James Riley
July 19, 2016

Industry policy turns to Defence

New Ministry

Industry policy turns to Defence

Malcolm Turnbull: The Prime Minister clearly wants Chris Pyne to spend more time in South Australia

If the innovation flavour of the Turnbull Government was in its early days all about startups and software entrepreneurs, the tone of the Prime Minister’s new ministry points toward advanced manufacturing and global supply chains.

The most significant change, of course, is the shifting of the government’s Leader of the House Christopher Pyne from the Industry portfolio to the new role of Minister for Defence Industry. This was rendered by the Prime Minister as a sideways move, and it is rightly a Cabinet position.

The government has signalled that it will build a policy infrastructure that will leverage the Australian taxpayers’ massive naval investments in the coming decade.

Mr Turnbull says the new role will ensure that the tens of billions being spent on its Naval Shipbuilding Plan delivers more than simply the dozen submarines and clutch of frigates that are on the drawing board.

The investment, of course, is designed to also build industry capability. Specifically, Malcolm Turnbull has charged Mr Pyne with improving Australian advanced manufacturing prowess, and to position the nation within global supply chains.

This is smart politics, of course. The jury is out on whether Chris Pyne was at home in the broader innovation portfolio. But he is definitely at home in South Australia where he is proven as an incredibly effective retail politician.

For a state that boasts more than its share of unloved industries in palliative care, this will be important.

Mr Pyne is in fact the personification of the “election winning machine” (as he so colourfully described the Liberal Party just as it slumped over the line a week ago.) He had good reason to be happy.

Whatever pre-vote concerns there were about holding his Sturt electorate, he pulled nearly 56 per cent of the two-party preferred vote. Compare that to Jamie Briggs losing in Mayo and Matt Williams just squeaking home with the barest of margins in Hindmarsh.

Mr Pyne is said to be good mates with Defence Minister Maryse Payne. Both are of the small ‘l’ Liberal camp. Both have done well under Malcolm Turnbull after a more difficult period when Tony Abbott was Leader.

He is also said to have a very strong working relationship with South Australian Premier Jay Weatherill. This is all good news for South Australia I suppose.

It is a no-brainer that government do everything it can to leverage the huge spend on Defence to build long term capability.

But you have to wonder why, if it is perfectly fine to develop strategies for industry development based on large strategic defence purchases, but somehow the same thinking cannot be applied to the $50 billion being shelled-out for the National Broadband Network.

Where the defence “investment” is all about building jobs and advanced manufacturing capability (presumeably there are also some boats at the end of the process) any similar discussion in relation to the NBN is derided as ‘picking winners’.

This is backwards thinking that has led government to massively under-plan for broadband – it has no well-defined digital economy strategy – to the point where under Malcolm Turnbull it has diminished the social and industry returns from the NBN investment.

Only in Defence are the terms “industry development” and “procurement” allowed to be connected so directly. This is not a terrible thing. But it does come across as odd how different even the language of the Prime Minister is when it is applied to a Defence project spending tens of billions rather than a broadband project spending tens of billions.

I invite you to listen to Mr Turnbull announcing the Pyne appointment yesterday:

“We will be rolling out our historic defence industry investment, building new jobs and opportunities in the advanced manufacturing sector right across the national supply chain, for businesses big and small,” the Prime Minister said.

“This will be transformative for our economy."

“The Minister for Defence Industry will oversee the Naval Shipbuilding Plan which will itself create 3,600 new direct jobs and thousands more across the supply chain across Australia. Beyond shipbuilding, there is a massive Defence Industry Investment and Acquisition Program on land, in the air and inside cyberspace,” he said.

“This is a massive step change set out in the Defence White Paper. This investment in Defence Industry, as you know, is a key part of our economic plan. It will drive the jobs and the growth in advanced manufacturing, in technology, right across the country.”

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