Keynote Address
(Source: Australian Defence Organisation; issued Feb. 24, 2004)
Keynote speech by Australian Defence Minister Robert Hill
at the ADM 2004 Congress, National Convention Centre, Canberra
Tuesday 24 February 2004

I am pleased to have the opportunity to address this inaugural congress of the Australian Defence Magazine. It is fair to say that ADM is essential reading for all of us involved in the defense industry debate. I’m happy to congratulate the publishers in taking this next step of providing us all with the opportunity to explore the constantly shifting demands of the Defence-Industry relationship.

This is an important moment. As you all are well aware, we face an uncertain strategic environment. Threats such as terrorism and those associated with the proliferation of weapons of mass destruction have caused us to rethink our strategic doctrine. The growing concerns of failing states in our region has also focused our minds.

The Defence Capability Plan

In response to the developing international security environment, the Government fine-tuned its strategic policy with the February 2003 Defence Update. This update led to the comprehensive Defence Capability Review which concluded in November last year. This in turn, led to the development of the revised DCP, the contents of which are a practical manifestation of the Government’s strategic policy.

The goal of the Defence Capability Review was to ensure that the ADF remained a force able to achieve the objectives of the Defence 2000 White Paper whilst recognizing the extra complexity represented by unconventional threats and our regional responsibilities.

We concluded that increased strategic uncertainty mean that some rebalancing of capabilities was necessary to provide us with a more flexible and mobile force, one that is ready and sustainable.

The recent lessons of Afghanistan and Iraq have taught us that while ground, air and maritime superiority are essential, information superiority is more crucial than ever to success.

With this in mind, the review process identified some additional requirements that the DCP seeks to satisfy. The most important of these are:

--To strengthen the effectiveness and sustainability of the Army;
--To improve air defense protection to deploying forces;
--To enhance the lift capability for deployment; and
--To position the ADF to exploit current and emerging network centric warfare advantages.

The DCP will substantially enhance the ADF’s potential as a joint force and one that is able to contribute effectively to coalition operations. As a continental state with limited internal lines of communications we require an amphibious capability that can be protected by air and sea elements. Those air and sea elements can then support and sustain land operations.

The effectiveness of the ADF will also be increased by projects like the long endurance unmanned aerial vehicle, the wide area communications network and the joint command support system.

The new DCP is also proof of the Government’s recognition that industry requires a degree of certainty and visibility of Defence planning in order to provide the most appropriate and effective capabilities for the Australian Defence Force.

Defence and industry must face the challenge of guaranteeing the essential industry capabilities that are required to support a relatively small defense force that generates fluctuating demand.

Opportunities for industry

Most notably, the Government has taken a significant step towards integrating Australian companies into the supply chains of global prime contractors through its $300 million stake in the global Joint Strike Fighter program.

The Government’s early commitment is already paying dividends with Australian industry. Our decision to participate in the Systems Design and Development (SDD) phase of the program enabled Australian industry to start bidding for JSF work up to five years ahead of signing a contract for aircraft acquisition and almost 10 years before they would be in operation.

Australian industry involvement in the global JSF Program represents a new paradigm, as we are seeking to be part of the global supply and support chain of the JSF rather than only to provide niche support to the Australian fleet. This provides Australian firms with economies of scale and substantially larger markets for their products.

Overall, we are pleased with the increasing Australian industry engagement in the JSF Program, particularly as we are currently only two years into JSF’s 10 year development program. There is genuine cooperation between Australian industry participants and contracts are being won with more in prospect. A fortnight ago I announced the award of Australia’s twelfth JSF contract.

We look forward to ongoing opportunities for future work, particularly in the higher technology areas of JSF such as engineering design, advanced composites, software development and electronic warfare.

One significant, but by no means singular example of these opportunities is BAE Systems’ contract for development work in the electronic warfare components area, together with Brisbane based Micreo Ltd. This is Australia’s first EW (high technology) contract in this program. Of further significance, Micreo was the first company outside the US to win a JSF electronic warfare mission system contract.

We have also had success in terms of applying Australian R&D to assist the JSF project. Of 280 science and technology related proposals recently considered by the JSF Project Office and Lockheed Martin, only twenty were supported – but six of those were from Australia! The JSF Industry-Technology conference in Melbourne on 21st to 22nd of April will explore these and other innovative ideas for science and technology collaboration on JSF.

Of course, whilst industry benefits are important and welcome, it is crucial that JSF provides the capability for air combat that Australia needs. While it is still early in the JSF development phase, the Government is confident that the aircraft will provide Australia with a potent replacement for the F-111; and subsequently the F/A-18.

True fifth generation stealth, and fully networked radar and electro-optical sensors will help the JSF survive the ‘first day of the war’ with much more certainty than our present capabilities. The stealth design, combined with the world’s most advanced radar technologies will give JSF the first shot opportunity in Beyond Visual Range combat, and the advanced sensor suite and weapons load will also ensure the ultimate in air-to-ground strike precision.

In addition, key networking and enabling capabilities for the Australian JSF fleet will be coming on line. Government expects to receive advice in the near future on the preferred tenderer for the new air-to-air refueling tankers, and the first flight of the Wedgetail AEW&C aircraft is forecast to occur in Seattle in May this year, on schedule. The combination of these platforms would give Australia a powerful and credible capability for air combat well into this century.

A program as large as JSF is rare. However, the lessons we are learning from our involvement in it should be applied to our efforts to break into global supply chains in other future projects. JSF should be considered as the program that encouraged Australian defense industry to market itself on the world stage.

