18 DEFENCE defence needs . Across the Australian economy, our defence industry is diversifying and expanding

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  • DEFENCE INDUSTRIAL CAPABILITY PLAN

    DEFENCE INDUSTRIAL CAPABILITY

    20 18

    PLAN DPSMAR031-18

  • © Commonwealth of Australia 2018

    ISBN: 978-0-6480977-5-4 (Print)

    ISBN: 978-0-6480977-6-1 (Online)

    This work is copyright. Apart from any use as permitted under the Copyright Act 1968 (Cwth), no part may be reproduced by any process without prior written permission from the Department of Defence.

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    DEFENCE INDUSTRIAL CAPABILITY PLAN

    CONTENTS PAGE

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    DEFENCE INDUSTRIAL CAPABILITY PLAN

    Ministers’ Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

    Chapter 1: Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

    The Defence Industrial Capability Plan . . . . . . . . . . . . . . . . . . . . . . . . . 14

    Sovereign Industrial Capability Priorities . . . . . . . . . . . . . . . . . . . . . . . 17

    The Integrated Investment Program Capability Streams . . . . . . . . . . . . 21

    Other Defence industry initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

    CASE STUDY: Realising Opportunities . . . . . . . . . . . . . . . . . . . . . . 27

    Chapter 2: Building a Sovereign Industrial Base . . . . . . . . . . . . . . . . . . . . .29

    Sovereign Industrial Capability Assessment Framework . . . . . . . . . . . . 29

    Sovereign Industrial Capability Priorities . . . . . . . . . . . . . . . . . . . . . . . . 36

    Sovereign Industrial Capability Priorities and the Integrated Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

    Support for Australia’s Sovereign Industrial Capability Priorities . . . . . . . 41

    Chapter 3: Integrated Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . .51

    Stream One: Intelligence, Surveillance, Reconnaissance, Electronic Warfare, Space and Cyber . . . . . . . . . . . . . . . . . . . . . . . . . . 54

    Stream Two: Key Enablers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

    Stream Three: Air and Sea Lift . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

    Stream Four: Maritime and Anti-Submarine Warfare . . . . . . . . . . . . . . . 62

    Stream Five: Strike and Air Combat . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

    Stream Six: Land Combat and Amphibious Warfare . . . . . . . . . . . . . . . 68

    Sustainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

    Additional Sources of Defence Acquisition and Sustainment Information 72

    CASE STUDY: Diversifying into defence industry . . . . . . . . . . . . . . 76

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    CONTENTS

    Chapter 4: Delivering Australia’s Future Defence Industry . . . . . . . . . . . . . . .79

    Strategic growth of defence industry capability . . . . . . . . . . . . . . . . . . 80

    A broader and deeper defence industrial base . . . . . . . . . . . . . . . . . . . 87

    A strategic approach to defence industry investment . . . . . . . . . . . . . . 89

    An innovative and competitive Defence industry . . . . . . . . . . . . . . . . . . 92

    CASE STUDY: SME innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

    A robust defence industry export capability . . . . . . . . . . . . . . . . . . . . . 97

    Enhancing Defence and industry partnerships . . . . . . . . . . . . . . . . . . 100

    Chapter 5: Reviewing and Updating the Defence Industrial Capability Plan . .113

    Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

    Australian Defence Industry Input . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

    Annex A: Australia’s Defence Industry Today . . . . . . . . . . . . . . . . . . . . . . .117

    Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

    Defining and continuing to assess Australia’s defence industry . . . . . . 123

    A description of Australia’s defence industry . . . . . . . . . . . . . . . . . . . 124

    Transitioning to the future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

    CASE STUDY: Global partnerships delivering next generation land vehicle capability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

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    Annex B: Australian Industry Opportunities in the Integrated Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133

    Stream One: Intelligence, Surveillance, Reconnaissance, Electronic Warfare, Space and Cyber Program Analysis . . . . . . . . . . . 133

    Stream Two: Key Enablers Program Analysis . . . . . . . . . . . . . . . . . . . 137

    Stream Three: Air and Sea Lift Program Analysis . . . . . . . . . . . . . . . . 141

    Stream Four: Maritime and Anti-Submarine Warfare Program Analysis 143

    Stream Five: Strike and Air Combat Program Analysis . . . . . . . . . . . . . 146

    Stream Six: Land Combat and Amphibious Warfare Program Analysis . 149

    Annex C: Key Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153

    Sovereign Industrial Capability Priority Grants . . . . . . . . . . . . . . . . . . 153

    Integrated Investment Program Capability Stream Industrial Strategies 154

    Industry Development Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

    Sovereign Industrial Capability Priorities Implementation Plans . . . . . . 156

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    INTENTIONALLY BLANK

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    DEFENCE INDUSTRIAL CAPABILITY PLAN

    Ministers’ Foreword We are pleased to release the 2018 Defence Industrial Capability Plan .

    Australia’s first defence industry plan provides the Government’s long-term vision and roadmap for Australian defence industry, along with the information, resources and support needed to grow our sovereign defence industry base .

    The need for a Defence Industrial Capability Plan was recognised in the Government’s 2016 Defence White Paper and 2016 Defence Industry Policy Statement, and builds on the Naval Shipbuilding Plan the Government released on 16 May 2017, and the Defence Export Strategy on 29 January 2018 . These documents made clear that a strong, sustainable and secure Australian defence industry is fundamental to achieving Defence’s mission today, and to support a future force that is positioned, resourced and structured to defend our nation and advance our regional and global Strategic Defence Interests . Our defence industry is a critical national strategic asset for Australia . We must build a strong, sovereign naval shipbuilding and broader defence industry to manage strategic risk, defend our nation and grow our economy .

    The Government is committed to providing the best capability possible to the men and women who serve our nation . Our more than $200 billion investment in defence capability over the next decade under the Integrated Investment Program will deliver a more potent, integrated and agile Australian Defence Force . This also brings new opportunities and challenges for our defence industry . Australian industry will need to grow and upskill to be more internationally competitive and help meet our defence capability needs .

    The Government is focused on ensuring that Australia’s industry is positioned to meet Defence’s future requirements and to maximise economic growth and high-tech jobs in the sector . As demonstrated in the significant level of Australian industry involvement in the Combat Reconnaissance Vehicle program announced on 14 March 2018, the Government will continue to maximise Australian industry involvement in our defence capability planning, acquisition

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    DEFENCE INDUSTRIAL CAPABILITY PLAN

    MINISTERS’ FOREWORD

    and sustainment, building the defence industrial base we need to achieve o