The Future of Defence Made in NSW About Australia

The Australian economy has outperformed the country's peers for more than two decades. Now in its 27th year of consecutive growth, Australia's economic resilience and strength are unsurpassed among major advanced economies. The nation offers a smart, multicultural workforce with an enterprising mindset and the skills to drive innovation and grow international business.

Australia prides itself on stable institutions and good governance, making it one of the safest places in the world to do business. It boasts a globally integrated economy that plays a key role in shaping Asia's dynamic economic future.

There is no better business partner than Australia.

Australia

New South Wales (NSW) Sydney

27 years of 2.9% economic growth, 4th largest economy uninterrupted one of the highest in the Asia–Pacific region economic growth industrial economic growth rates for developed countries globally

13th largest economy Ranked No. 1 smartest AAA credit rating in the world country in the Asia Higher in credit quality Pacific and th4 smartest than the US, UK, France, country in the world Japan, Hong Kong, Republic of Korea and New Zealand

Front cover image courtesy of Department of Defence image library. 2 2 2 About Sydney and New South Wales

Lismore New South Wales (NSW), with New England and North Coast its iconic capital city of Sydney, North West is Australia’s most populous Armidale state and largest economy. Far West Tamworth A cosmopolitan and regional Central West Port Macquarie and Orana powerhouse, the state seamlessly Broken Hill Dubbo Hunter blends business strength, access Newcastle to Asia, and one of the world’s Central Coast Gosford most enviable lifestyles. Boasting Sydney a AAA credit rating, NSW is Greater Sydney Wollongong experiencing Australia’s largest Riverina Murray Illawarra-Shoalhaven Wagga Wagga Canberra infrastructure boom and is home (ACT) to a highly skilled, innovative and South East and Tablelands creative workforce.

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ABOUT NSW: NSW is Australia’s leading source of highly skilled and diverse talent Sydney is No. 1 in the NSW is home to three Asia Pacific and No. 3 of Australia’s top Capital city: Sydney globally for top 100 five highest ranked ranked universities research universities NSW 7.9 million population:

Sydney NSW is Australia’s most innovative state with a strong culture of 5.1 million population entrepreneurship

nd NSW time Sydney is the 2 NSW is the startup GMT +10:00 zone: highest ranked city capital of Australia, in the Asia–Pacific home to more than Sub-tropical and region for innovation 40% of all startups Climate: Mediterranean Sydney summer temperature 18–27 °C NSW is Australia’s most secure and liveable place to do business average: Sydney is the NSW is set to deliver on Sydney winter highest-ranked the biggest infrastructure temperature 7–18 °C capital city in program in Australian average: Australia for quality history, with a A$87.2 billion of life pipeline of infrastructure Coastline: 2,007 kms

Official NSW is Australia’s largest market English language: Home to 7.9 million The state is Australia’s Australian dollars people, more than largest economy: Currency: (AUD) Singapore and A$500 billion, larger Hong Kong than Malaysia, Singapore and Hong Kong International Sydney Airport airport:

3 Introduction

New South Wales (NSW) has the strongest defence1 presence and the most sophisticated defence- related industrial base and research institutions of any state in Australia.

NSW has been the leading As a result, all the major enabler of national defence since defence primes either have their before federation in 1901, and headquarters in NSW or have a has the greatest concentration substantial presence in the state. of defence assets in the country. Today, NSW is also home to NSW’s position is enhanced the majority of Australia’s by being Australia’s economic, leading tertiary research and financial and educational development institutions powerhouse, contributing one- with significant experience in third of the country’s gross delivering on defence capability domestic product and enjoying priorities and attracting an AAA credit rating and record international investment. business investment.

The defence industry in NSW has core strengths and expertise in the most critical capabilities. These include advanced and subsystem manufacturing, sustainment of major systems, complex project management, complex systems integration, cyber security, and composite materials research, design and production.

