Defence acquisition set-up ‘not fit’ for times

Australia’s defence industry has condemned the military acquisition and sustainment system as unfit to respond to growing strategic threats.

The AiGroup’s Defence Council’s draft review submission said Defence’s capability development, acquisition and sustainment system ‘is not fit for purpose’.

Australia’s defence industry has condemned the nation’s military acquisition and sustainment system as unfit to respond to growing strategic threats, warning it is geared for peacetime, plagued by delays and overseen by unaccountable bureaucrats.

The Australian Industry Group has told the federal government’s defence strategic review that urgent reform is needed to ensure Defence gets the weapons and equipment it needs, urging greater transparency and accountability, and better co-operation with defence sector firms.

Another major industry group, the Australian Industry and Defence Network, was also highly critical of the department in its submission to the review, accusing it of taking a “stand-offish” approach to working with domestic industry players.

The Australian obtained the submissions as the review heads, former defence minister Stephen Smith and former chief of defence Angus Houston, prepared to hand their interim report to Defence Minister Richard Marles this week. The review will develop a new force structure plan to help prioritise new investment, amid increasing military co-operation between Australia and the US through the AUKUS partnership and the rotation of US B-52 bombers through Australia’s northern bases.

The final report will be presented to Mr Marles in March, when he will also receive the final report of Defence’s nuclear submarine task force.

The AiGroup’s Defence Council’s draft review submission said Defence’s capability development, acquisition and sustainment system “is not fit for purpose”, given Australia could be drawn into a military conflict with little warning. It warned there was “a lack of accountability” for project approvals and delivery that caused costly delays, and “a lack of visibility and accountability” around Defence’s capability and investment plans that made it difficult for firms to make timely investment decisions and upskill their workforces.

The submission said Defence’s Capability and Sustainment Group leaders had strong military and defence acquisition backgrounds, but lacked practical defence industry experience. It called for the government to release an updated force structure plan “with added visibility and accountability for project approvals, capability delivery and time frames”, underpinned by a funding model that reflected Australia’s strategic circumstances.

It urged Defence to shift towards “a more genuine strategic partnership with industry”, and work with the private sector to urgently develop critical supply chains. Its submission also called for the government and industry to work together to address the skilled workforce crisis affecting the Defence sector as a “matter of national importance”.

The AIDN said the department needed to improve the way it engaged with small and medium defence enterprises, improving its transparency around its procurement plans.

“The relationship with defence industry remains stand-offish, a case of us and them,” it said. “This model inhibits the establishment of the effective ecosystem both sides seek, and for as long as it permeates it will never exist.”

Its submission also called for the government to “invest meaningfully in Australian companies” to develop and sustain a national defence industry. “To have actual sovereign capability, Australia must have onshore defence industrial capability, and the development of this capability should be guided by what the Australian Defence Force requires,” it said.