SPECIAL REPORT: A strong network has developed in WA to help local businesses gain access to defence opportunities across the country.
A strong network has developed in WA to help local businesses gain access to defence opportunities across the country.
Western Australia achieved two minor records when Senator Linda Reynolds was named defence minister and Melissa Price chosen as minister for defence industry.
The pair of appointments means the nation’s two most senior defence portfolios will be held by WA politicians.
It also means that three of the six most recent national defence ministers have been representatives of the state.
(Click here to view a PDF version of the full special report)
Prior to Ms Reynolds, former senator David Johnston held the role for 15 months until 2015, while former member for Perth, Stephen Smith, was defence minister from 2010 to 2013.
Whilst WA has not picked up as much work as some had hoped, in that time an ecosystem has developed to support local businesses aiming for more.
Senator Reynolds, in particular, has been a passionate advocate of WA companies getting a go in defence, and has been widely credited for her role in the selection of Henderson as Australia’s second major shipbuilding hub.
The creation of a state defence issues portfolio in 2017, held by Paul Papalia, has also played a part.
Defence Issues Minister Paul Papalia. Photo: Gabriel Oliveira
Organisations that play a role in the ecosystem supporting contractors include the Chamber of Commerce and Industry of WA, Australian Industry Defence Network WA branch, Defence West, and the Henderson Alliance.
In addition, there will be at least two major conferences to connect prime contractors, smaller businesses and high level names in defence this year.
One is Perth USAsia Centre and Defence West’s IndoPacific Defence Conference 2019, which is in its second year.
It takes a broad strategic approach to defence issues.
The Submarine Institute of Australia’s Submarine Science, Technology and Engineering Conference will be held in November, with a more technical focus.
Indo-Pacific positioning
Perth USAsia Centre chief executive Gordon Flake said Perth was effectively Australia’s Indian Ocean capital.
Professor Flake said WA’s political representatives had been very successful in the past three or four decades in giving the state a bigger role in national defence thinking.
Many significant ideas had been led out of Perth, including the concept of the Indo-Pacific region, he said.
“Kim Beazley (defence minister from 1984 to 1990) was responsible for dragging the Australian defence forces to recognise that we had to have a two-oceans strategy, that we couldn’t just defend the Tasman Sea,” Professor Flake said.
“When he pushed for, and was successful in the establishment of, Fleet Base West, that was really the start of Australia even thinking about the Indo-Pacific.”
Professor Flake told Business News the centre’s conference would include speakers from businesses such as Boeing and representatives of military across the Indo-Pacific, including Japan, the US and India.
“The intent is to build an ongoing forum here in WA that changes the way Australia thinks about our role and introduces our state and city to the region,” he said.
“Australians east of the Nullarbor are just shocked when they hear we have factories out here.
“When they understand that we have, by tonnage, the largest shipbuilder in Australia, they’re just shocked.”
Prime contractors would also be involved.
Professor Flake said one intended outcome from the conference was that it would help small businesses better understand the needs of prime contractors and governments.
“This is part of an effort to do more,” he said.
Although much of the attention has been on where ships would be built, Professor Flake argued WA would be a big winner in sustainment and maintenance work.
“The South Australian (shipbuilding) capacity is much more of an industrial policy, it’s a normative national decision to create jobs in (that state),” he said.
“Our relative proximity to the region, and deep resource ties give us an opportunity to ... build much more for the future.
“Maintenance and ongoing servicing is going to be in WA, not SA.
“Over the lifetime of a program, the value is much more in maintenance and servicing than it is in the actual build, in terms of ongoing jobs.
“That ties to our geography, if (submarines are) operating in this theatre, it’ll take an extra five days to steam round to SA.”
For the Submarine Institute, it will be the first time the organisation’s technology conference is hosted in Perth, institute secretary Frank Owen told Business News, having previously held a politics and strategy conference here. Up to 400 delegates are expected.
“We recognise that there’s a need to extend it out beyond where they build the subs, towards where the subs are maintained and sustained as well,” Mr Owen said.
“There’s an opportunity for the offshore oil and gas industry to look at diversifying … and potentially for some defence companies that might not be operating in the offshore space.