In this regard the progress of Australian companies competing individually and again under the team Australia banner for work in the U.S Littoral Combat Ship program is also encouraging. The US is also willing to provide Australian industry opportunities within the missile defense program and also the US Coastguard Deepwater program. It was good to see the US Coastguard again at Pacific 2004.

Relevant to the issue of missile defense, the government has taken a decision to further upgrade and enhance the JORN over the horizon radar system. This project at a cost of approximately $62 million over a number of years will further improve the sensitivity of the operational radars and support further research on the capability to address ballistic missile threats.

The Government also intends that the major ship construction and upgrade programs announced in the DCR provide a major boost to the local shipbuilding industry.

Defence has settled in principle the capability requirements for the new amphibious support ships. The two ships will replace replace HMAS Tobruk and one of our LPAs. They will need to be able to embark, sustain and transport by sea an amphibious combined arms battle group together with their equipment and supplies. The force needs to be able to train and rest while en route to operations. The ships will need the capability to carry and tactically deploy several hundred vehicles, including armor, plus trailors. They will also need the ability to airlift simultaneously an air mobile combat team from 12 helicopter launch spots between the two ships.

They will each have hangar space for at least 12 helicopters and at least four conventional landing craft that are capable of carrying our new tanks. The ships must also be capable of providing the necessary command, control and communications to direct the battle group’s amphibious landing and follow-on forces. Of course, given the prospect of Australian and US forces continuing to work closely in the future, the ships will need to be interoperable with our coalition partners.

Defence has issued a request for information to two international ship builders – the Spanish company IZAR and the French conglomerate Armaris – concerning their respective new LHD designs. This will help inform the decision on a preferred design. Interestingly both types were identified by ADM in its latest edition.

While the ship will be based on an overseas design, the translation of that design into a ship tailored to suit Australia’s challenging environment will require a good deal of local knowledge and experience. Many of the ship’s system components will be derived from local industries to ensure whole-of-life support for this capability.

Four Australian ship building companies, ADI, Tenix, ASC and Forgacs have been asked to assist the Government with its design evaluation.

The Defence/Industry partnership

The DCP identifies many other important opportunities with an emphasis on integration of systems. An example is the Battlespace Communications System project, for which we issued a request for tender just over a week ago. By replacing and enhancing combat radio, tactical trunk and local area systems, the project will be a major step toward enabling Network Centric Warfare – the war fighting paradigm of the future.

I wanted today to emphasize our partnership approach to defense industry. In many respects, the ANZAC Ship Alliance is a good example of the Government’s strategic approach to industry engagement. The recurring message of the defense industry sector plans is that our approach in the future must be based on a closer commercial partnership between Defence and industry, one that provides a basis for long-term planning and investment by industry, and increased value-for-money. The ANZAC Ship alliance has provided a lead.

Another important step forward is the recognition that both acquisition and through life support can be provided under a single contract, as is the case with the Hawk Lead-In-Fighter.

To achieve success with this project an innovative partnering agreement was developed by the DMO, Air Force and BAE Systems. This partnering system is an integral part of the management of the project and has allowed both the Commonwealth and BAE Systems to experience increasing economies of scale and scope to ensure that the Air Force receives the best possible product.

The new Armidale class patrol boats illustrate another example of cradle to grave contracting involving both the acquisition and through life support in the one contractual arrangement.

Perhaps the next step in our evolution towards a truly strategic approach to procurement is represented by AIR 9000, where we are seeking a long-term strategic relationship with a helicopter company for the acquisition, maintenance and support of the ADF’s rotary wing capability.

This ideally will provide, over time, a mission capable and cost-effective ‘family of helicopters’ with a range of common systems, such as avionics and engines, across the platform types; allowing common system approaches to issues such as training and support.

Such an approach would simplify operational and support requirements and reduce the through life support, maintenance and training costs of the ADF’s helicopter fleet including, where appropriate, our existing legacy systems.

Additional benefits stem from the long-term nature of the program, which will provide a firm basis for Australian industry to participate in the global aerospace industry, as well as enabling it to provide a high level of support to the ADF. It would thus achieves both of our goals.

While strategic partnerships at the prime contractor level are looming as the defining characteristic of the future Defence-industry relationship, the Government is aware that the approach has risks that must be managed.

To deal with this, Defence is developing guidelines that require prime contractors to demonstrate their commitment to fostering competition and innovation in the supply base.

This would be achieved by requiring the submission of a satisfactory supply chain management plan as part of the prime contractor’s response to the tender.

The Government has moved quickly to implement the recommendations of the Kinnaird review into procurement. The Capability Group has been reformed and strengthened and I welcome LTGEN Hurley as head of that group. Dr Gumley will head the new DMO and I welcome him to the team. Mr. David Mortimer will lead the new Procurement Advisory Board.

They will help build on what I regard as significant improvements in the defense procurement processes in recent years. I’ve mentioned the AEW&C program – parts of which are currently ahead of schedule. The Armed Reconnaissance Helicopter project is in good shape. The first helicopters will be delivered and airborne later this year.

It was good to have one of the new Bushranger vehicles here in Canberra last week. The first of the new ASLAVs have been delivered to 1 Brigade in Darwin. The MII3 upgrade is going well. These programs will give the Army almost 900 good quality armoured vehicles by the end of the decade.

So whilst the challenges ahead might be many and demanding – both industry and Defence are showing that they can deliver the goods. Events such as ADM 2004 further the relationships that are necessary to meet these challenges. I therefore wish you every success for the next two days.


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