1 Department of Defence, the Australian Defence Force and related entities. 4 4 4 5 5 Defence sector overview

NSW attracts NSW is home to more than one-quarter of Australia’s military and defence civilian personnel, the highest with 25,000 people including permanent annual defence members, reservists and civilians. investment The state hosts more than 80 Supporting the greatest across facilities, including 21 major concentration of defence assets, acquisition, defence bases and training NSW is home to the largest sites—more than any other defence industrial workforce sustainment and Australian state or territory. (6,500 direct and more than operations The operational headquarters for 29,000 indirect workers). the Royal Australian Navy, the NSW also attracts the highest Australian Army and the Royal annual defence investment Australian Air Force, as well as across Australia in acquisition, the Joint Operations Command, sustainment and operations are located in NSW. All three (valued at approximately services have their strategic A$9 billion per annum). headquarters in the Australian Capital Territory—the ACT.

Additionally, NSW hosts major sustainment hubs for the Royal Australian Navy at Garden Island Defence Precinct, the Australian Army at Holsworthy Barracks, and the Royal Australian Air Force at RAAF Base Williamtown.

6 6 6 Major defence bases in NSW

RAAF Base Glenbrook

RAAF Base Richmond

Lone Pine Barracks (Hunter)

RAAF Base Williamtown (Hunter)

Sydney Harbour - HMAS Kuttabul - HMAS Penguin - HMAS Waterhen - HMAS Watson

Victoria Barracks

Randwick Barracks

Liverpool Military Area

HMAS Albatross (Illawarra-Shoalhaven)

HMAS Creswell (Illawarra-Shoalhaven)

RAAF Base Wagga (Riverina-Murray)

Blamey Barracks (Riverina-Murray)

Navy

Army

Air Force

7 Sector capabilities and enablers

NSW’s strong industrial base NSW offers these capabilities, These manufacturers are vital underpins our defence capability positioning it well to meet current to the diversity and strength of and future workforce skills needs.2 the Australian economy. Overall, The defence sector is For example, the industrial manufacturers in NSW produce underpinned by a deep and base for the defence sector in almost 30% of the country’s total complex industrial base with NSW includes highly innovative, output in the sector, generating capabilities in materials research, competitive and world-leading around A$30.18 billion annually industrial design, information and manufacturers that are using and accounting for one-third of communication technology, and state-of-the-art technology and manufacturing jobs.3 4 complex systems integration. highly skilled staff.

Sector supply chain

NSW has strong capability across the defence sector value chain. The state's largest capacity is in support services including ground operations; training; emergency response; maintenance, repair and operations (MRO); project and data management; and engineering (including test and calibration).

Relative strengths of industry capability

Research & Product development, Sales, services/maintenance, development, production/manufacturing logistics commercialisation, design

Engineering & research Munitions, ordnance, explosives Sales and service Materials, composites, alloys Electronic systems, sensors, hardware Training and safety Construction & manufacturing Propulsion systems Transport and logistics Vehicles, hardware equipment Command, control and communications Support services Unmanned systems IT, cyber security

2 Department of Industry NSW, 2017, New South Wales: Strong, smart and connected – The NSW Government Defence and Industry Strategy 2017, industry.nsw.gov.au/__data/assets/pdf_file/0011/98624/NSW-Strong-smart-and-connected-defence-strategy.pdf, accessed 8 June 2018.

3 Australian Bureau of Statistics, 2017, Australian National Accounts: State Accounts, 2016–17, cat no. 5220.0.

4 Australian Bureau of Statistics, 2018, Australian Industry 2015–16, cat no. 8155.0.

8 8 8 Image courtesy of Department of Defence image library.

9999 Critical industry capabilities

Industry capability is spread throughout NSW but is generally close to defence presence and infrastructure in Sydney, including Western Sydney, and several specific regions.

Areas of Industry Capability in NSW

Hunter- Western Rest Capability Sydney Newcastle Illawarra Sydney of NSW

Support services ••• •• • • •

Engineering & research ••• •• •• • •

Construction & manufacturing ••• • • •• •

Training & safety •• • •• •

Transport & logistics •• •• • • •

Sales & service •• • • • •

Electronic systems, •• •• • • • sensors, hardware Command, control & •• • • • • communications

