‘A classic mess’ ASPI says, as govt scraps Defence drones to pay for cyber

Denham Sadler
National Affairs Editor

The scrapping of a $1.3 billion Defence drones program by the federal government to help pay for a cyber budget boost has been branded a “mess” and a massive blow for the local industry.

It was revealed late last week at a Senate Estimates hearing that the $1.3 billion SkyGuardian program, which would have seen Australia buy 12 armed drones to be used for surveillance, had been quietly shelved, with the leftover money going towards the $9.9 billion, 10-year investment into the Australian Signals Directorate’s cyber capabilities.

This program, dubbed REDSPICE, was announced in last week’s budget, with $588.7 million in new money over the next four years.

Image: U.S. Marine Corps

The drones were described by then-Defence Minister Linda Reynolds as “cutting-edge armed remotely-piloted aircraft systems” when the plan was announced in 2017, and one which would ensure the Defence force “maintains state-of-the-art capability”.

It would have seen Australia acquire these drones for the first time, which would have been more advanced than those used in recent years in Afghanistan. About $10 million had already been spent on the program before its funding was redirected.

The drones plan was an important one and the decision to scrap it is a mistake, according to Australian Strategic Policy Institute senior analyst Dr Malcolm Davis.

“It’s a shame that the government has chosen to do this in order to pay for REDSPICE. This has basically taken away a significant capability that I think would have been really useful with nothing in its place. Substantial amounts of money were invested into that project and we’ve got nothing back,” Dr Davis told InnovationAus.com.

“Essentially it’s a classic Defence department government mess. We’ve invested all this time and all this money and we’ve cancelled it without any deep thought about any alternatives. It’s a loss and it’s not well thought through in terms of government policy.

“It’s a short-term perspective, but the government is doing REDSPICE and I suspect they’re doing it on the fly.”

There were also significant local industry opportunities with the SkyGuardian project, Dr Davis said.

“It would have been a new capability and it would have generated sustained work for people to support them and evolve them with new capabilities. That would have all entailed additional work,” he said.

General Atomics had formed a consortium with ten Australian companies to deliver elements of the SkyGuardian project, helping to provide a range of sensors, communication and manufacturing for it.

The company’s president David Alexander said the government’s ditching of the program is “disappointing for a number of reasons”.

The new drones would have offered a “cost-effective, multi-domain capability that is deeply relevant to Australia’s future strategic environment”.

“Equally disappointing, our many Team SkyGuardian Australia partner companies have invested in the start-up and future support for this capability in Australia and will lose considerable sovereign capability opportunities following this decision,” Mr Alexander said.

The Opposition has also slammed the decision, saying that it will “reverberate around the Australian defence industry” and that it “demonstrates this government doesn’t care about Australian manufacturing”.

REDSPICE will see the ASD double in size, and triple its offensive cyber capability.

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