NIOA Group CEO outlines future defence industry action plan

The Group CEO of the biggest Australian-owned supplier of military munitions has laid out a detailed plan to mobilise the nation’s defence industrial base, emphasising “it’s time for urgency, optimism and action”.

NIOA Group CEO Robert Nioa used a keynote speech to the National Press Club in Canberra today to unveil a report calling on the Australian Government to urgently implement a “national defence industry policy”, including setting aside $500 million in the May 2024 budget to buy from Australian-owned companies.

The 60-page report, ‘Developing Australia’s defence industrial base’, was jointly commissioned by Gilmour Space Technologies, Austal, Macquarie Technology Group, the NIOA Group and the Australian Industry & Defence Network (AIDN). It makes recommendations to fast-track sovereign capability by harnessing the collective power of Australian-owned defence primes and SMEs.

Mr Nioa highlighted the urgency of adapting to global security challenges while outlining a plan which he says will make the Australian Defence Force “more ready, stronger and a more powerful deterrent force for peace and stability”.

The plan calls for:

• A $500m investment, growing to $1b a year, in the Defence budget to acquire capabilities and services from Australian SMEs
• An urgent review of acquisition policies with a commitment to buy from Australian-owned and run companies
• An “Australian Defence Industry Steering Council” to collaborate with Defence and the ADF
• Redefining “industrial sovereignty” to drive government priorities
• Reviewing procurement rules to recognise both economic security and industrial sovereignty as “value for money”
• Growing direct partnerships with Australian companies and changing core equipment processes
• Engaging industry to prioritise AUKUS Pillar Two projects
• Re-framing the Strategic Industry Capability Priorities (SICPs) to focus on the “consumables of conflict”

As debate continues over the reforms outlined in the Defence Strategic Review (DSR) and with the impending release early next year of the Defence Industry Development Strategy, Mr Nioa said industry was ready and willing to step up.

“Give us the tools and we will finish the job,” he said, echoing British wartime Prime Minister Winston Churchill’s plea to the US in 1941.

“In this case the tools are the conditions that will allow strong Australian-owned and -run defence prime companies to emerge.

“The timing is urgent because of our difficult national outlook. The risk of conflict is real.”

The CEO warned that relying upon allied supply chains, especially in times of conflict, was risky.

“Even our most trusted security partners will be stretched in the event of a regional war,” he said.

“So, Australia must have more independent capacity to defend ourselves and to be a strong partner with our allies in collective defence.

“To be clear, independent capability and industrial collaboration with our allies are not competing objectives, they can certainly be one and the same.”

Mr Nioa stressed that foreign-owned defence primes and Foreign Military Sales had a key role in what the DSR has described as “accelerated preparedness”.

But he said sourcing strategies needed to align with homegrown capabilities and services -what he referred to as the “consumables of conflict”, including drones, shipbuilding, communications and data storage, munitions and traditional supplies such as fuel.

“Australian defence industry primes will become more capable partners to international primes who are an already active and welcome part of the Australian defence landscape,” he said.

“Australian-produced defence kit and services should be seen as complementary to what Defence buys from multinational defence primes.”

He called for a shift in mindset as too much defence industry policy had been made for defence industry rather than with it.

The proposed Australian Defence Industry Steering Council would work with government to shape and implement policy.

“The best way to shape defence industry policy is to bring successful Australian industry players to the table to collaborate and to have industry work closely with military users in the ADF,” he said.