NIOA Group CEO Rob Nioa says it’s time for Australia to step up and win the industrial capability battle.

In a blunt warning to the nation’s premier defence gathering in Canberra last night (Eds: Wednesday, June 14), Mr Nioa said the consequences of outsourcing military production could be dire against a backdrop of the most critical period in decades.

While the challenges are enormous, so too is the ability of Australian industry to meet them, but it needs to be brought into the fight – and soon, he said.

Before an audience including Australia’s most influential decision-makers across Government, Defence and the ADF, Mr Nioa said the potential for conflict in our region was “at a scale that we have not seen since World War 2”.

“This is industrial scale conflict that requires a capable and fully mobilised Australian industrial base to deter it,” Mr Nioa told the Australian Industry & Defence Network (AIDN) dinner.

“If we are to deter aggressors we need to demonstrate that we can win the industrial battle. The people that can do that for Australia are in this room.”

But the head of Australia’s biggest privately-owned supplier of munitions to the ADF said industry investment in building sovereign capability would be stymied by an over dependence on Foreign Military Sales (FMS).

“The biggest risk to getting Australian industry into the fight, is outsourcing all of our immediate requirements to FMS. That will pull the rug out from under us quicker than anything,” he said.

“If we have nothing to do we can do nothing. We need to start now. The Ukraine war has highlighted the significant industrial challenges in sustaining and winning large scale conflicts.

“And it has exposed significant limitations in the current scale of the combined allied defence industrial base.

“Previous conflicts have shown us that a nation must start to mobilise its defence industrial base around four years before it can mobilise its defence force. Our adversaries have done precisely that and more.”

Mr Nioa singled out key points in the recently-released Defence Strategic Review (DSR), including:

• That Australia is facing “the prospect of major conflict in our region that directly threatens our national interest”.
• It signalled the end of strategic warning time for that conflict to occur, and said “ending warning time…necessitates an urgent call to action…”
• “Defence’s current approach to defence acquisition is not fit for purpose”.
• That “procurement risk must be based on minimum viable capability in the shortest possible timeframe”.
• That “Australia must be more self-reliant so that we are able to contribute more to regional security”.
• And that will require a shift to “strengthening Australia’s sovereign military and industrial capabilities”.

“I urge the Government and Defence to engage more urgently with the Australian industrial base and industrialists,” Mr Nioa said.

“I suspect I speak for the room when I say there is a sense that Australian industry is currently sitting on the sidelines, waiting to be brought into the fight.

“I also don’t think it is well understood how commercially draining and unrewarding it is to build new industrial capabilities.

“From a commercial point of view that represents years of development, construction and commissioning effort, all while losing money, taking on risk and forgoing alternate opportunities.

“That needs an industrial base that is solely focused on the national interests of Australia. That industrial base is sitting in this room and ready.”