Published on 3 August 2020
On 1 July 2020, Australia announced a pivot to its defence posture and strategy based on increased spending, force projection and enhanced capability to meet the regional disruption caused by China’s muscle flexing.
When launching the 2020 Defence Strategic Update and 2020 Force Structure Plan, Australia’s Prime Minister, Scott Morrison, said: “This simple truth is this: even as we stare down the COVID pandemic at home, we need to also prepare for a post-COVID world that is poorer, that is more dangerous, and that is more disorderly.
“We have been a favoured isle, with many natural advantages for many decades, but we have not seen the conflation of global, economic and strategic uncertainty now being experienced here in Australia in our region since the existential threat we faced when the global and regional order collapsed in the 1930s and 1940s.”
Morrison got more specific about the most significant source of danger in a television interview later that day, when he said: “Today is all about recognising the world is changing. The big competition between China and the United States means tensions are much higher.”
ADF thinking, strategy and planning is shifting gears
The new strategic objectives that the Morrison Government has set for the ADF are to deploy military power to shape Australia’s strategic environment, deter actions against Australia’s interests and, when required, respond with credible military force. The ADF has also been directed to prioritise the Indo-Pacific region.
The Government wants to be able to hold adversaries at risk from greater distance and thereby increase the costs involved in threatening Australia’s interests. Accordingly, Australia will invest in more lethal and long-range capabilities to hold adversary forces and infrastructure at risk further from Australia, including longer-range strike weapons, offensive cyber capabilities and area denial capabilities.
Australia will also invest in capabilities to give it better awareness of the Indo-Pacific region and to support regional engagement, while substantially increasing our air and sea lift capability to ensure we can rapidly respond to events across our region.
More spending on defence capability, more opportunity for defence industry
Australia’s previous target of 2% of GDP for Defence spending is now a ‘floor’ and not a ‘goal’. Capability investment will increase to AUD 270 billion (USD 190 billion) over the next decade, up from AUD 195 billion (USD 135 billion) for the decade following the 2016 Defence White Paper. The new 10-year funding arrangements will provide the ADF with greater funding certainty. It will also provide significantly increased opportunity for defence industry.
Coupled with Australia’s new free trade agreement procurement rules that provide better protections to contractors, now is a great time for defence contractors to consider further investments in the Australian defence industry.