Defence industry of Australia

The Australian-built frigate HMAS Newcastle and other warships at Fleet Base East in Sydney, a major centre for the Australian defence industry

The defence industry of Australia provides military equipment, supplies and services for the Australian Defence Force (ADF) and export customers. Definitions of what the defence industry comprises and estimates of its size differ, but it was believed to have employed between 12,000 and 29,000 people as of the mid 2010s.[1] The industry has grown over recent years, and Australian Defence Magazine reported that the 40 largest companies had a total revenue of $A 9.2 billion in 2015.[2]

Current scale

As there is no agreed definition of what the Australian defence industry comprises it is difficult to determine the size of the sector. Many of the companies which supply goods and services to the military also have a significant civilian market, and their staff often work on items intended for both military and civilian customers.[3] The Australian Government's 2018 Defence Export Strategy provided the following definition:

Australian defence industry consists of businesses with an Australian Business Number who are providing or have the capacity to provide defence-specific or dual-use goods or services in a supply chain that leads to the Australian Department of Defence or an international Defence force.[4]

A 2015 parliamentary inquiry into the defence industry noted that "published estimates of the number of people employed in the defence industry have cited varying figures". The federal government body Skills Australia estimated in 2012 that between 15,000 and 25,000 were employed in the industry. In 2010 the Department of Defence put the figure at up to 29,000 people, and in 2015 it advised the inquiry that around 27,000 people were directly employed in the industry.[1] The 2016 Defence Industry Policy Statement stated that 25,000 people were employed in the defence industry, of whom around 50 percent worked in global defence companies.[5] If accurate, this estimate means that the industry represents 0.24% of total employment, and is equivalent to 2.9% of jobs in the total manufacturing sector.[6]

In January 2016 Australian Defence Magazine reported that the 40 largest Australian defence companies had a combined revenue of $A 9.2 billion in 2015.[2] A 2017 Australian Strategic Policy Institute report stated that the defence industry "accounts for 0.22% of Australian industry and 1.7% of the manufacturing sector", and "although [the] Australian defence industry is undoubtedly important for our defence force, it represents only a trifling fraction of the overall Australian economy.[6]

Exports and imports

The scale of the Australian defence industry's exports is greatly outweighed by the scale of imports of military goods and services into Australia. Between 2001 and 2016, the total value of defence exports from Australia measured using the Stockholm International Peace Research Institute's methodology represented 6.8 percent of the total value of defence imports into Australia. There was considerable variation in this ratio between years.[7] As of 2018, the total value of Australian defence exports was around $A2 billion per year.[8] While this made Australia the 20th largest exporter of defence goods and services, it represented only around half of one percent of the global arms trade.[9]

A 2010 Australian Strategic Policy Institute report stated that "Defence’s principal needs from Australian industry are maintenance, repair and upgrading of the ADF’s equipment, most of which is imported". This report also noted that at the time it was estimated that manufacturing represented 20 percent of the Australian defence industry's revenue, with sustainment services making up the remainder.[10]

In 2018 the Australian Government announced a plan to support the Australian defence industry to expand its exports, with the goal of Australia becoming the 10th largest source of military exports. This will include making $A3.8 billion in government funding available for loans to companies and establishing an Australian Defence Export Advocate.[8]

Defence industry media

Several trade journals currently cover the Australian defence industry. These include the Australian Defence Magazine[11] and the Asia-Pacific Defence Reporter.[12]

See also

References

Citations
  1. 1 2 Joint Standing Committee on Foreign Affairs, Defence and Trade 2015, p. 4.
  2. 1 2 "ADM Top 40 Defence Contractors 2015: a growing part of the Australian economy". Australian Defence Magazine. 5 January 2016. Retrieved 29 January 2018.
  3. ↑ Joint Standing Committee on Foreign Affairs, Defence and Trade 2015, p. 6.
  4. ↑ Department of Defence 2018, p. 11.
  5. ↑ Department of Defence 2016, p. 6.
  6. 1 2 Thomson 2017, p. 209.
  7. ↑ "Importer/Exporter TIV tables". Stockholm International Peace Research Institute. Retrieved 29 January 2018.
  8. 1 2 Dziedzic, Stephen (29 January 2018). "Federal Government accused of contributing to global arms race with defence exports push". ABC News. Retrieved 29 January 2018.
  9. ↑ Riordan, Primrose (29 January 2018). "Coalition's $3.8bn bid to drive defence exports". The Australian. Retrieved 29 January 2018.
  10. ↑ Ferguson 2010, p. 5.
  11. ↑ "Australian Defence Magazine". Retrieved 29 January 2018.
  12. ↑ "Asia-Pacific Defence Reporter". Retrieved 29 January 2018.
Works consulted
  • Department of Defence (2016). 2016 Defence Industry Policy Statement (PDF). Canberra: Department of Defence. ISBN 9780994168078.
  • Department of Defence (2018). Defence Export Strategy. Canberra: Department of Defence. ISBN 9780648097716.
  • Joint Standing Committee on Foreign Affairs, Defence and Trade (2015). Principles and Practice - Australian Defence Industry and Exports. Canberra: Parliament of Australia. ISBN 978-1-74366-316-5.
  • Thomson, Mark (2017). "The Cost of Defence: ASPI Defence Budget Brief 2017-2018". Canberra: Australian Strategic Policy Institute. ISSN 2200-6613.

Further reading

  • Cain, Frank, ed. (1999). Arming the Nation: A History of Defence Science and Technology in Australia. Canberra: Australian Defence Studies Centre. ISBN 0-7317-0433-9.
  • Davies, Andrew; Layton, Peter (24 November 2009). Special Report Issue 25 - We'll have six of them and four of those: Off-the-shelf procurement and its strategic implications. Canberra: Australian Strategic Policy Institute.
  • Davies, Mark (February 2018). "Can Australia Fight Alone?". Australian Foreign Affairs (2): 43–66.
  • Ferguson, Gregor (22 December 2010). Risks and rewards: Defence R&D in Australia. Canberra: Australian Strategic Policy Institute.
  • Mellor, D.P. (1958). The Role of Science and Industry. Australia in the War of 1939–1945. Series 4 – Civil - Volume V. Canberra: Australian War Memorial.
  • Ross, A.T. (1994). Armed and Ready: The Industrial Development and Defence of Australia 1900-1945. Sydney: Turton and Armstrong. ISBN 0908031637.
  • Schaetzel, Stanley S. (1986). Local Development of Defence Hardware in Australia. The Strategic and Defence Studies Centre Working Paper No. 100. Canberra: Research School of Pacific Studies, Australian National University. ISBN 0-86784-845-6.
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