Parliament Updates

Zali Steggall MP advocates for Australian businesses in the Defence Industry Development Grant

5 June 2024

Well, we live in a very volatile geo-political era, catastrophic war rages in the Middle East and has heightened regional tensions, we have of course seen the horrific taking of hostages by Hamas, and we must use all possible diplomatic pathways to unequivocally call on the Israeli government to uphold the international rule of law, keep civilians safe, and to encourage all sides to agree to a permanent cease-fire. The war in Ukraine continues after the two years, Australia remains a steadfast ally of Ukraine in the face of needless Russian aggression. Australia has now contributed more than $1 billion in total assistance, including some $880 million in military support. And of course, we continue to see increasingly belligerent and authoritarian behaviour from China in the South China Sea, showing little regard for international norms. Then there is the threat of climate change and I have an ongoing request from the government for the release of the office of National intelligence report in relation to Australia's exposure from a security point of view. So, that is the backdrop that we face.

The new money in the budget in relation to defence, and this is appropriation so this is why we are here is to ask these questions. The new money allocated to defence as part of this year's budget totals some $5.7 billion. It is a huge part of our budget. It focuses on three priorities, the AUKUS submarines, surface warships, long-range strikes, targeting autonomous systems. AUKUS is at its core a technology sharing alliance, between Australia, the United States and the United Kingdom. It is also closely linked to the Inflation Reduction Act and to the focus on developing sovereign manufacturing capacity in the world's energy transition especially for the UK, Australia and the US, and reducing the manufacturing reliance on China. It is essential within this framework that substantial and opportunity flows to Australian industries and companies. Especially the smaller ones that are traditionally squeezed out by larger, more well-known international companies. 

I know there are many questions as to how Australian companies and workers can participate and contribute to a major defence projects and to our nations national security. I note that as part of this year's budget allocation, there is some $165.7 million put aside. to establish a Defence Industry Development Grant program. Its funding according to the government is to support Australian businesses, to increase their scale and competitiveness and respond to capability requirements required within the defence portfolio in the years ahead. This is a worthy aim but all too often, many businesses find the procurement pipeline inaccessible. I have businesses that face these challenges in Warringah, producing for example, drones and microchips and other capabilities that defence will need in the coming years. All too often, they are able to do business overseas, ironically more easily than they can do it in Australia. And that's wrong and should be fixed.

So, my questions to the government and to the minister are: how will sovereign Australian businesses be defined in the eligibility criteria for the Defence Industry Development Grant program, at present to be classified as an Australian business, an ABN will suffice. Will the Defence Industry Development Grant program require substantially more significant ties to Australia as evidence of being a genuinely Australian business to ensure that we don't really just have a bit of a cover-up, essentially overseas company benefiting from the Australian grant process. Also, how will Defence ensure Australian businesses get their fair share of opportunities in bidding for the Defence Industry Development Grant program? Particularly small and medium enterprises?

A further question is how will you, the Government, ensure small and medium enterprises like those I represent in Warringah, including drone shields and Warringah plastics for example, get the industrial uplift to genuinely partake in the Defence technology and procurement pipeline that has let so many down, to date. Further, what key industries do you anticipate will benefit from the technology sharing alliance of AUKUS, it's really important that the government comes out on the front foot and be specific about where those technology uplift areas will be. Finally, AUKUS includes very specific workforce parameters, particularly concerning security clearances and the use of engineers and so it is likely to absorb many Australian-born engineers, because migrant engineers are excluded. So, what workforce planning is currently being done by the Minister to ensure we meet those requirements?