week, with its public release expected sometime in March.
Territorians potentially have an enormous amount of money invested in the outcomes of the report.
Federal budget forward estimates show the commonwealth has committed $2.9bn spending over the next four years, in addition to the $2.5bn spent in the NT on Defence projects since 2017.
NT construction company Sitzler is the Territory’s lead Defence contractor with more than 20 years experience delivering projects for the commonwealth.
In an exclusive interview with this publication, Sitzler managing director Steve Margetic said the Smith/Houston investigation was a Defence review and not an economic one.
“A pipeline of continued new investment is central to a successful NT economy,” Mr Margetic said.
“It creates opportunities for a significant number of businesses directly, and the flow-on benefits then supports an even larger number of firms. Collectively those firms provide employment for many Territorians.
“There are literally thousands of local firms delivering services and products into Defence projects right now.
“The pipeline of Defence projects currently underway, as well as those planned within their program, together represent a significant proportion of the overall investment likely in the Territory over the next few years.
“That makes it abundantly clear to us that Defence is significant to the Territory’s future.
“Our understanding is that everything is on the table as part of the review.
“There is every indication that this is one of the most significant defence reviews ever conducted in Australia, against a backdrop of a rapidly changing strategic environment to our North.
“We are hopeful that the Territory remains a focus for Defence, which certainly reflects that public commentary to date. But we all need to remain mindful that this is a ‘Defence Review’ and not an ‘economic review’, and any recommendations will be made in our countries strategic interests.
“That is why the Territory must remain engaged and connected in Canberra.”
Master Builders NT chief executive Ben Carter said industry was taking the review very seriously.
“The expectation is that the DSR will shake up and reset Defence expenditure in order to prioritise and fast track the material and facilities most urgently needed to defend Australia in the geopolitical and military environment that we currently face,” Mr Carter said.
“Any major reorganisation is likely to cause disruption and delay, pressure on existing programs and intense competition internally within Defence and from other states and territories for what the Defence Minister has recently highlighted as a limited budget.”
Chief Minister Natasha Fyles said the DSR was the largest such review in a generation and would re-examine the way Defence positioned itself to meet evolving security challenges.
Ms Fyles was confident of a positive outcome for the NT.
“While the federal government has indicated the budget is under pressure, it remains likely that Defence will look to the Northern Territory as a preferred location for investment,” she said.
“Additional investment from Defence will be good news for Territorians. Defence is already a significant contributor to the Territory economy, representing 8.8 per cent of our annual gross state product.
“This review could signal a more substantial role for Defence in Northern Australia, providing benefits that permeate through our economy and stimulate a range of industries.”
Mr Margetic said Defence was a “sophisticated client with a well-defined project delivery system” and recommended Territory businesses connect through Industry Capability NT, the Territory arm of Australian Industry and Defence Networks, Master Builders NT and the Chamber of Commerce.
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