The defence link to Australia's business future

The court case is confined to a very simple and specific question: whether the highly decorated former soldier Ben Roberts-Smith was defamed in a series of stories published by The Sydney Morning Herald, The Age and The Canberra Times newspapers in 2018. The papers deny the defamatory imputation nevertheless additionally argue that the articles were justified and contextually true, and this is the issue that gives the trial such massive resonance.

Although the lawyers will do everything they can to confine the case to the framing of the allegations, the reality is that even the most specific arguments will have an immense resonance in the wider community. This case, together with the forthcoming and separate investigations into war crimes will establish the political background to a massive boost in spending on defence equipment.

To understand the huge scale of this rearmament it's just necessary to realise that - in a time of minimal inflation - the defence budget has soared from $32.4 billion just five years ago to $44.6 billion today. The Australian Strategic Policy Institute's Dr Marcus Hellyer points out an extraordinary amount of this is being channelled to industry. Last year the local spend alone grew by a remarkable 35 per cent and over the longer term capital acquisitions will soar to eat some 40 per cent of the total budget.

This is a massive sum to be forking out at the same time as government's attempting to rein-in overall spending, and that's what will be concerning Treasury.

In stark contrast to Labor back in 2008, this government's decided to turn the money tap on and just let the spigot run. Navy and army are the services currently standing to benefit most from the flow of new equipment. Contracts have been signed for researching new submarines and building future frigates, while new armoured fighting vehicles are currently undergoing testing by the army. Although two foreign companies - Korea's Hanwha and Germany's Rheinmetall - are vying for the contract to produce some 450 of these, because they'll be built in Australia considerable downstream work will emerge from the project. And this is the link to Brisbane where, last week, Land Forces 2021 sprawled across the huge floor of the convention centre.

This is the premier networking function for defence business: a chance for exhibitors to show off their wares. It also provides a remarkable view of just how extensive this sector is and how vital it's becoming politically. Because of parliamentary sittings and estimates this year's conference didn't initially capture its usual haul of politicians and top brass, nevertheless the key people ensured they did make it there.

Industry Minister Melissa Price is responsible for handing out the money from this opened purse and she's been indefatigably looking for opportunities to build Australian industry. This will have its inevitable political pay-off for the government, something the opposition appears incapable of addressing at a national level. While state governments of both flavours had their own stands spruiking the benefits of investment, federally (and in diametric contrast to their state counterparts) Labor has been flat-footed dealing with defence industry.

The party seems to believe it's enough to question the quality of the spend without proposing alternatives or working through the alternatives. It's like a football team claiming it could win the game and then abandoning the arena. This is, of course, all part of the much bigger strategy of keeping the focus on the government's missteps and, if you were searching for any further reason for Labor's absence one just needed to wander outside the packed halls of the convention itself.

Attendees were welcomed with pounding drums, clashing cymbals and discordant trumpets, which enveloped the Brisbane convention centre in a weird, canorous sound. Every now and then a couple of police would plunge into the crowd arresting a demonstrator and, a couple of times, demonstrators infiltrated the cavernous halls where the armoured vehicles were on display, leaving stink bombs or to be carried out by police.

But their point was made.

Although the small protests never seriously threatened to disrupt the displays of military equipment, by extending over a full week they signalled a broader change in the political environment: defence industry risks becoming a political battleground. Exports are shifting from being seen as an unambiguous good (they make money) to a potential negative (if sold to repressive regimes). Any party that has no policy risks being exposed as irrelevant.

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Forge is one of those Canberra consultancies helping clients navigate the system, something that's become a speciality all of its own as CMAX Advisory regularly proves. ACT businesses like archTIS, FifthDomain and, critically, Penten are developing products that are at the cutting edge of technology. Among other products this company provides an outer skin, wrapping around computers and allow them to connect securely to wireless networks. This product is being used for the most highly classified applications by other "five eyes" nations, like the US and UK and demonstrates a roadmap for the future.

It's a concrete demonstration of exactly how Australian business can thrive. Once a product gains a position in this broader, English speaking marketplace it can benefit from huge economies of scale. In new areas, like cyber, that's possible. It's far more difficult in older areas like manufacturing big pieces of equipment.

This is a huge area - technologically, financially, and from a security perspective - but it's still growing. We can't, as a nation, address the future without a business plan.

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