It’s one thing to build war fighting capability, it’s another to build industrial capability (Graeme Dunk)

Author: Graeme Dunk | The Conversation (Australian Edition) | 6 July 2020

Amid fanfare last week at the start of the new financial year the [Australian] 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”. But the Australian part of Australia’s defence industry is small, and getting smaller.

  • 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%.
  • This is backed up by the annual Australian Defence Magazine survey of the top 40 defence contractors… [noting 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.
  • 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.

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