Land Forces 2022 - SMEs suffer as defence contracts delayed, by Michael Slattery

Today @AuManufacturing’s special editorial series Land Forces 2022 turns to the predicament of the SME manufacturers supplying defence. Here, Michael Slattery looks at project delays and how they affect SMEs investing in new capabilities.

On the first morning of LandForces 2022 the new federal government announced that it was deferring the Land 400 Ph3 programme.

This was not unexpected but it did remind defence industry once again of the time, money and risk assigned to working in the defence sector.

Many companies within the sector are considering their future, their human capital resources and where to invest – many have already invested millions, particularly since 2016 and the proposed revival of continuous naval shipbuilding.

SME’s operating in the sector (or hoping to) have spent many hours and many dollars to be defence ready.

These expenses include upgrades to cyber security and DISP, upgrades to quality accreditation, training and development of staff, capex of equipment with no ROI, many hours of networking and travel to all parts of the globe and many hours to fulfill red tape requirements.

This time and money is already invested and the big question each and every business owner must be is asking themselves is how long do I continue and where is my money best spent considering other sectors look more appealing?

The Albanese government promised an ‘Australian Made’ approach to defence spending, it has bought time through a force posture assessment and AUKUS until March 2023, after that he may not have the support of industry which may have moved on to greener pastures.

The waiting has to end, defence industry SME’s have waited long enough, they are ready, committed and need contracts now.

The message from SME industry to Defence – hurry up and start!

Michael Slattery is an experienced manufacturing business owner and manager, and a leader in the expanding defence industry sector. Michael is business development manager at Rowlands Metalworks, a board member of the Institution of Engineering and Technology (SA/NT) and president and committee member of the Australian Industry & Defence Network – South Australia (AIDN SA).

@AuManufacturing’s special editorial series Land Forces 2022 is brought to you with the support of Thales Australia and BAE Systems Australia.