IT, cyber security •• • •

Materials, composites, alloys • • • • •

Unmanned systems • • • •

Vehicles, hardware • • • • • equipment/platforms

Munitions, ordnance, explosives • •

Propulsion • • •

Security, access control • •

Key: ••• Significant capability •• Developed capability • Some capability

10 10 10 Greater Sydney region One vital industry is the sustainment of naval vessels. The Greater Sydney region— Directly and indirectly, the naval incorporating Sydney Harbour, presence in Sydney contributes Western Sydney and the Blue around A$1.83 billion annually to Mountains—hosts a significant the economy and supports more number of Australian Defence than 12,000 jobs. Force (ADF) bases, facilities and personnel. This defence The NSW Government is presence is complemented developing an aerospace and by the concentration of prime defence industry precinct at contractors and specialist small the future Western Sydney and medium-sized enterprises Airport. Northrop Grumman, a (SMEs) working in both defence leading global aerospace and and the wider industry. defence technology company, has committed to being an Sydney hosts a number of industry anchor tenant. The precinct will clusters that are vital to the position NSW to continue its role defence sector. These include as Australia’s leading state for acoustic technologies and systems; delivering complex defence systems. complex systems integration; cyber security; advanced materials The Western Sydney Aerotropolis and optics; helicopter and jet defence and aerospace precinct engine maintenance; simulation; offers the opportunity to intelligence, surveillance and create leading capabilities in reconnaissance; electronic industrial technology, including warfare; space technologies; and complex systems design and small arms manufacturing.5 integration, logistical support and cyber security.

5 Department of Industry NSW, 2017, New South Wales: Strong, smart and connected – The NSW Government Defence and Industry Strategy 2017, industry.nsw.gov.au/__data/assets/pdf_file/0011/98624/NSW-Strong-smart-and-connected-defence- strategy.pdf, accessed 8 June 2018.

11111111 Critical industry capabilities

Regional NSW The Murray–Riverina Region, NSW Defence and Industry including Wagga Wagga, Albury Strategy The Hunter Region, including and Mulwala, plays host to Newcastle, Williamtown and defence’s presence at RAAF The state government launched Singleton, hosts key Air Force Base Wagga, and the Blamey the NSW Defence and Industry and Army establishments, such and Latchford barracks. The Strategy, NSW: Strong, smart as RAAF Base Williamtown, region is also home to military and connected, to support Australia’s premier jet fighter training and specialised contract defence industry development, base. Key defence industry engineering, as well as propellant and increase investment and capabilities include sustainment of and explosives manufacturing. innovation in NSW. The whole major aircraft platforms, advanced of NSW government strategy electronics and infantry training, The North Coast Region, prioritises the defence sector as a and maritime sustainment. including the towns of Yamba, key driver of growth, especially in Port Macquarie and Taree, has regional NSW, and aims to further The South Coast Region includes numerous defence industry cement NSW as the heart of the Shoalhaven and Illawarra. The capabilities, including small- Australia’s defence sector. Shoalhaven is home to the Navy’s vessel design and manufacturing; Fleet Air Arm, and is renowned as maritime sustainment and The strategy is built around five Australia’s centre for naval aviation. disposals; and the design, key themes: building stronger Key defence industry capabilities manufacturing and support of relationships; leveraging critical include design, manufacturing specialist defence products. strengths; growing the future and in-service support for workforce; sustaining regional mechanical and electrical systems, The Capital Region, including industry; and driving research test regimes, and simulation and Queanbeyan and Goulburn, and innovation. training services. adjoins the ACT. The ACT is home to the Australian Government The NSW Department of The Illawarra has a sophisticated departments that formulate Industry formed a dedicated innovation ecosystem that is at policies on defence and security, team, Defence NSW, to execute the cutting edge of research and and make decisions on national the strategy by creating the industry collaboration. defence acquisitions and conditions for sustainable, sustainment. The ACT–NSW technologically advanced and Leading research and Memorandum of Understanding globally competitive defence development institutions include for Regional Collaboration industries across the state. the Defence Materials Technology signed in 2016 underpins the Defence NSW provides whole Centre and the Centre for strengthening relationship of NSW government leadership, Computer and Information between the two jurisdictions. advocacy and engagement with Security Research. the defence sector.

