In this Series, LK examines the outcomes and recommendations of the Defence Strategic Review 2023 (DSR) to understand the challenges that lie ahead for the existing legal and regulatory landscape underpinning Australia’s defence industry.
Part 1, released on 15 August 2023 examined the initial recommendations from the DSR, including a renewed focus on the Indo-Pacific Region, the need for a national approach, the concept of enhancing the capacity for deterrence and the effects of climate change and disaster support relief on defence resourcing.
In this Part 2, LK provides an overview of the remaining recommendations.
LK has an experienced team with in-depth knowledge of the legal and regulatory climate, and the capacity to explain how the existing and future landscape will operate to facilitate the growth of the defence industry.
Part 2: The Defence Strategic Review – Remaining Recommendations
A key message of the DSR, as outlined in Part 1 of this Series, is that defence capability, policy and strategy is primarily focused on securing and maintaining peace, prosperity, and Australia’s security and sovereignty. The remaining recommendations build on this overarching message.
Recommendation 6: Partnerships
The DSR’s recommendation regarding partnerships highlighted that maintaining security in the Indo-Pacific region is a crucial strategic driver of Australia’s national interest. In this respect, although the alliance with the US was described as becoming more important to Australia, the DSR also emphasised the need for self-reliance to enhance Australia’s role in regional stability. This involves strengthening Australia’s sovereign military and industrial capabilities.
In addition to partnering with the US, the DSR underscores the importance of strategic relationships with regional neighbours, including India, Japan and New Zealand. It recommends that Australia actively engage in bilateral and multilateral opportunities that align with mutual interests in the Indo-Pacific. The DSR recognised that the foundation for strengthening these partnerships starts domestically, with a focused and strategic approach to coordination between Defence, the Department of Foreign Affairs and Trade and other key government agencies.
Recommendation 7: Defence Strategy and Force Design
This recommendation is related to the strategy of denial, which was described in the DSR as ‘…a defensive approach designed to stop an adversary from succeeding in its goal to coerce states through force or the threatened use of force, to achieve dominance.’
The DSR concluded that a focus on a strategy of denial requires a robust defence force, complemented by capabilities in cyber, space and electronic warfare. The DSR emphasises the need for a whole-of-government approach to achieve this, with a sharp focus on understanding and developing strategies to counter various levels of threats. This approach serves as both a current and future planning tool, employing a risk-based strategy, to ensure that the priorities of defence are built to counter both current credible threats and those that may reasonably arise in the foreseeable future.
Recommendation 8: Capability and Structure of the Defence Force
This recommendation calls for an urgent shift from a balanced defence force to a focused defence force. The DSR describes the current force as balanced, capable of responding to low-level threats and providing regional support in line with Australia’s national interests. By moving to a focused defence force, low-level threats can still be countered while also enabling the management of more significant military risks.
The DSR highlighted that achieving goal requires evolving the defence force to a genuine Integrated Force that couples together capability in air, land, sea, space and cyber, along-side superior logistics, communications and other systems. A review of the Integrated Investment Program was recommended to identify acquisitions that are no longer a priority given the current strategic risk landscape. The DSR suggested considering the delay or cancellation of lower-priority acquisitions to release both funds and human resources, so that they can be redirected towards higher-priority capabilities.
In terms of design and investment priorities, the DSR suggested that the priorities were:
Recommendation 9: Technology
The DSR discussed the concept of asymmetric advantage and its growing significance in military technology. Essentially, asymmetric advantage involves using capabilities, tactics or strategies to disrupt an adversary by increasing their costs, time, space or material needs. The DSR highlighted the AUKUS partnership as crucial for Australia in acquiring asymmetric capability, through the strengthening of our industrial bases, facilitating faster and more effective information sharing, technology transfer and intellectual property transfer.
In addition, the DSR focused the need to accelerate research and innovation in technology through collaboration with national research organisations and lauded the commitment to establish an Advanced Strategic Capabilities Accelerator to focus on emerging and disruptive technologies, and innovation.
Recommendation 10: Preparedness
This recommendation relates to Australia’s preparedness to deploy integrated defence and deterrence strategies in our immediate region. This includes shoring up resilience levels in civilian infrastructure, to ensure that roads and ports and other logistics networks can be quickly restored to facilitate this deployment in the event it is lost or interrupted (for example, during a severe weather event). Further, this included developing adequate fuel (and aviation fuel) storage and supply, medical facilities and connectivity, to ensure critical planning activities can be undertaken. With further regard to fuel, the DSR recommended that a whole-of-government approach be adopted with respect to analysing and then improving domestic storage and distribution options and international supply and shipping routes.
Preparedness is also described in the DSR as:
Recommendation 11: Workforce
Workforce planning and resource availability are two challenges that feature throughout the DSR. The DSR noted that the transition to the Total Workforce Model had provided flexibility and agility as a recruitment and retention strategy, but that the eligibility criteria for potential applicants should be reviewed to increase the prospect of achieving recruitment targets.
Recommendation 12: Capability Acquisition
The key element of this recommendation was improving the efficiency of the defence asset acquisition process. The DSR noted that both the additional volume and increased complexity of acquisitions was enormous, with additional support needed.
The DSR suggested that improvements could be made with:
Recommendations 13 and 14: The Way Forward
The final two recommendations were about defence spending, and now to implement, oversee and plan the growth and development of Australia’s defence strategy. With respect to funding, it is not surprising that the DSR recommended increases, with a focus on freeing up funds currently directed to projects of a lower strategic value and re-allocating them to projects that align with the recommendations in the review.
From a planning perspective, a National Defence Strategy was recommended, with reviews taking place on a biennial basis. The DSR’s philosophy was that biennial reviews would allow for timely evolution in Australia’s priorities; again, the DSR emphasised that a key priority in executing Australia’s defence strategy was the allocation of workforce resources to priority projects.
Summary & what’s next?
The recommendations in the DSR were welcomed by the Federal Government. It agreed with the recommendations supporting investment in new technologies and the development and transfer of critical technology as part of AUKUS, and with recommendations supporting workforce resources, capability and cyber.
Given the emphasis on technology transfer, Part 3 of this series will examine Australia’s defence export control regime, and recent amendments to the Defence Trade Controls Act 2012, which is a demonstration of both agility and legislative innovation, designed to simplify the transfer of technology and facilitate Australia’s critical relationship with its AUKUS partners, the US and the UK.
