Building a self-reliant defence industry by 2035

The Australian Industry and Defence Network (AIDN) is calling for wide-ranging reforms of Defence procurement and a boost to Defence funding to lift flagging productivity and safeguard the country’s national security.

In a wide-ranging speech to the National Press Club on Wednesday, AIDN CEO Mike Johnson called for sweeping reforms to Defence and Defence industry policy and a boost to Defence spending to ensure a sovereign self-sufficient Defence industry.

‘’A strong sovereign Defence industry offers numerous economic and strategic benefits,’’ Mr Johnson said.

He said Australia’s current reliance on foreign imports for military hardware maintenance and technology represented a risk with the risk of supply chain disruption if conflict should break out.

But by investing in local industries, Australia reduced its reliance on imports which would save the government and taxpayers money over time.

“A thriving Defence industry will drive innovation in other sectors such as manufacturing, IT, and cyber security and strengthen Australia’s overall economy,’’ Mr Johnson said.

“Australia could become a leading exporter of Defence products to other nations, particularly in the Indo-Pacific strengthening its role as a key player in regional security,’’ he added.

To spell these elements out in more detail Mr Johnson said government should:

• Mandate a minimum percentage of Defence procurement contracts for Australian SME’s.
• Ensure a greater release of open tenders to expand direct access opportunities for Australian SME’s across the supply chain.
• Secure binding commitments for Australian SME content in every Defence program with transparent reporting and accountability measures.
• Ensure the 2026 Defence Industry Development Strategy explicitly seeks to prioritise SME led contributions to sovereign capability.
• Establish a body to perform an independent audit of Australian Industry Plan compliance and Australian SME involvement with publicly reported findings to ensure accountability and measurable outcomes.

Mr Johnson said AIDN supported an increase in Defence spending because it was required to meet the geostrategic challenges of the day and ensure the Australian war fighter had the capabilities needed.

“Whether we go to 3 per cent or 3.5 per cent it must be accompanied by serious Defence procurement and industry policy reform,’’ he said.

Mr Johnson said AIDN also called for the US government to exempt Defence goods from tariffs on inputs such as aluminium, steel and copper as the imposts could only hold back AUKUS and global Defence trade.

He said such tariffs were detrimental to US, UK and Australian Defence industry at a time when unity and a common sense of purpose among allies has never been more important.

Source: AIDN Press Release