Defence Industries

Mr PATTERSON (Morphett) (14:10): My question is to the Deputy Premier. Does the government have a plan to maximise the participation of South Australian industry in the defence and space supply chain and, if so, what is it? With your leave, and that of the house, sir, I will explain.

Leave granted.

Mr PATTERSON:The Australian recently reported that, 'In the absence of specific measures to ensure the participation of domestic firms, industry figures warned the new force posture plan would also favour foreign suppliers, eroding sovereign capabilities.'

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): I am pleased to speak about this very important issue because we should make no mistake that our role as state government is not to participate in considerations of the strategic nature of defence but to maximise the economic and therefore social benefit of having defence industry located here.

To do that we need to not only be successful as we have been in attracting large-scale projects, including most recently announced of course being the AUKUS submarines, but be able to ensure that our people are working on site and are also involved in the design and the innovations and the research associated with the complexity of those very large beasts, those large submarines.

We also need to make sure that our supply chain is as engaged as possible in providing be it components, be it design, be it project management, and even human resources contributions and IT contributions, that they are all able to feed into this process. That's important not only for those companies so that they are fully engaged themselves and growing but also because what tends to happen is that you have cognate businesses that are not exclusively devoted to defence that also start to get an uplift in their technological capability, their manufacturing capacity, their design capacity, their IT skills, and that then leads to what is often called the technological spillover into the economy from the existence of this very large, very sophisticated manufacturing.

So the South Australian government's task, as I say, is not simply to be fully present, engaged with the federal government in making sure that these projects come, but also to be as engaged in the skills and training involved in getting our workforce ready, working with the universities to make sure that they are offering the courses and they are engaging in the right kind of research, and working with supply chain companies of various sorts.

How that happens in South Australia happens in a variety of ways. One of course very immediate one is the Industry Capability Network, which is about directly making sure that smaller companies are plugged into the work of larger companies and are able to know what the tender processes are and how they are able to bid for them.

Of a different nature is having something like Lot Fourteen where both for defence and for space you are seeing companies that are innovating, able to research and benefit from the collaboration of being co-located to be able to get a centre that is attractive to the right kind of people who are going to be part of developing that more sophisticated side of our economy.

The work that we are doing with the two universities, considering the merger process, is not unrelated to this either. Each of the three universities in South Australia is very engaged with businesses in South Australia and how they can be better ready to participate in defence, for example Flinders University. We have put money into their Factory of the Future, Line Zero, which is a collaboration with BAE Systems and working on enabling companies, smaller companies, to be able to go and test technology and test mechanisms of manufacture in order to fully participate. But the merger of the other two institutions is about having a university of sufficient size to get the research input required for this state to be ready for AUKUS, amongst other benefits.

At each level of engagement what is important is that we make sure we highlight the best of what we have to offer, and make sure that that is very well understood by the large-scale manufacturers and that we are able to fully participate and benefit.