“The whole idea is to see what synergies can be made between the two environments.”
He said he expected senior representatives from the US and France, in addition to local leaders.
Some of the more technical topics to be covered will include signal processing, hydrodynamics, integration of unmanned vehicles, pump jet propulsion and stealth technology.
Strong support
The Henderson Alliance is one part of the defence ecosystem, with a focus on small and medium-sized enterprises.
It was created two years ago and now has more than 100 members, according to co-founder Darryl Hockey.
Darryl Hockey says the alliance is supporting members access interstate supply chains. Photo: Attila Csaszar
Mr Hockey said although major naval construction was not yet under way in WA, the alliance was active in getting members to become involved in the supply chains of prime contractors.
“That process is happening last year, this year and next year even before any ships are being built,” he said.
“The big companies need to do due diligence on the SMEs to make sure they’ve got the requisite skills to be able to perform, to make sure they have their cybersecurity in place.”
Some members have already had success, but it was difficult trying to become integrated in national supply chains from WA, Mr Hockey said.
“The main bulk of opportunity would be to contribute to the naval construction programs that are going to be occurring in SA, where there’s about $85 billion worth of work,” he said.
“As much as half of that will need to be conducted interstate because SA simply just does not have the capabilities and capacity to be able to deliver those programs.
“While the vessels will be (assembled) in Adelaide ... services, technology, parts and componentry will be transferred over.”
The alliance was working with the state government to improve representation of local businesses looking east.
“A lot of the eastern states governments are working strongly with their small business sector in assisting them in entering the supply chain; we’re actively working with the state government to encourage it to do likewise,” Mr Hockey said
“We really want it (the state government) to take the lead, to work alongside small business, and really target this opportunity to be involved in construction programs in the east.”
The state government’s advocacy of the industry is led by the Office of Defence West, which was established in 2017.
Matt Moran, who was an adviser to former defence minister Christopher Pyne, has recently been tapped as executive director.
The government earmarked about $3 million in its recent budget for the office.
Defence West declined an interview for this feature, but a spokesperson said the office had hosted local companies on stands at expos.
The office has also developed the Defence Industries Strategic Plan, the spokesperson said.
Earlier this month, the government also announced a Defence Advisory Forum, which will give guidance on issues such as infrastructure and skills requirements.
The forum will be chaired by WA Defence Advocate Raydon Gates, who was a rear admiral in the Navy.
Also in June, the state government said it would establish a Defence Science Centre, with about $230,000 announced for an internship program in partnership with the Australian Mathematical Sciences Institute.
The program will support 10 PhD students to work on small business defence innovation projects.
National cause
Mr Hockey said the Henderson Alliance would be working as part of a bigger national coalition of industry bodies – the Australian Defence Alliance – to lobby the federal government on big issues.
One such battle was ensuring that content rules were not manipulated.
“(We need to) make sure that big overseas companies can’t circumvent the spirit of developing an Australian sovereign industry,” he said.
“In the mining industry, they had local content requirement.
“Some companies came in from overseas, set up an ABN or a post box, became ‘local’ and entered into the supply chain.
“We’re trying to prevent things like that.”
Austal is acting to encourage more women into its workforce. Photo: Attila Csaszar
Workforce development
One strong theme that emerged talking to defence contracting leaders is that there is not yet a skills shortage forming in the industry.
But that doesn’t mean there has not been thought given to preventing such an outcome.
Henderson Alliance’s Mr Hockey said there was already planning ongoing to make sure the state’s workforce would be properly prepared with skills needed for future shipbuilding work.
The peak requirements for some roles won’t be until 2027, however, he said.
In late May, Edith Cowan University and South Metropolitan Tafe announced a partnership with the federal government’s Naval Shipbuilding College, which aimed to create clearer pathways for students into shipbuilding.
The state government opened a new Tafe shipbuilding training facility at Naval Base in May.
That followed an investment of $2.4 million.
Henderson shipbuilder Austal has also had a big focus on training, including hiring a women-only apprenticeship class this year as part of a bigger plan to boost female participation in the workforce.
