Building on the foundation laid in February 2016 with the release of the White Paper, Integrated Investment Plan, and Defence Industry Policy Statement, Minister for Defence Industry Christopher Pyne this week released the Defence Industrial Capability Plan.
The new document compliments the aforementioned guidance alongside the National Shipbuilding Plan, released last year, and the Defence Export Strategy released in January this year.
At first glance, one can cynically assume that the SICs and PICS (strategic or priority industry capabilities) framework has just had a makeover. In his remarks at the launch, Minister Pyne was at pains to explain that this was not the case.
“This Plan introduces an initial list of Sovereign Industrial Capability Priorities,” Pyne told the audience, which was complete with an impressive array of captains of industry, ambassadors, foreign defence attaches and media. “The term sovereignty means different things to different people, but in the national defence context, it is the ability to independently employ defence capability or force, when and where required. That said, our defence sovereignty is enabled by industrial capability sourced both within Australia and overseas.
“Thus we will continue to leverage the US and the international market for many major platforms and systems in order to deliver the best capability to our warfighters. The Government is fully committed to Australian participation to the highest extent possible.
“In approaching the consideration of Sovereign Industrial Capability Priorities, we have focused on a definition that covers access to, or control over, the essential skills, technology, intellectual property, financial resources and infrastructure within our defence industrial base.
“The priorities are described at a capability level, rather than a company or technology level. This approach will encourage innovation in existing technologies and provide flexibility in supporting new developments across the Integrated Investment Program capability streams and within individual projects.”
The 10 initial Sovereign Industrial Capability Priorities are:
- Collins Class submarine maintenance and technology upgrades
- Continuous Shipbuilding Program (including rolling submarine acquisition)
- Land Combat Vehicle and technology upgrades
- Enhanced Active and Passive Phased Array Radar Capability
- Combat clothing survivability and signature reduction technologies
- Advanced signal processing capability in Electronic Warfare, Cyber and Information Security, and Signature Management technologies and operations
- Surveillance and Intelligence data collection, analysis and dissemination, and Complex Systems Integration
- Test, Evaluation, Certification and Systems Assurance
- Munitions and Small Arms Research, Design, Development and Manufacture
- Aerospace Platform Deep Maintenance
The government envisions that unlike the former PICs and SICs framework, these SICPs will be seen as a coherent whole in terms of planning support across the full breadth of the Capability Life Cycle. They will be incorporated into Australian Industry Capability Plans and will each have their own performance and implementation reporting streams which will be rolled out from mid-2019 onwards.
Pyne was also blunt in his explanation of what the Plan means in practical terms for Australian defence industry.Pyne also announced a $17 million competitive grant fund (ADM confirmed these are new dollars not absorbed costs) to be administered by the Centre for Defence Industry Capability, to begin in the middle of this year.
“First and foremost, it restates the Government’s policy of maximising the involvement of competitive Australian companies in the acquisition, operation, and sustainment of defence capability,” Pyne said. “The plan has a key message for industry— that we expect all companies, including primes, that want to work with Defence, to consider how they currently or might best fit in to the big picture.
“Put simply, we are redefining the phrase ‘Australian Defence Industry’. Having just an Australian Business Number is not enough if you are planning to be part of this. Being a serious contributor in Australian defence industry means having Australian-based industrial capability.
“It means company and board presence, infrastructure, and a skills base that can complete value-added work here in Australia, employing Australian workers. It’s an important shift, and signals to Industry that establishing a shop-front and getting an ABN is no longer enough,” Pyne said.
Pyne also took the opportunity to highlight the work being done so far in speeding up the approvals process for the $200 billion worth of Defence programs in the pipeline. Last financial year the Turnbull Government approved 74 capability related proposals.
“As at March this year we’re already on 90 decisions,” Pyne proclaimed.
ADM Comment: The government has done much policy work when it comes to Defence industry in the past two years. Indeed, as listed above, the policy framework has never been stronger in terms of high-level strategic guidance. The approval rate of programs working their way through the National Security Committee in Cabinet is running at breakneck speed compared to past administrations.
But there are still concerns about transparency and reporting. The accompanying website to the IIP, which was to be updated regularly as promised two years ago is still nowhere in sight. Indeed, when I questioned Minister Pyne about this, he seemed at a loss as to what I was speaking of and instead pointed me towards the Department (my two year campaign is still going strong, dear readers). Program numbers only appear in the Budget papers and that is only for approved programs.
AIC compliance/performance is not reported publically, though is examined internally every six months, as confirmed by Assistant Secretary Defence Industry Matt Ramage.
As for those 90 projects that the Minister mentioned as making their way through NSC this year – what are they exactly? There is no public record of what they are, how much they’re worth or where the contracts have gone. Even piecing together information provided in Austender, ministerial announcements and prodding the beast that is Defence Media yields no coherent picture.
ADM is very happy to see that the new policy document has a page dedicated to reporting (page 113 for those playing at home). We will be even happier when that reporting appears.