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Defence White Paper

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Defence White Paper Contents Introduction ....................................................................................... 3 KPMG Insight: The state and territory view ...................................... 3 Queensland ....................................................................................... 4 Northern Territory .............................................................................. 5 New South Wales.............................................................................. 6 Victoria ............................................................................................... 7 Western Australia .............................................................................. 7 South Australia .................................................................................. 8 Tasmania ........................................................................................... 8 Contact us ......................................................................................... 9 . Introduction KPMG Insight:The State and The 2016 Federal Budget has confirmed the Territory view promises made in the February 2016 Defence White Paper. Some $33.9 billion of spending in FY16/17, and a 3.4 percent increase compared to FY15/16. The positive signs are not uniform across the With the promise of $195 billion for new capability 1 country. For example, the $90 billion for naval through to FY25/26, the signals to the Defence shipbuilding programs will benefit South industry are positive. Australia and Western Australia the most, with further benefits rippling through national and Five highlights global supply chains. The Integrated Investment Plan (IIP) will invest The infrastructure investments (more easily 1 $1.7 billion in the Major Capital Facilities 2 discovered in the budget documents program in 2016-17, and signals a much compared to other Defence investments) will greater need to collaborate regionally with logically follow the distribution of ADF customers, suppliers and competitors. This personnel. Queensland and New South Wales new style of investment is beginning to flow, in particular, appear to have benefited in this and those that can work nationally, across regard. states and territories, and adopt a more collaborative mindset will benefit. States and territories are investing in the $195 billion assigned to new Defence 3 capture of new Defence work. From 2 capability through to FY25/26, which will flow advocates to advisory committees and into the order books of prime systems dedicated public servant teams, the various integrators, small-to-medium-sized companies, states and territories are effectively competing plus infrastructure, information and for dollars now. They are aiming to attract the communications technology (ICT) and services programs and Defence industry to grow providers. While South Australia and Western employment, innovation and adjacent sector Australia might get the largest direct share, opportunities. the funds will eventually flow to all states and territories. $1.6 billion through to FY25/26 for a series of 3 Defence Industry Programs including a new Centre for Defence Industry Capability based in Adelaide, a virtual Innovation Hub and Next Generation Technology Fund enabling Defence Industry growth and innovation across the nation. In the national security sector there has been 4 a re-allocation of $195 million to implement recommendations of the 2015 Cyber Security Review. Although not new money, this is an aggregation of budgets that should benefit larger cyber service providers. The scale and complexity of regional 5 infrastructure programs creates opportunities to work more closely with other ICT and infrastructure providers, plus the prime system integrators, to ensure the infrastructure is developed and delivered in unison with broader Australian Defence Force (ADF) capability. KPMG | 3 © 2016 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Queensland Defence Infrastructure / Capital Facilities Projects “Queensland, with its large ADF presence, naturally $1.7 billion has been allocated to the Major Capital features in Defence infrastructure and new Facilities program in 2016-17. Major Capital Facilities capability spending plans. Townsville and RAAF projects in Queensland include the following: Amberley continue to attract substantial investment • AIR 7000 Maritime Patrol Aircraft Phase 2B with the P-8A acquisition only continuing the trend.” The Australian Government is investing $707.9 Jonathon Peacock, Partner million to provide new and upgraded facilities and infrastructure to support the introduction of the • Lavarack Barracks In November 2013, the P-8A aircraft including at RAAF Base Townsville. Australian Government committed $752.7 million Construction is planned to commence in mid- to logistics infrastructure to modernise and 2016 and be completed by mid-2020. enhance wholesale storage, distribution and land materiel functions of the Joint Logistics • AIR 9000 Phase 5C (CH-47F Chinook) Command units to provide optimum support to Replacement Chinook Facilities Project The Defence operations. Those works are completed, government is investing $54.8 million in facilities with the exception of Lavarack Barracks, which at RAAF Base Townsville. This will provide new are scheduled for completion by mid-2016. The and upgraded facilities to support the opportunity for industry will shift to maintenance introduction and sustainment of the new CH-47F and upgrade in 2017. Model Chinook Medium Lift Helicopters. Construction commenced in November 2014 and • RAAF Amberley and Townsville The Explosive is scheduled for completion by mid-2017. Ordinance Logistics Reform Program will upgrade storage facilities across Australia for all • 17th Construction Squadron Relocation explosive ordnance. This $210 million reform Infrastructure Project The government is program will upgrade existing storage investing $71.8 million to provide facilities to co- infrastructure and increase storage capacity locate the 17th Construction Squadron with the across the explosive supply chain network. It is a 6th Engineer Support Regiment and the 21st major opportunity for Defence infrastructure Construction Squadron at RAAF Base Amberley. design, delivery and service providers. This Construction commenced in late 2015 and is program will optimise the national explosive scheduled for completion by late 2016. storage network and deliver required capacity • AIR 8000 Battlefield Airlifter Facilities Project and operational efficiencies. Twelve sites Phase 2 The government is investing $370.4 nationally will have improvements delivered million to provide facilities at RAAF Base under the program, including RAAF Amberley Amberley to accommodate and support the and Townsville. The program will commence a operation of the new C-27J Battlefield Airlifter detailed design process in early 2016 with aircraft. Construction is scheduled to commence construction in 2018. in mid-2016 and is scheduled for completion by • Engaging People with Disability in early 2019. Townsville, Enoggera and RAAF Amberley • AIR 5349 Phase 3 Growler Airborne Electronic The Defence Administration Assistance Program Attack Capability Facilities Project The employs people with disability, through government is investing $348.6 million to provide partnerships with community-based Australian working accommodation, maintenance, Disability Enterprises, to provide Defence warehousing and training facilities. This includes personnel with administrative assistance. Over at RAAF Base Amberley and Army Aviation the next 12 months, Defence will implement the Centre Oakey to support the introduction of the Defence Administrative Assistance Program at Growler Airborne Electronic Attack Capability. seven sites nationally, including Townsville and Construction is scheduled to commence in mid- RAAF Base Amberley. The program has been 2016 and be completed in 2021. operating in Enoggera, Queensland since 2014. • Townsville Defence Housing Australia currently has four development projects in regional areas, valued at approximately $415 million overall, which includes investment in Townsville. Defence Housing Australia’s diverse operations provide significant opportunities for small and medium businesses in regional Australia by engaging with local trade contractors on residential maintenance services. KPMG | 4 © 2016 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Liability limited by a scheme approved under Professional Standards Legislation. Northern Territory • Air Traffic Control Complex Infrastructure “The Defence infrastructure spend keeps flowing in Project and AIR5431 Phases 2 and 3 Fixed the Northern Territory, including Delamere. The Base Defence Air Traffic Management and challenge now is for the NT to secure its share of Control System The government is investing national Defence maintenance and sustainment $409.9 million to provide facilities in support of spending.” replacement Air Traffic
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