AUSTRALIA is set to provide key military hardware to a global defence market which is growing rapidly as uncertainty spreads.
The product we are likely to be selling to allies and other acceptable buyers won’t be massive death machines. More likely they will be the equipment which makes military operations more efficient.
And the money involved is huge and the potential manufacturing boost massive.
United States President Donald Trump will boost his defence spending and reports forecast a $US716 billion rise in his 2019 Budget.
Australia has niche manufacturers which could get a significant share of that monster spending. There are some 3000 Australian companies serving defence requirements and hoping to get some of the bounty.
The Turnbull government is spending $200 billion over 10 years on defence industries, but the domestic market is not big enough to sustain the manufacturing through peaks and troughs.
That’s the thinking behind the $3.8 billion backing for exports announced today by Prime Minister Malcolm Turnbull.
Almost every appraisal of our defence industry begins and often ends with the Bushmaster, the prized local-grown troop carrier made in Bendigo by Australian Defence Force contractor Thales.
The Bushmaster is a successful example of a company taking skilled aim as a small defence sector and occupying it. But it’s not the end of the defence manufacturing story.
CEA Technologies make top-level radar equipment, including the Active Phased Array Radar used by the RAN. It has also exported to the US, Europe and the Middle East.
Another company is Austral, based in Perth, which has built its “multi-mission surface warfare combatants” such as its Littoral Combat Ships for the US Navy.
Hundreds of companies are contributing to an ongoing naval shipbuilding program including nine frigates, 12 submarines and 12 offshore patrol boats.
In the air, Australian companies are involved in the support for the RAAF’s F-35A joint strike fighter.
Companies can’t send off military hardware to just anyone.
There are controls to ensure the buyers don’t offend Australia’s foreign policy, strategic and humanitarian priorities. For example, no matter how much money the Taliban might offer, it won’t be getting any Australian equipment.
Sales are overseen by the Defence Export Controls which has final say on the destinations of items designed for, or adaptable to, military use — or those which are just plain lethal.
The DEC also keeps watch on exports of “items and technologies that may be used or adapted for use in a military program or contribute to the development and production of chemical, biological or nuclear weapon systems”.
No other industry has greater government involvement in what can be produced and who can buy it.
One government priority will be on compatibility with the military gear of allies such as the US, Canada and New Zealand and other countries described by Defence Industries Minister Christopher Pyne as part of the “rules based international order”.
The growth in military sales is seen by the Government as critical to rescuing Australia’s manufacturing industry following the closure of car makers, a key economic and political objective.
“This is all about Australian jobs,” said Prime Minister Turnbull today.
And the Government’s commitment to the military push will be unprecedented, extending well beyond the $3.8 billion loan support. There will be a diplomatic strategy behind it as well.
Minister Pyne said there will be “target markets” with staff in embassies receiving special training to push the Australian defence product.
“We’ll put more money and effort into trade shows and long-term plans and strategies,” he said today.