Gday USA Defence Industry Dialogue

07 Apr 2017 Speech

G’DAY USA DEFENCE INDUSTRY DIALOGUE

Ladies and gentlemen, good morning and welcome to this fantastic event, G’day USA.

It is a pleasure to be here to promote Australia and Australian industry.

I want to make special mention of today’s sponsors and to thank them for helping make this the spectacular success that it is –a sign of just how tight the ties between our countries are today.

The Australian-American alliance has never been stronger.

There has never been a more important bilateral defence relationship for Australia than our alliance with the United States.

It is a source of strength and confidence for both our nations.

That strength is underpinned by the military capability we bring to deter our adversaries and to defend our shared interest wherever they are engaged around the world.

Our defence industry is critical to that capability.

It is a fundamental part of our independence and our sovereignty.

It gives us the liberty to prosper in a world that is challenging us in both the scale and nature of the threats to our national security.

It needs to be able to anticipate and respond to those threats to help us adapt our capabilities today and position us for the future.

I hope all of you can play a part in that.

But as we think of the future we want and how we must leverage our shared defence industry capability to achieve it, we should also remember the past.

It is important to reflect on the shared values and history that made the Australian-American alliance possible.

The citizens of our two lands have always cherished liberty – and known it requires courage and sacrifice to ensure that its flame burns bright, in the present and for future generations.

One hundred years ago today, on April 6 1917, the United States made the decision to enter World War I.

The enduring defence relationship between the United States and Australia stems from that historic turning point.

For over the last 100 years the United States and Australia have fought side by side in every major conflict.

In July 1918 American and Australian troops fought together under the command of our great General Sir John Monash in the Battle of Hamel – the very first time in the war American forces participated in an offensive action under non-American command – winning a victory using new tactics that sowed the seeds for the ultimate victory on the Western Front just five months later.

But United States fighting forces got to know their Australians cousins in earnest in the Second World War in the battlefields of the Pacific.

Bonds were formed that reached up to the very highest levels.

General Macarthur made his headquarters in Australia after being driven from the Philippines.

And it was an Australian coast-watcher, perched high on the slopes of a volcano, deep in Japanese occupied territory in the Solomon Islands, who saw the explosion of PT-109 and despatched the team that rescued her survivors, including the future President Kennedy.

Just next month we will mark the seventy-fifth anniversary of one the crucial turning points of the war, the end of the Japanese advance south in the Battle of the Coral Sea, yet another fine example of close cooperation between American and Australian forces in a key strategic victory for the Allies.

There is more to the tale of our joint ventures in arms.

Together, American and Australian forces resisted aggression in Korea – where my father, Captain Remington Pyne, as he was then, proudly served.

When others sat on the sidelines, we joined you in Vietnam.

Australia was there in the Gulf after the invasion of Kuwait and in Afghanistan after September 11.

We played a crucial role securing regions of Western Iraq where it was feared Saddam Hussein had concealed his Scud missile launchers in 2003.

Today, we have the second largest deployment after the United States in action against the evil that is Daesh.

Australia is not just an ally.

We are a useful ally.

We don’t just have the ability to help keep the peace or, when needed, take part in combat operations.

We have the will.

We are there.

But our alliance is not confined to the battlefield.

We have a practical engagement, which includes an extensive program of military training and exercises.

This year we look forward to our combined biennial Exercise Talisman Sabre, as well as the sixth rotation of US Marines in Darwin as part of the US Force Posture Initiatives in Australia.

Our intelligence sharing operates at the highest levels of cooperation.

The US-Australian Joint Defence Facility Pine Gap, in our Northern Territory, marks half a century of operations this year.

The Australian-American alliance is the greatest of partnerships.

We have been there, side by side, with our United States allies at every opportunity.

The expanded Defence Force capabilities the Australian government has committed to will allow us to do even more, making Australia an even better ally.

And the growth in our already strong defence industry relations will only make us a closer ally.

Strengthening the industrial alliance between our two countries will ensure our mutual prosperity and protect our national interests as we navigate an increasingly uncertain twenty-first century together.

President Trump is right to expect that the friends and allies of the United States play their part in contributing to international peace and security.

Australia is resolute in its determination to meet our alliance commitments, increasing our defence budget to two per cent of Gross Domestic Product by 2020-21.

We will spend some one hundred and ninety-five billion Australian dollars over the next decade on a massive renewal of our defence capabilities to assure our long-term security into the next half of this century.

The expenditure includes a fundamental renewal of the Australian Navy’s maritime capabilities.

We have made major decisions on shipbuilding with the nine Future Frigates and twelve Offshore Patrol Vessels to be built in Australia as a national endeavour.

Likewise, our twelve Future Submarines will be constructed in Australia as one of the largest programs in Australia’s history.

