SMEs seek a viable defence industry

5 Nov 10

Statement by Mr Graham Priestnall, National President, Australian Industry & Defence Network

The National Executive Committee of the Australian Industry & Defence Network (AIDN) met in Sydney today to address issues facing Australia’s small and medium enterprises (SME) in the defence industry. AIDN National President, Graham Priestnall reiterated AIDN’s intention to work with the Government to leverage Australia’s position as the world’s 8th largest purchaser of defence goods and services.

Despite Australia’s significant buying position of military equipment, the current defence purchasing trend is resulting in local defence companies losing business to international suppliers. The trend is driven by a preference for defence to buy commercially and military available, off the shelf solutions with a history of use in the country of origin.  The consequence is that a significant number of Australian companies are under stress and are opting out of the defence industry.  This results in a loss of Australian defence industry capability and taxpayer’s money unnecessarily going offshore.

Australian defence industry is being encouraged by Defence to be competitive and innovative to enable entry into the Global Supply Chain of the major international defence companies.  While there are various support programs aimed at assisting SMEs in the global market, Australian companies are increasingly faced with an uneven playing field. The international prime contractors will favour suppliers from countries with local industry content or offset programs, as has allegedly occurred with Israel insisting upon a Joint Strike Fighter offset program that will direct $US 4 Billion to Israeli companies.  

The AIDN Executive Committee is addressing the issues facing Australia’s SME defence companies and will propose solutions to what is perceived as an inequitable global market.  

Graham Priestnall said that AIDN represents the interests of over 800 member defence industry SMEs with 29,000 employees Australia wide. He noted that the opening line of the Defence Industry Policy Statement states, “The defence industry is crucial to Australia's defence and national security”.

The implementation of the defence industry policy needs to be closely monitored and where necessary, amended to ensure the viability of the Australian defence industry SMEs.

For further information:
Graham Priestnall, AIDN National President
Mobile: +61 408 655 249