Security and Defence in WA: An Economic Perspective (VERSION 7.8 – FINAL DRAFT) OCTOBER 2017 Security and 2017 NOVEMBER Defence in Western Australia: An Economic Perspective Acknowledgements: Regional Development Australia and Risk Intelligence Solutions would like to thank all those stakeholders including the Australian Government, the Western Australian Government, Economic Development Australia and all the Local Governments in the Perth and Peel region as well as the regional development organisations and individuals who have contributed to this important study along with the members of the international Expert Panel Kenny McDonald and Niel McInroy. In addition, Regional Development Australia and Risk Intelligence Solutions wishes to acknowledge the kind and considerate advice and support rendered by the following individuals, who in various capacities assisted in shaping the outcome of this study. They include Professor Peter Leahy AC, Dr Stephanie Koorey, Stephen Bunce, Simon Louie, Jose Sousa Santos, Greg Salotti, Commodore Brett Dowsing, Pat Hall, Brett Biddington, Derek Parkes, James McMahon, Peter Horobin, Jonathan Smith, Peter Lockwood, Professor Stephen Smith, David Johnston, Peter Kershaw, Denton Bocking, David Trench, Stephen Cain, Dr Andrew Davies, Mark Potter, Peter Iancov, Davyd Thomas, Mike Deeks, Dale Whelan, Stuart Purves, Jeff Murray, David Thompson and Michael Page. Whilst all care and diligence have been exercised in the preparation of this report, Risk Intelligence Solutions does not warrant the accuracy of the information contained within and accepts no liability for any loss or damage that may be suffered as a result of reliance on this information, whether or not there has been any error, omission or negligence on the part of Risk Intelligence Solutions or their employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and as such no warranty is given that a particular set of results will be in fact be achieved. All images used are for illustration purposes only. About the Author: Risk Intelligence Solutions specialises in defence sector analysis, risk assessments and business intelligence. RIS provides unique tailored advisory solutions for corporate and government clientele, and small and medium enterprises. Serge DeSilva-Ranasinghe is the Director of RIS, and a senior security analyst and consultant with considerable experience in the field. He is the former President of the Australian Industry and Defence Network of WA (AIDN-WA). He also holds a number of honorary affiliations, being an Associate Fellow of the Australian Institute of Management WA, an Associate of Security Professionals Australasia, a Senior Associate of the AIDN-WA, an Associate of the Australian Risk Policy Institute. In addition, he has honorary fellowships with the National Security Institute, University of Canberra; the Institute For Regional Security, and the Centre for Independent Studies. He has published over 500 articles and interviews in a range of high-profile international publications, and has previously been commissioned to conduct field research and produce in-depth assessments by reputed institutions such as the Department of Defence, IHS Jane’s Information Group and the Government of Western Australia. ISBN 978-0-646-98020-1 This report was produced by RDA Perth and does not necessarily represent the views of the Australian Government, its officers, employees or agents. REGIONAL DEVELOPMENT AUSTRALIA Office 2 The RISE, 28 Eighth Avenue MAYLANDS WA 6051 PO Box 325 MAYLANDS WA 6931 ph +61 8 9371 5525 email [email protected] website www.rdaperth.org PERTH Report Produced by RISK INTELLIGENCE SOLUTIONS | PO BOX 6710 EAST PERTH WA 6892 website www.riskintelsolutions.com.au email [email protected] IV | This page has been left intentionally blank. Table of Contents Executive Summary ..........................................................................................................2 Recommendations ............................................................................................................3 Introduction ......................................................................................................................7 Section 1: The Strategic Importance of Western Australia ..............................................9 Section 2: A Profile of Defence in the West ...................................................................21 2.1 Joint Elements and Agencies .....................................................................................23 2.2 Royal Australian Navy ................................................................................................27 2.3 Australian Army .........................................................................................................30 2.4 Royal Australian Air Force ..........................................................................................33 2.5 Defence Training Areas ..............................................................................................36 Section 3: Capabilities of fenceDe Industry ...................................................................41 3.1 Defence Industry Peak Bodies ...................................................................................43 3.2 Naval and Maritime ..................................................................................................44 3.3 Defence Aviation and Sustainment ...........................................................................52 3.4 Army and Land ..........................................................................................................54 3.5 C4ISR .........................................................................................................................55 3.6 Defence Logistics ......................................................................................................58 3.7 Defence Estate and Infrastructure ............................................................................58 3.8 University and Tertiary Institutions ...........................................................................60 3.9 Miscellaneous Technologies .....................................................................................62 Section 4: Defence Industry Innovation and Exports .....................................................65 4.1 Synergistic Innovation ...............................................................................................66 4.2 Defence Exports ........................................................................................................77 Section 5: Additionalotential P for Defence and Defence Industry ...............................83 5.1 Defence and Indigenous Employment ......................................................................84 5.2 The Case for an Indian Ocean Patrol Boat Program ..................................................88 5.3 A Case for Expanding Army in the West ....................................................................92 Conclusion ....................................................................................................................105 Appendix A: R&D Expertise of AW Universities ............................................................107 Appendix B: Defence C4ISR Investment Programs .......................................................107 Executive Summary This report has been compiled to cast a light on the defence sector in Western Australia (WA). There is little analysis in the public domain about the sector, as a whole, across the State. The capabilities of the defence industry in WA, including that of local companies, are not necessarily well known. Just as importantly, there is little understanding of the broader potential for the defence sector in WA: geo-strategically, politically, economically and militarily. This report is particularly focused on the economic prospects of enhancing the defence presence and the defence industry within the State. WA is the largest State, comprising almost one-third of Australia’s entire territory. It also faces growth regions and significant waterways of the world – the Indian Ocean Region encompassing West, South and Southeast Asia, the Middle East, and East Africa. In addition to its substantial defence assets, WA hosts significant offshore infrastructure in the oil and gas industry. The State’s north and north-western approaches, while strategically important, have become increasingly sensitive to security threats – particularly from unauthorised arrivals. Many Indian Ocean states are increasing their defence expenditure, and have their own maritime security concerns. This creates excellent opportunities for Australian firms, with a burgeoning export market on our doorstep. There is the potential to achieve significant advantages from improved and expanded defence facilities in the State, including for Australia’s allies – and not least allowing for naval facilities in the region for the United States (US), which is not only Australia’s most stalwart ally, but also operates the largest navy in the world. Defence department spending, resourcing and basing helps keep local economies buoyant. While there are already extensive Defence facilities across WA, although concentrated in the South West, there are, without doubt, significant opportunities for both synergies and new initiatives. This report’s extensive analysis leads to conclusions that include the harnessing and nurturing