Importantly, our plans also include a significant number of capabilities procured from the United States – not only because they are world class, but to ensure deeper interoperability between our defence forces.

Over the next few years alone Australia will go through a significant replacement of its Air Force fleet, all of which will be purchased from the United States.

These include the next-generation Joint Strike Fighter, the Growler Electronic Attack Aircraft, the Poseidon maritime surveillance and response aircraft and the Triton unmanned aircraft.

This purchase list should make it clear that Australia is a longstanding and important contributor to the health and resilience of the United States defence industry and its ability to meet the needs of the America’s armed forces.

At the same time, however, Australia is moving to develop a much stronger sovereign defence industry capability in Australia to operate and sustain the complex and advanced capabilities we are acquiring.

A stronger Australian industry capability will allow us to be a more capable ally, manage a more contested regional security environment and support deployed United States forces, including those in northern Australia.

Australia is one of the most open defence markets in the world.

We do not have an offsets program.

This approach has benefitted the defence industry in both Australia and the United States in ensuring that we can provide the capability for our forces when it is needed while promoting international competitiveness.

Now, however, we are taking a new approach that should create even more opportunities for technological exchange and joint venturing.

The Australian government has put defence at the very centre of our policy agenda.

We want to guarantee our national security and to ensure that Australia can play its part protecting peace in our own region, in Asia, in the Pacific and in the Indian Ocean.

We want to use defence to underpin our economic prosperity, to put the skills and innovation that characterise defence industries to work to form the basis of the smart, high-tech manufacturing of the twenty-first century.

We expect to see a much higher level of Australian industry involvement in proposals for the acquisition and sustainment of our defence capability.

The outcome will be a stronger, more self-reliant Australia. An Australia that can play a greater role supporting United States needs – and an enhanced alliance as we seek to meet the challenges ahead.

Australian defence industry has a fundamental role to play in the acquisition and sustainment of all defence capability, be it in the shipyards welding Australian steel for our Future Frigates or in the delicate and skilled process of manufacturing the tail fins for the F-35 program.

And the sector has already demonstrated its competitiveness in the international marketplace.

Yesterday I attended the signing of a contract by KordUSA, an Australian company, with the United States Marine Corps, to trial an innovative solution to improve Marines’ tactical mobility in an increasingly technologically complex battlefield environment.

This is a great example of an Australian company taking an innovative idea through to commercialisation and successfully competing in the global environment.

Innovative Australian industry is already developing the next generation of capabilities that will enable the men and women of both our armed forces to complete their missions successfully.

Companies such as Austal, who not only produce high quality vessels for the Australian Navy and the Australian Border Force but are succeeding in the international market with contracts that include the United States Navy’s Littoral Combat Ship.

Australian industry is capable.

Australian industry is ready.

Australian industries want to do more – and we, as a government, will do everything we can to support the sector as it seeks to meet this goal.

Our Global Supply Chain program has become a pacesetter as it goes about creating opportunities to build small to medium Australian enterprises into the supply chains of the global primes – including those based here in the United States.

Indeed, many of our partner primes in the program are represented here today and I want to thank them for their vote of confidence in Australian industry and support of the alliance.

The Global Supply Chain program has provided a broad range of opportunities for Australian small to medium enterprises to successfully build their capacity and export readiness across a diverse set of technology domains.

Many of the businesses participating in the program have grown and now offer complete integrated supply and logistics chains in Australia and abroad.

The support and development of Australian industry has been enhanced through the initiatives of the Australian government’s Defence Industry Policy Statement from last year, such as the creation for the Centre of Defence Industry Capability, the Defence Innovation Hub and the Next Generation Technologies Fund.

These signature innovation research and development programmes deliver on the Australian Government’s 1.6 billion Australian dollar commitment to grow Australia's defence industry and innovation sector.

The Centre brings together initiatives such as the Global Supply Chain program under one governance structure with two key objectives:

One, to advance Australia’s military capability through developing and leveraging our innovative industries

And two, to enhance our national prosperity by growing the Australian defence industrial base into a world-class, globally competitive player in the sector.

Through our investment of 640 million Australian dollars over ten years, the Defence Innovation Hub brings together Defence, industry, academia, and research institutions to collaborate on innovative technologies that can be developed into advanced capability for Defence, and with export potential.

Australian industry is ready, capable and able not just to be included in the supply chains of US companies, but to provide genuine competitive advantages to your international businesses.

And we in the Australian government want to see the growth of a defence industry alliance as a key component of the greater alliance that binds our two nations together.

The F-35 is the perfect example of the defence industry alliance in operation.

As many of you would be aware, we held the biannual Australian International Airshow at Avalon, just outside Melbourne, Victoria, at the start of last month.

It was a proud moment for the Australian Defence Force and Australia’s defence industry, as the stars of the show were Australia’s first two F-35s, on display in the skies they will defend for the very first time.

