Policy framework

The 2016 Defence White Paper sets out a comprehensive, responsible long-term plan for Australia’s defence. Australian industry will play a major role in delivering the plans in the Defence White Paper.

The Defence White Paper is complemented by:

  • the Integrated Investment Program, which outlines the $195 billion of Defence capability investment and provides industry with the certainty to invest in people and infrastructure
  • the Defence Industry Policy Statement, which provides the foundation to take the partnerships between Defence and industry to new levels of cooperation, with a focus on stronger, more strategic partnerships and closer alignment between industry investment and Defence capability needs.

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Defence Industry Policy Division

The Defence Industry Policy Division informs and improves how Defence approaches industry engagement and innovation. The division has responsibility for effective implementation of the Government's approach to Defence industry policy, creation of a strategy-led program of industry engagement and innovation, and the CDIC.

The figure below summarises the defence industry policy agenda.

The image shows the Strategic Direction covers the 2016 Defence White Paper, the 2017 Foreign Policy White Paper, Defence Capability and Industry Policy. Defence Capability covers the 2016 Integrated Investment Program and the 2016 Defence Industry Policy Statement.Industry Policy covers the Australian Industry Capability Program, Naval Shipbuilding Plan, Defence Industrial Capability Plan (forthcoming)and the Defence Skilling and STEM Strategy (forthcoming).


Recognising industry as a Fundamental Input to Capability

Recognising industry as a Fundamental Input to Capability reflects the importance of industry in Defence capability planning and provides industry with an earlier and stronger voice across the Defence Capability Life Cycle. Defence capability managers are now required to consider the resilience and capacity of industry as capability plans are developed. The CDIC will help bridge the gap between Defence and industry by:

  • identifying strategic industry capability gaps and funding defence industry skilling, growth and development projects
  • guiding defence industry capability and the development of a sustainable defence sector
  • providing advice and analysis to Defence of the capabilities within Australia’s industrial base
  • supporting engagement between Defence and industry in the formal capability development process, by matching Australian industry capabilities with Defence requirements
  • building Australian industry’s capability and competitiveness to ensure Defence’s needs are met, by providing support to individual businesses and the sector as a whole.

Defence Capability Life Cycle and Smart Buyer

Defence has reformed its Capability Life Cycle (CLC) to ensure that Australian industry contributes more directly, earlier, and throughout decision-making about capability. Smart Buyer is an integral part of the new CLC. It enables tailoring of the way in which projects pass through the CLC based on key project risks.

A naval shipbuilding industry

The Naval Shipbuilding Plan, released in May 2017, outlines the Government’s vision for the Australian naval shipbuilding enterprise and the significant investment required in coming decades.

The Australian Government is laying the foundations for an Australia-wide naval shipbuilding enterprise, ending the boom-bust cycle that has afflicted the Australian naval shipbuilding and sustainment industry. This will provide certainty to local businesses and shipbuilding workers.

The Government’s vision to maximise Australian industry involvement in the naval shipbuilding enterprise will see Australian industry actively involved in domestic and global supply chains, and workforce development and skilling initiatives.

The CDIC is at the heart of the new collaborative approach required to grow and sustain Australia’s defence industrial base, including the naval shipbuilding industry, and will have a key role in driving the industry’s long-term development and capacity.

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