17.02.2017

ADF’s support for foreign military equipment sales ramps up


The first biannual Australian Military Sales Equipment Catalogue is now available to entice buyers to pick up materiel no longer needed by the Australian Defence Force.

The catalogue is the latest step in the ramping up of Australian military exports, and comes with increased direct and indirect support for local defence manufacturing, which claimed more than $4.2 billion in sales value last financial year.

The ADF already sells its own defence materiel to foreign governments, typically where a new capability has proven itself in the operational environment and older equipment has become obsolete or surplus.

Additionally, the Department of Defence supports the sale of controlled defence materiel developed in Australia for export. But despite annual sales figures in the billions, it’s commonly believed this area has been struggling with the decline of local manufacturing.

A 2015 inquiry into Defence industry exports found a strong relationship between export potential and a sustainable domestic capacity to design, manufacture and support defence materiel. In other words, with exports come more Australian jobs and a viable local manufacturing industry. Relying on Australia as the sole purchaser wasn’t in itself enough to sustain a viable local industry.

The bipartisan report recommended the Department of Defence increase the level of support it provides to defence exports, echoed in the First Principles Review and 2016 Defence Industry Policy statement. Shortly after, the government named a Minister for Defence Industry, established Centre for Defence Industry Capability and has promised a new set of trade events to the annual calendar.

Such a push is not new.

In 2012, further support was added for Australian defence manufacturers seeking to export their products with the establishment of the Australian Military Sales Office. Before that, the Defence Export Unit was the main player, launched in 2008, operating under the brand “Team Australia”.

The difference now is the marketing is savvy enough that it might work.

Arms salesman in the Cabinet

Defence Industry Minister Christopher Pyne was suitably proud of the new catalogue and what boosted sales could mean.

“The sale of ex-ADF equipment gives Australian industry the opportunity to bid for work in the sustainment or refurbishment of that equipment to a foreign government,” Pyne said in a statement on Thursday.

“For example, in the sale of C-130H aircraft to Indonesia with a sale price of $15 million, two refurbishment contracts resulted for Australian industry valued in excess of $100 million.”

Pyne hoped that our friends and allies will consider acquiring capability withdrawn from Australian front-line service but nonetheless still viable in the context of their capability needs.

Central to this disposal is the ensuring value for money in the disposal of ex-ADF equipment.

What’s on sale?

Some of the equipment on sale is still actively part of Australia’s operational capability, with a shelf-life of many more years. That’s necessary because military equipment is big ticket stuff and usually needs a long planning (and budgeting) period, especially for foreign governments of a size that would typically be looking to Australian disposals.

The locally developed Bushmaster Protected Mobility Vehicle from Thales Australia won’t be withdrawn from Australian service until 2030. The IED-resistant vehicle is all about high mobility and high protection across a range of mission profiles, from combat to electronic warfare to route clearance and medical evacuation. A lighter version known as the Hawkei is in pre-production and designed to be helicopter portable.

Other vehicle offerings are from manufacturers including General Dynamics Land Systems — Australia and BAE.

The Pilatus PC9/A and spare Seahawk maritime helicopters are also for sale.

ADF technolology classified as sensitive and restricted to allies include the soldier worn power and data hub and the Austal Patrol Boat 40.

Much of this technology is subject to Defence export controls to ensure both the technology and the buyer are consistent with Australia’s national interests, international obligations, human rights and regional stability.

These sales have in the past been controversial. $13 million worth of Australian-made military equipment exported to Turkey, Oman and Saudi Arabia for the first time in 2012 raised eyebrows, but that certainly wasn’t the last sale of sensitive and lethal equipment to that part of the world.

Defence approved restricted exports worth more than $4.2 billion in 2015/16 — only 63% of exporters provided the value of their sales to Defence, so the total number is likely to be much higher.