I served as a minister in the Howard government, that last decade had the foresight to join the Global Cooperation Program and become an integral international partner.

We understood the importance of joining our allies in supporting the development of the fifth generation multirole strike aircraft.

At the same time we were also aware of new opportunities the program would create to build on the strengths of our defence industry.

The Australian government collaborated with the private sector to begin developing and marketing Australia’s industrial capability to the F-35 partner companies and countries from the earliest days of the project.

Australia now has a number of small to medium enterprises that are fully embedded into the Lockheed Martin supply chain to supply critical parts and equipment to support the growing global F-35 fleet.

Many of these global suppliers have, in turn, grown a domestic supply chain to support their exports.

Just this one platform has brought significant opportunities for Australian industry, with more than $800 million in local design and production work to date.

According to a recently release report prepared by PriceWaterhouseCoopers the F-35 program already supports close to 2400 jobs in Australia, and we expect this number to grow to more than 5000 jobs by 2023 as production ramps up.

Every F-35 aircraft in operation around the world will be fitted with Australian manufactured components.

They won’t be our only contribution to the program.

Australia has been selected as the regional hub for maintenance, repair, overhaul and componentry upgrades for the F-35 fleet in the Asia-Pacific region.

This will be on top of the role we will play for regional F-35 airframe and engine maintenance, repair, overhaul and upgrade work.

We are actively pursuing additional aircraft component and non-aircraft equipment work, along with regional warehousing responsibility.

It was an extraordinary moment, a decade and a half after Australia first signed up to the Joint Strike Fighter project, to see such an array of our defence industry capability on display to the people of our nation in the form of the fifth generation aircraft.

Australian defence science is continuing to play an active role in the F-35 program as it unfolds.

Our skills and ability are at work on tasks ranging from providing innovative solutions for airframe testing to investigating the aircraft’s ability to withstand electromagnetic exposure – such as the results of lightning strikes – with minimal impact to the aircraft’s systems and capabilities.

Similarly, Australian radar specialists have undertaken collaborative trials with Northrop Grumman to assess the performance of the Joint Strike Fighter’s radar sensor suite.

Their analysis has led to improvements in the radar and fusion software that will deliver an improved capability to all the F-35 partner nations.

Australia is a world leader in vibration-based diagnostics, a skill that is being applied to significantly improve the reliability and availability of F-35 engines.

The United States and our other international project partners have also accepted our advice to extend the duration of airframe testing for the F-35 using the marker band technique developed by a team of Australian scientists as a simple and efficient means of measuring crack growth in aircraft structures.

The outcome of this approach is expected to reduce sustainment risks and costs of the airframe for all F-35A operators.

Science and technology has long been an area of close collaboration between the United States and Australia, through bilateral agreements as well as the Technical Cooperation Program the Five Eyes nations have participated in for over half a century.

Australian scientists have been posted into US defence laboratories on short and long-term assignments, while American scientists have been welcomed in Australia’s defence laboratories on secondment.

On significant projects our scientists have been embedded in the project teams either with the American companies involved or with the US Department of Defence.

Scientific collaboration between our two countries has helped develop many innovative defence capabilities for both our nations.

The Nulka anti-ship missile decoy, developed by Australia’s Defence Science and Technology Group and the US Navy springs immediately to mind.

The Nulka system has been one of Australia’s most successful defence exports for many years, providing protection for more than 150 ships in the United States, Canadian and Royal Australian Navies.

The total investment in Nulka by these three fleets has been around one billion Australian dollars.

It is an investment that has certainly paid dividends.

Nulka proved its usefulness in combat off the coast of Yemen just last October when it was successfully deployed by USS Mason to defeat an attack by Houthi rebels.

In recent times the Defence Science and Technology Group has been undertaking collaborative research work with Australian industry to further develop our already impressive over the horizon radar capabilities.

The Group has worked with BAE Systems and more recently with Lockheed Martin on three million Australian dollar research and development collaboration on the Jindalee Operational Radar Network.

Today, Australia and the United States are undertaking joint research in a range of capability areas that take in matters as diverse as aircraft longevity, space and electronic warfare, counter-terrorism and even the forecasting of influenza outbreaks.

Let me give you three concrete examples of capability enhancements through the joint efforts of Australia and the United States.

In 2015, the Royal Australian Air Force took delivery of the first production set of wing kits for the Joint Direct Attack Munition – Extended Range.

These wing kits, designed by Australian defence scientists, convert Boeing’s standard Joint Direct Attack Munition into a long-range glide bomb, enabling both our air forces to strike at a target with pinpoint accuracy at up to three times the range of the original weapon.

This is an impressive improvement in capability – an achievement brought about by collaboration between the Australian Department of Defence, Boeing, and an Australian company, Ferra Engineering, the company which supplies the wing kit assembly.