12 12 12 Defence research organisations The NSW Defence focus on enhancing capabilities Innovation Network

NSW has well developed R&D The NSW Defence Innovation capability across the defence Network (DIN) was launched sector including significant in 2017 to strengthen research capability across the nine defence and development in defence priority technologies. There priority areas such as quantum has been significant investment technologies, trusted autonomous in centres of excellence, systems and cyber security. infrastructure and training in NSW. This state-sponsored partnership between the Defence Science NSW universities receive 30% and Technology Group (A$3.2 billion) of national (DSTG) and seven world- university R&D expenditure, class universities is enhancing and 18% (A$16 million) of collaboration with industry to national university defence R&D enable faster development and expenditure. commercialisation of technologies.

The presence of NSW capability The network’s founding across the entire value chain universities are: coupled with strong R&D capability makes NSW an ideal • Macquarie University (MQ) 'test bed' for innovation. Primes • University of New South have the opportunity to partner Wales (UNSW) with NSW universities on R&D • University of Newcastle (UoN) projects and then work with NSW companies to test, commercialise • University of Sydney (USYD) and build a supply chain prior to • University of Technology global roll out. Sydney (UTS) • University of Wollongong (UoW) • Western Sydney University (WSU).

13 13131313 Summary of relative R&D strengths across the Defence Innovation Network

Defence Priority

Technologies Uni. Macquarie (MQ) Uni. Of NSW (UNSW) Uni. Of Newcastle (UoN) Uni. Of Sydney (USYD) Uni. Of Tech. Sydney (UTS) Uni. Of Wollongong (UoW) Western Sydney Uni. (WSU)

Advanced sensors •• ••• •• ••• •• •• •• and intelligence

Autonomous systems • ••• •• ••• ••• •• ••

Communications, electronics •• ••• • ••• •• • • and digital technology

Cyber and IT security •• ••• •• ••• ••• •• •

Enhanced human performance and •• ••• • ••• ••• •• •• protection

Hypersonics ••• ••

Material sciences and • ••• • ••• •• ••• •• manufacturing

Quantum technologies •• ••• ••• •• •

Space technologies •• ••• • ••• ••

Capability: • Some •• Developed ••• Highly developed

Table excludes Australian Catholic University, Southern Cross University and University of New England as defence relevant capability was assessed as limited. Assessed with reference to ERA Report 2015, ARC Grants Database, State of Research in Australian Universities Report (Barlow, 2015), League of Scholars Research Database, NSW Defence Innovation Network capability database, NSW Cyber Security Network capability map, NSW Smart Sensing Network capability database, independent research.

14 NSW also boasts numerous Commonwealth policy leading defence industry–related and strategies research institutions, including: The Australian Government’s • The Centre for Quantum 2016 Defence White Paper Computation and outlines programs and Communication Technology acquisitions worth more at UNSW, which is making than A$200 billion over the one of the largest combined next decade. The Australian and focused efforts in Government has since developed quantum computation and federal policy and plans that align communication in the world6 with the national approach to • The Centre for Autonomous defence challenges adopted in Systems at UTS, an the NSW Defence and Industry internationally acclaimed Strategy, NSW: Strong, smart robots research group7 and connected. These include an integrated investment program, • The SMART Infrastructure defence industrial capability plan, Facility at UoW, an naval shipbuilding plan and a international leader in applied defence export strategy.10 infrastructure research8 • The Steel Research Hub at UoW, which is providing innovative solutions and breakthrough technologies in the steel industry.9

6 Centre for Quantum Computation and Communication Technology, 2018, cqc2t.org/research

7 University of Technology Sydney Centre for Autonomous Systems, 2018, uts.edu.au/research-and-teaching/our-research/centre-autonomous- systems

8 University of Wollongong Australia, 2018, smart.uow.edu.au

9 Steel Research Hub, 2018, steelresearchhub.uow.edu.au

10 Department of Industry NSW, 2017, New South Wales: Strong, smart and connected – The NSW Government Defence and Industry Strategy 2017, industry.nsw.gov.au/__data/assets/pdf_file/0011/98624/NSW-Strong-smart-and-connected-defence-strategy.pdf, accessed 8 June 2018.

