The release of the much-anticipated Defence Export Strategy this week has confirmed a number of programs and moves flagged by the Government.
“The Strategic Goal over the next decade to 2028 is to achieve greater export success to build a stronger, more sustainable and more globally competitive Australian defence industry to support Australia’s Defence capability needs,” the strategy said. “In support of this Strategic Goal, our ambition is to achieve the following five Objectives by 2028:
- strengthen the partnership between the Australian Government and industry to pursue defence export opportunities;
- sustain Australia’s defence industrial capabilities across peaks and troughs in domestic demand;
- enable greater innovation and productivity in Australia’s defence industry to deliver world-leading Defence capabilities;
- maintain the capability edge of the Australian Defence Force and leverage Defence capability development for export opportunities; and
- grow Australia’s defence industry to become a top ten global defence exporter.”
The headline figures surrounding the strategy do have a few caveats though. To recap, the new programs announced under the strategy are:
- A $3.8 billion Defence Export Facility administered by Efic (Export Finance and Insurance Corporation), Australia’s export credit agency. This will help Australian companies get the finance they need to underpin the sales of their equipment overseas.
- $20 million per year to implement the Defence Export Strategy and support defence industry exports, including $6.35 million to develop and implement strategic multi-year export campaigns, an additional $3.2 million to enhance and expand the Global Supply Chain program, and an additional $4.1 million for grants to help build the capability of small and medium enterprises to compete internationally.
ADM can confirm that while the Government has committed $20 million per annum to implementing the Defence Export Strategy, this is an internal reallocation of funding within Defence ie no new money.
In regard to the $3.8 billion from Efic, this is once again made up of funds that are already available to Australian companies looking to export. The Efic facility will build on the support it already provides to Australian defence exporters, including many SMEs such as EOS and Thomas Global.
Applications by Australian defence exporters under the facility will be subject to a number of conditions to ensure that Efic is not crowding out private market finance instead of filling a market gap, and to demonstrate the commercial viability of supporting Australian defence exports. Efic loans will be written on the National Interest Account, allowing Efic to handle loans too large for its normal commercial account. Defence-related applications will receive no special treatment when going through the Efic process.
In essence, the strategy is more about aligning a whole-of-government approach to Defence oriented exports rather than reinventing the wheel. Chapter 4 of the document outlines these changes well with chapter 5 explaining how success will be measured.