Read The Times Australia

Daily Bulletin

It's one thing to build war fighting capability, it's another to build industrial capability

  • Written by: Graeme Dunk, PhD Candidate, Australian National University

Amid fanfare last week at the start of the new financial year the government promised to invest A$270 billion over a decade to upgrade the defence force.

It said a side benefit would be a stronger local defence industry and “more high-tech Australian jobs”.

The prime minister’s statement hastened to add that it was already strong

Australia’s defence industry is growing with over 4,000 businesses employing approximately 30,000 staff. An additional 11,000 Australian companies directly benefit from Defence investment and, when further downstream suppliers are included, the benefits flow to approximately 70,000 workers.

But the Australian part of Australia’s defence industry is small and getting smaller.

My analysis of contracts listed on the government’s Austender website shows that while the proportion of defence department contracts awarded to Australian operated firms is usually well above 60%, the proportion awarded to firms that are both Australian operated and owned is much lower, presently 11%.

It's one thing to build war fighting capability, it's another to build industrial capability Austender, authors calculations It means that while Australians are being employed on defence department projects, the use of Australian firms that develop and own intellectual property is at a near-record low. Other analysis of the same data shows that the value of the contracts awarded to Australian owned companies is increasingly lower than for foreign owned companies. This is backed up by the annual Australian Defence Magazine survey of the top 40 defence contractors. Despite the fact that in the most recent survey two of the biggest contractors declined to take part – the French-owned Naval Group Australia, which has the contract for the Future Submarine program, and the US-owned Raytheon – it has the advantage of including subcontracting relationships not shown in Austender. The survey finds that while the amount of work done by Australian-controlled companies has held up since 2015, it has been increasingly subcontracted to foreign-owned prime contractors. This subordinate role has important implications for the health of Australia’s industry and national resilience. For industry it means that Australia is denied the full economic benefits that would come from designing and running projects and owning the intellectual property. For national resilience it increases Australia’s exposure to events outside its control. Read more: Scott Morrison pivots Australian Defence Force to meet more threatening regional outlook If foreign-controlled firms withdraw, withhold or otherwise redirect assistance (or if they are directed to do so by foreign governments) it is harder for Australia’s industry to pick up the slack. The supply chain interruptions caused by COVID-19 have highlighted these vulnerabilities. Brent Clark, the national chief executive of the Australian Industry and Defence Network says he was “shocked to learn how many of our supplies are sourced from overseas and how quickly those supplies became hard to access as soon as overseas countries required them for their own purposes”. He says the industry is not asking for a free ride, but it does want to be able to compete for contracts in a fair and equitable manner. Read more: Defence update: in an increasingly dangerous neighbourhood, Australia needs a stronger security system This isn’t to suggest Australia needs to it do all. Complete self-sufficiency in defence is unrealistic. But it would deepen Australia’s war fighting capability if Australian firms had the ability to to supply and maintain much of the essential equipment we will need to use. And it would strengthen our ability to deal with other crises. COVID-19 has shown that industrial capability and resilience are intrinsically linked. The Government’s rhetoric and policies support home-grown growth. All that is needed now is commitment backed up by accountability. Louisa Minney, defence consultant, business analyst and company director, contributed to this article.

Authors: Graeme Dunk, PhD Candidate, Australian National University

Read more https://theconversation.com/its-one-thing-to-build-war-fighting-capability-its-another-to-build-industrial-capability-135640

Business News

How Businesses Can Prepare for Unexpected Power Outages

Power failures can occur quickly. The supply may be interrupted by bad weather, issues with the electricity network, damaged equipment or local construction work. This can be just a hassle for a fam...

Daily Bulletin - avatar Daily Bulletin

How Chatswood Tutoring Can Fit Into a Student’s Weekly Routine

Create a Predictable Weekly Structure A consistent weekly routine can make study easier to manage when students are balancing several subjects. Chatswood tutoring can provide a fixed learning point a...

Daily Bulletin - avatar Daily Bulletin

The Rise of Digital Marketplaces in the Australian Trade Sector

For decades, the Australian trade and construction sector operated almost entirely on word-of-mouth recommendations and local community networks. Small business owners typically relied on local newspa...

Daily Bulletin - avatar Daily Bulletin

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Sydney Academy Partnership Targets Talent Development for Travel and Hospitality

VFS Global Academy’s Australian expansion will focus on practical skills and career development thro...

How Strategic Corporate Gifting Boosts Client Retention and Team Morale

As the calendar pushes towards the end of the year, business leaders across Australia begin evalua...

The Importance of Reliable Plumbing Services During Home Renovations

A freshly renovated bathroom can make an ordinary Monday morning feel a little more inviting. The ne...

Backyard Living Options for Campbelltown Homes: What Works Best?

You know that feeling at the end of a long, busy week when all you want is a calm spot outdoors, whe...

Smart Wardrobe Storage Ideas for Small Sydney Apartments and Bedrooms

A well-designed wardrobe is one of the most useful things a home can have. It's meant to keep clothe...

Colorbond Fencing in Australia: Costs, Colours, Rules and What Actually Lasts

Drive through almost any Australian suburb built in the last thirty years and you are looking at the...

Why Your Dental Clinic Is Not Getting Enough New Patient Bookings From Google

Introduction SEO for Dentist is not just about getting a dental clinic to appear somewhere on Goo...

Low Water Pressure in Sunbury: Is the Problem Inside Your Home or Outside It?

Low water pressure is one of those problems that can send a homeowner in the wrong direction. A we...

4 Beige Rugs for Beautiful and Comfortable Wooden Flooring

Wooden flooring already brings warmth and character to a room, but a beige rug can make that found...