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Australia's defence procurement is narrowing and becoming less resilient, with 127 East Advisory's Colin Storey
· 36 min
Episode Australia's defence procurement is narrowing and becoming less resilient, with 127 East Advisory's Colin Storey
Australia's defence industry faces a period of growing consolidation and uncertainty, how is past procurement impacting national security of the future? Speaking with Defence Connect news editor Robert Dougherty, 127 East Advisory director Colin Storey, a former head of growth at Raytheon and Royal Australian Navy patrol boat navigator, discusses his analysis of major defence contracts awarded over the past decade and what the data reveals about Australia's defence industrial base.
Storey's analysis of 373 contracts found more than 27 per cent went directly through foreign military sales, while more than half of the remaining contracts went to foreign-owned companies operating in Australia.
Of the Australian-owned businesses receiving major contracts, much of the spending was concentrated in areas such as infrastructure, facilities and fuel, with Austal emerging as the only Australian-owned defence specialist among the top 20 recipients.
The pair also discuss the gradual offshore consolidation of Australia's defence industry, with major international primes acquiring at least 16 Australian companies over the past four decades.
Combined with the growing cost of major programs and the funding demands of AUKUS, Storey warns this approach could place further pressure on established defence companies, with some potentially reconsidering their long-term presence in Australia.
The pair examine how countries including Sweden, Norway, Finland and Israel have developed successful defence companies by aligning procurement with national priorities, supporting specialised sovereign capabilities and helping domestic firms access export markets.
Looking towards the next decade, Storey expects further consolidation across the Australian defence industry, alongside increased mergers and acquisitions as companies compete for a smaller number of major programs. Australia risks developing a narrower and less resilient defence industrial base unless procurement, sovereign capability and export policy are more closely aligned with the nation's long-term defence strategy, he warns.
Enjoy the podcast, The Defence Connect team
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