An economic analysis from Thales Australia of how Australia’s Defence Industry spending flows through the national economy has found ‘significant benefits’ to Australian SMEs and a strong economic benefit from Sovereign Industry Capabilities.
Economic analysts AlphaBeta Advisers were given unprecedented access to data on hundreds of thousands of payments by Thales Australia to its Australian suppliers over a three-year period.
AlphaBeta lead researcher Dr Andrew Charlton said greater understanding of the value and impact of Defence spending in the Australian economy was critical as the government ramped up major acquisition programs under its Integrated Investment Program (IIP).
“Prime Defence contractors such as Thales are key to translating IIP spend into effective supply chain and investment programs because they provide a link between the Department of Defence’s investment and the many other Australian businesses in the supply chain, many of which may not be defence specialists,” Dr Charlton said.
Minister for Defence Industry Melissa Price said the government’s ‘unwavering commitment’ to supporting small businesses in the defence supply chain was having a clear impact.
“It has always been this government’s intention that the $200 billion we’re investing in a record build-up of defence capability flows through to the thousands of small businesses that make up our defence industry,” Minister Price said. “This analysis by Thales demonstrates how our investments are creating local jobs, and also building the critical defence capability we need to deliver a capable, agile Defence Force.”
Thales Australia CEO Chris Jenkins said the data-driven approach demonstrated there was a triple-dividend for Australia from increasing spending on Australia’s advanced industrial capabilities.
“First and foremost, Australia’s sovereign defence industry capabilities are vital to delivering a capability advantage to the ADF,” Jenkins said. “Secondly, these sovereign industry capabilities build Australia’s self-reliance and the capability of the broader Australian advanced manufacturing sector.
“Thirdly, as this data clearly shows, there is a substantial jobs and economic activity benefit from spending more of the Defence dollar in Australia. It delivers thousands of jobs spread through hundreds of business across the nation.
“This analysis provides strong evidence in support of the government’s policy of requiring high levels of Australian Industry Capability (AIC) in its acquisition and sustainment programs. There is a strong correlation between Sovereign Industry Capability and the greatest benefit flowing to Australian suppliers.”