Defence Strategic Review

Mr PATTERSON (Morphett) (14:10): My question is again to the Minister for Defence and Space Industries. What actions, if any, is the minister undertaking to ensure that small and medium South Australian businesses do not exit the defence sector? With your leave, and that of the house, I will explain.

Leave granted.

Mr PATTERSON: In response to Labor's Defence Strategic Review, Defence Teaming Centre Acting CEO Tim Dore said some South Australian businesses will:

…take what’s available, there will be other companies that will work to keep alive by also moving into other industries like agriculture or mining, and there will be those that will exit the defence industry completely…

The Hon. S.E. CLOSE (Port Adelaide—Deputy Premier, Minister for Industry, Innovation and Science, Minister for Defence and Space Industries, Minister for Climate, Environment and Water) (14:10): There is always a churn that occurs in the profile of supply chain companies, particularly in defence. That is the case because there are the often unpredictable—from a company's perspective—changes in decisions about where investments will occur. There was a setback, obviously, when the previous Liberal-National government in Canberra cancelled the submarine contract with the French, for example, where companies that had been—

The Hon. J.A.W. Gardner interjecting:

The Hon. S.E. CLOSE: I'm simply explaining the consequences of some decisions that occur in Canberra—

Members interjecting:

The SPEAKER: Order, member for Morialta!

The Hon. S.E. CLOSE: —and not seeking to make a party political point. So the consequences for some companies who were engaged in partnerships with French companies, for example, in order to be part of those supply chains, of course, were that they were unable to continue, and indeed many lost funds that were not able to be recovered. That, unfortunately, does cause some companies involved in the defence supply chain to be wary of overinvesting until they are certain that there are investments that are worthwhile and will pay off.

The recent strategic review, similarly, although not a dramatic change in the way in which defence procurement will occur, does have a shift in emphasis, and each company will be working on how that fits for their own priorities. Of course the Defence Teaming Centre, as has been pointed out, is part of working collaboratively across many defence supply chain companies.

The role of Defence SA and also the Department for Industry, Innovation and Science is to work with those companies to ensure that they are fully aware of what is coming up and fully aware of all opportunities and have access to support in determining what investments they ought to make at what time. Part of that, is to make sure that they've got the right skill set in their workforce. The work that's being undertaken at the moment by the task force that was established following the skills summit last year is part of making sure that that skilled workforce is in train.

There is a deep engagement occurring, noting that we are unable to control all elements, not being the defence procurers, in ensuring that the companies in South Australia are in the best position. What is very clear is that there will be an enormous amount of work, not only for people directly at Osborne, as a result of the decisions made recently by the federal government, but through the supply chain, provided they are able to develop the capability at the right time and at the right level, and this state government will be working with those companies to ensure that that occurs.