Defence industry warns review has ‘lack of role’ for local manufacturers

The Defence Strategic Review has been well received by defence and national security experts, but industry leaders warned it failed to sketch out a larger role for local defence manufacturers.

Strategic Analysis Australia founder and director Michael Shoebridge.

The Defence Strategic Review has been well received by defence and national security experts, but industry leaders warned it failed to sketch out a larger role for local defence manufacturers.

Australian Industry and Defence Network chief executive Brent Clark said the review did not sufficiently address the importance of Australia’s defence manufacturing capabilities and the sector was “disappointed”. “If you go down a regime of focusing on speed of capability, you can bypass any requirement for Australian industry involvement,” he said.

“If you bypass this, you will never increase the availability or increase the ability for Australian industry to move up the food chain.

“A lot of equipment is coming from overseas but I don’t believe it is appropriate for the government to accept this. We have a very vulnerable supply chain and we’re giving ourselves over to the whims of a foreign government.”

One of the recommendations of the DSR agreed to by the government was for Australian industry content and domestic production to be “balanced against timely capability acquisition”.

Strategic Analysis Australia founder and director Michael Shoebridge welcomed the review’s focus on modernising the army and the shift in Australian defence policy towards preserving stability in the Indo-Pacific.

But he warned that no new funding had been announced for defence, and that key capability acquisitions for the navy had also been deferred.

“Instead of putting more money into defence they said they‘ll spend more over the decade but not the next three years … this is a disconnect,” he said. “(The government is) saying this is urgent, and this needs to be done fast but there is no new money.”

“The review gets very specific with the army about the number of armoured vehicles they should buy but when it comes to the navy they say there should be another review. It means it’s just going to take a lot more time and it is probably a symptom of the review being done as quickly.”

Australian Strategic Policy Institute deputy director for defence strategy Alex Bristow said the review set out a clear direction, was ambitious and “the most important review for decades”.

Dr Bristow described the cuts outlined in the review as a “modest repurposing of capabilities” which came with a shift in focus towards a new role for the army which will see it become “more prominent in holding Chinese assets in the region far from our shores”.

“The government is at pains to say the army has not been gutted and what has been taken with one hand is being given back with another,” he said. “The army has been asked to change and some would be resistant to that.”

Retired major general Fergus McLachlan said the government hadn’t fully acknowledged the difficulty it would face in recruiting qualified personnel. “The people issue was only lightly touched on … How are we going to recruit and retain high-quality people who have knowledge of cyber security, space and submarine capabilities, when we find it hard to recruit and retain people?” he said.

University of NSW Associate Professor and former ADF senior officer of 31 years Ian Langford said he was “fairly philosophical” about the cuts outlined in the DSR.

“The army will retain the ability to be able to conduct close combat using armoured and mechanised forces, so tank capabilities, missiles and infantry fighting vehicles, self-propelled artillery – it’s got all the elements of the close-combat system,” he said.

Opposition defence spokesman Andrew Hastie said the decision not to increase the defence budget over the next four years was a major oversight: “This indicates a fundamental lack of seriousness about the strategic challenges facing this nation.”

Greens defence spokesman David Shoebridge said the review failed to explain why Australia was spending billions of dollars on the potential use of lethal force in the South China Sea to join a “US-led war” that had no bearing on the nation’s security interests.