15 15151515 Case study: Case study: Thales and Raytheon Australian Munitions

The world-leading underwater systems Thales also owns Australian Munitions, facility at Rydalmere in Western Sydney is an the only manufacturer of explosives, example of the outstanding complex systems propellants and concentrated acid development and sustainment capabilities products for defence applications in available in NSW. The recent selection of Australia. The Mulwala Propellant Facility in regional NSW manufactures high- Thales Australia, in partnership with combat quality propellants and explosives that system integrator Raytheon Australia, to perform at consistent velocities over deliver new sonar systems to the Navy’s an extended temperature range—a fine current fleet of submarines is a testament to example of sovereign defence industry this capability. It also highlights the depth of capability. Australian Munitions is the the extensive defence industry ecosystem largest supplier of explosive ordnance to of smaller supporting companies, such as the ADF and has world-class propellant Sonartech Atlas in Macquarie Park, and the research and development capabilities.11 potential for continued development of sovereign sonar capability for our new Hunter Class frigates and Attack Class submarines.

11 Department of Industry NSW, 2017, New South Wales: Strong, smart and connected – The NSW Government Defence and Industry Strategy 2017, industry.nsw.gov.au/__data/assets/pdf_file/0011/98624/NSW-Strong-smart-and-connected- defence-strategy.pdf, accessed 8 June 2018.

16 16 16 Image courtesy of Department of Defence image library.

17 171717 18 18 18 Case study: BAE Systems Australia

The Joint Strike Fighter program part of a global network and to will meet the country’s air combat create a regional sustainment needs beyond 2040. Under the hub for the Asia Pacific.13 program, Australia will acquire 72 Lockheed Martin F-35 Lightning Former Prime Minister Malcolm aircraft. It will also deliver facilities, Turnbull described the program weapons and new support as ‘an example of how our systems to meet fifth-generation Defence Industry Plan is not requirements. simply securing our Air Force and our Army and our Navy BAE Systems Australia in with the capabilities they Williamtown will deliver the need to keep us safe in the 21st sustainment facilities and servicing century, but it is driving the to maintain, repair, overhaul and advanced manufacturing, upgrade the aircraft.12 the jobs, the advanced technology that Australians The workforce is being need to make sure our children transitioned to have the high- and grandchildren have the technology skills needed to great opportunities in the operate and sustain the fleet as years ahead’.

12 Australian Financial Review, 2017, “Australia wins huge maintenance program to support F-35 aircraft”, afr.com/news/special-reports/defence-and-national-security/huge- maintenance-program-to-be-put-in-place-to-support-f35-20170303-guq4u3

13 Department of Defence, 2018, Joint Strike Fighter Division, defence.gov.au/casg/aboutcasg/ourstructure/air/jointstrikefighterdivision

19 19 Case study: Bisalloy Steels

Unanderra-based specialist steel finishing company Bisalloy Steels has won a contract to work on the add-on armour range for armoured fighting vehicles being built by Rafael Advanced Defense Systems.

The deal is evidence of NSW’s sovereign defence industry capabilities in military-grade armour steel production. It also shows that SMEs in regional Australia can successfully compete for and win global supply chain contracts with big defence companies.

Welcoming the contract, former Minister for Defence Industry Christopher Pyne said: ‘This contract demonstrates Australian defence industry’s world-class capabilities, creating and securing jobs and opportunity in regional areas as well as urban ones.’

20 20 20 21 How we can help

The NSW Government’s Industry, We can provide: Trade and Investment Team can • market intelligence and investment help you establish, innovate and opportunities grow your business in Sydney and NSW. Our dedicated team works • support for business case development with experts across all levels of • identification of suitable investment locations government (local, state and and partners in NSW federal) and business networks to • facilitation of familiarisation visits to NSW provide customised information for businesses. This service is free • advice on NSW government programs and and confidential. approval processes • connections with government contacts including the Defence NSW Team and the local business network.

Contact us

The NSW Government is here to help you. If you need assistance, or have any questions, please contact NSW Government’s Industry, Trade and Investment team.

NSW Department of Industry, Trade & Investment Team:

T: +61 2 8222 4888 W: invest.nsw.gov.au

22 22 Image courtesy of Department of Defence image library.

23 The Future Made Here

T: +61 2 8222 4888 W: invest.nsw.gov.au

© State of New South Wales through Department of Industry 2019.

The information contained in this publication is based on knowledge and understanding at the time of writing (February 2019). However, because of advances in knowledge, users are reminded of the need to ensure that the information upon which they rely is up to date and to check the currency of the information with the appropriate officer of the Department of Industry or the user’s independent adviser.

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