The JDAM-ER, as it is known, is a great example of innovation and technology cooperation between Australia and the United States, bringing both enhanced defence capability and an estimated economic benefit of some 850 Australian dollars.

Another example of cooperation between our two countries is the collaborative research undertaken by our Defence Science and Technology Group and the US Navy.

This has resulted in upgrades to the radar warning receiver in the Super Hornet aircraft, improving its ability to locate and identify threats.

This collaboration has given the aircraft a greater ability to fight in a modern, complex, electronic warfare environment.

This is precisely the type of defence innovation I want to see.

It took forward looking research to develop the software upgrade – and then some smart thinking to apply it to a real system in a fast jet.

The upgrades have already been applied in the US and Australian Super Hornet fleets and could also be deployed on the Growler aircraft.

Speaking of speed, one of the most significant collaborative research projects between Australia and the United States is in the area of hypersonics.

Australia is proud to be a world leader in hypersonics research, testing and evaluation.

For the last few years we have been conducting a 54 million Australian dollar Hypersonic International Flight Research Experimentation Program, known as HIFIRE, involving the US Air Force Research Laboratory, the University of Queensland, Boeing and BAE Systems as our principal partners.

The program entails ten flights to test the fundamental physics, underlying propulsion and flight at more than five times the speed of sound.

The seventh flight in the series by our joint team was successfully conducted in May last year, achieving a speed of more than Mach 7.

The program is giving the US and Australia a deep understanding of the potential of hypersonic craft and how the technology can be realised as a defence capability.

We will be able to evaluate hypersonic concepts and contribute to the development of new platforms, putting our allied forces at the very forefront of this game-changing technology.

Australia is not alone in increasing its focus on innovation to drive such projects.

We share similar threats and challenges with the United States.

To meet future demand, both Australia and the US are looking to rely heavily on innovation, teaming and collaboration with industry, universities and other research establishments, and our allies.

Just last month I launched the 730 million Australian dollar Next Generation Technologies fund which aims to serve as the crucible for creating game changing technologies by attracting the best scientists and researchers to apply their expertise to develop new technologies that will have transformational capabilities for Defence.

The benefits that will flow from this partnership will not only secure a winning edge for the Australian Defence Force, it will also create jobs and economic prosperity for Australians.

The NGTF will commit to research and the application of science to develop new technologies that have transformational capabilities for Defence.

As one of the priorities, the Fund will support the development of hypersonics within Australian industry and academia, and we expect a strong US collaboration in this pursuit.

Indeed, what Australia has identified as game changing technologies in transformational defence domains have common elements with the direction the US is taking in strategic technology warfare.

In all of this one of our biggest challenges is to transition innovation into capability for the war fighter in a timely and cost-effective way.

The Australian government is implementing an integrated defence innovation system that will allow industry and universities to submit capability concept proposals, which will be progressed through the Defence Innovation Hub if they are deemed to be promising and feasible.

Again, this is a new approach to innovation and the Australian government is putting 640 million of our dollars towards stimulating new ideas and streamlined processes to maximise industry’s innovation potential in defence capability.

Collaboration with our old and closest ally, the United States, and new levels of cooperation between our defence industry partners will be crucial in meeting this goal.

We therefore welcome the recent amendment to the definition of the US National Technology and Industrial Base to include Australia and the UK alongside Canada.

This is a significant development for our alliance and our ability to work together to develop advanced defence capabilities and conduct joint military operations.

It also recognises the world-leading capabilities within our Defence Industry and research community that could benefit US capability.

This initiative supports the Government’s own defence industry and innovation policy. It will enhance our industrial and technological cooperation and expand the mutual pool of innovation to aid in maintaining our technological superiority.

A key part of my visit over here has been engaging with the key leadership of the US military to see how this initiative can be implemented, and help Australia be a better ally to the United States.

Under the Turnbull government, Australia is engaged in a great national endeavour, the largest ever peacetime expansion of our military capability.

We are seeking to place the defence industry at the forefront of national development.

In the past, we would buy defence equipment from overseas and take delivery a few years later. This can no longer be the approach we take.

Australia needs to be able to better express itself as a middle power in the world.

We should have the ability to stand on our own two feet.

We need to grow our own defence industrial capability.

That means developing the ability to design, build, maintain and repair our own equipment.

It also means working closely with old allies – and we have no greater ally than the United States.

Thank you for the opportunity to talk to you today and to all of you for making this event what it is – not just a celebration of our defence industry and broader Alliance cooperation today but, more importantly, a reminder that we must do much more to confront the threats we face together.

The strength of Australian defence industry and United States defence industry and the depth of our cooperation will be vital to successfully meeting this challenge.

We will be tested more often, but if we build a more robust sovereign industrial capability to support our war fighters we will also triumph.