In light of recent events in Eastern Europe and the Asian Pacific, concern for national defense is the forefront focus worldwide. The lessons taught by the ongoing conflict is that modern capabilities and competition demands equipment and resources more than ever before. Australia is no exception.
Australia, in its 2022-23 Federal Budget reconfirmed its commitment to expanding defence capabilities across the land, air, and sea domains. The budget announced that Australia has committed to a line of A$48.6 billion (US$36.43 Billion), for this year which represents 7.4% increase from 2021-22. The total already committed to for the next decade totals A$575 billion (US$430.99 Billion), which the government cites as an attempt to “… support a modern, expanded Australian Defence Force with regionally-superior capabilities …”.
Regional capabilities are particularly relevant for Australia. Being an Island nation, Australia has a focus on naval and submarine forces, which continues moving forward as the government has pledged a A$10 (US$7.5) billion investment toward a new submarine base to be built on the east-coast; a A$4.3 (US$3.22) billion commitment to develop Western Australia’s first large-vessel dry berth precinct at Henderson Shipyard; and a plan to more than triple the size of Osborne Shipyard for the future SSN program.
Australia must also focus on being superior through modern capabilities. An increase of the permanent Australian Defence Force (ADF) personnel is being funded by an A$38 Billion investment (US$28.48 Billion). The majority of the additional 18,500 additional members will likely be trained to use the newly purchased uncrewed aerial surveillance systems, Ch-47F Chinook helicopters, Abrams tanks, and combat vehicles for the Australian Army; and extending in-service support for the Hawk 127 Lead-In Fighter Training System. The Australian Signals Directorate is also receiving a AU$9.9 Billion (US$ 7.42 Billion) investment over the next decade as the frontline defence of ongoing national cyber security.
Exporters should be encouraged by Australia’s long history of purchasing US defence resources and equipment. In any given 4-year period, Australia will spend upwards of AU$10 Billion (US$7.5 Billion) on US arms, and this number will only increase if the current geo-political climate persists. Data suggests the biggest purchase items from the US have consistently been weapons, IT, and engineering contracts.
Exporters, particularly those already selling to US departments of defense currently, offering modern defence products, defence building blocks in the form of hardware and software, helicopters, tanks, surveillance systems, and submarine maritime systems and products could all find opportunity in Australia. There is also an immediate focus on training and recruiting the Australian Defence Force, so education and training platforms may also find opportunities.
Please reach out to:
Chris Evans | Principal Consultant | E: chris@foley.com.au
