In November 2024, the United States Studies Centre convened 16 senior representatives of primes and SMEs from the Australian defence industry in Canberra to offer their initial reactions to the Albanese government’s recently unveiled Guided Weapons and Explosive Ordnance (GWEO) Plan. The group undertook a closed-door discussion of the opportunities espoused and challenges left unaddressed by the GWEO Plan. Attendees considered the pathway forward for their companies, for the Australian defence sector writ large, and for the security strategies of Australia and its partners. The report that follows summarises the anonymised perspectives of those stakeholders critical to the realisation of an Australian GWEO Enterprise.
Introduction
Australia’s GWEO Enterprise aims to strengthen the Australian Defence Force’s (ADF) sovereign capability by expanding munitions and missile stockpiles, domestically manufacturing guided weapons and supplementing international partners’ supply chains. Since the first announcement of Australia’s accelerated pursuit of sovereign GWEO capability in March 2021,1 Russia’s invasion of Ukraine, the associated depletion of partners’ stockpiles, and the simultaneous deterioration of the security environment in the Indo-Pacific have increased the urgency of implementation for Australia. Indeed, USSC experts have argued that GWEO is the lynchpin of Australia’s national defence strategy.2
The Australian government took significant, although not comprehensive, steps over the past 18 months to lend substance to Australia’s GWEO undertaking. Major announcements included the appointment of a Chief of Guided Weapons and Explosive Ordnance in June 2023;3 the allocation of A$58-74 billion over the decade for the ADF’s acquisition of long-range strike capabilities and the domestic manufacture of advanced munitions in the 2024 Integrated Investment Plan;4 and the issuing of a series of contracts with industry partners for near-term production efforts throughout 2024, including an A$850 million contract with Kongsberg Defence to manufacture and service Naval Strike Missiles (NSM) and Joint Strike Missiles (JSM) and an A$220 million investment in munitions factories at Mulwala and Benalla.5 Still, Australian companies awaited greater certainty of the government’s long-term ambitions for its GWEO Enterprise and decisions on both capability selection and ecosystem development to guide their investment.
The Albanese government’s GWEO Plan, released in October 2024, was a critical signal of the priorities, timeframes and long-term ambitions of the enterprise. The plan outlines the “objectives, initiatives, resources, and operating principles” governing the expansion of Australia’s defence industrial capabilities related to GWEO.6 It embodies months of official outreach to Australian industry stakeholders to inform an implementable path towards rapid industrial uplift. It endeavours to achieve an optimal balance of technological platforms, as well as a pragmatic mix of purchases from global partners and national production projects.
The report that follows summarises the Australian defence industry’s response to the government’s GWEO Plan. It conveys that industry representatives are impressed by the frequency of engagement they received from the government ahead of the plan’s release, the capability mix nominated, and the transformative changes already wrought at the government-to-government level in Australia’s US partnership to create industrial opportunities. Concerns endure, however, particularly surrounding the realism and relevance of the nominated timelines and the absence of ecosystem-wide planning and investment in Australia’s defence sector. Australian industry leaders view the release of the GWEO Plan as a positive step but merely as a point of departure for more ambitious and comprehensive planning with respect to Australia’s sovereign GWEO Enterprise.
1. Strengths of the GWEO Plan
Australian industry representatives commend the GWEO Plan for effectively communicating policy objectives, providing clarity that will enhance public understanding of the endeavour, and encouraging greater fluency on GWEO-related issues across the government. The plan strikes an appropriate balance between guided and non-guided systems, combining pragmatic procurement with long-term capability development. Additionally, it embodies Australian officials’ determined advocacy to their US counterparts to date to create a hospitable environment for co-production and co-assembly, which has already begun to produce opportunities for Australian firms. Its greatest strengths include:
Effective policy communication:The GWEO Plan was complimented by attendees for its clear and coherent articulation of the policy principles underlying the pursuit of an Australian GWEO Enterprise. Attendees understood that the plan is a useful statement of intent for media and expert audiences that can be leveraged to inform the public narrative around the GWEO Enterprise. Similarly, it is a helpful touchstone for Australian Government departments, within which fluency in GWEO-related issues is observed to be inconsistent. While industry representatives acknowledged that they were by no means the primary audience for this document, they were still pleased to find that the document contained no surprises. This is a demonstration of the robustness of the government’s outreach to industry ahead of its release. The commitment to a biennial review of the plan will ensure that communication of strategic direction remains consistent over time. This benefits both the whole-of-government organisation and the initiative’s defence industry partners.
Balanced technological approach: Industry participants agreed the plan sensibly nominated a diverse mix of technologies, achieving the right balance of both guided and non-guided systems and between purchases and production. Its strategic choices will see broad-based enhancement in Australian defence industrial capability. Attendees concurred the plan is effective at prioritisation and implementable. Stakeholders affirmed the pragmatic purchasing decisions encompassed in the plan, agreeing that — especially in the near term — domestic manufacture is not logical for every capability. They also accepted that the government needs to be ruthless in its selection of price-competitive options. Efficiency remains paramount for the GWEO Enterprise to be delivered at the speed of relevance.
The plan makes clear that sophisticated cooperation with the United States will be indispensable in the realisation of an Australian GWEO Enterprise.
Optimised US partnership: The plan makes clear that sophisticated cooperation with the United States will be indispensable for the realisation of an Australian GWEO Enterprise. Industry representatives identified the strength of government-to-government engagement as the most significant enabler for progress on co-assembly and co-production. This was viewed as one of the Australian Government’s greatest achievements to date with respect to GWEO. Industry representatives were enthusiastic about capitalising on the momentum in Australia's US partnership and saw further policy reforms in this area as the pacesetter for future industrial cooperation.
Increasingly tangible opportunities across the supply chain: Relatedly, defence industry representatives observed that the plan and the various contract announcements that preceded it were a positive step forward in preparing Australia to contribute to a global munitions supply chain. Already, their organisations feel that the government’s public clarity on intended capability outcomes has changed the way international suppliers perceive work opportunities in Australia across the future supply chain. The plan sets Australia on a pathway to become a regional defence hub and meet not only US but also other global partners’ requirements in the future.
2. Remaining challenges
Ahead of its release, industry representatives did not expect the plan to answer every question associated with the complicated endeavour of rapidly standing up a sovereign GWEO enterprise. Nevertheless, attendees highlight several conspicuous gaps in the GWEO Plan, particularly related to the broader ecosystem investment necessary to underly announced capability development. In addition, they observe that significant challenges endure that will ultimately shape the outcomes that Australia’s GWEO Enterprise will deliver. Their critiques of the plan include:
Lack of granularity for defence industry planning: Though the plan performs strongly as a policy document, it lacks the detail necessary to contextualise its selection of missile capability priorities with overarching direction for the defence industry writ large. Key enterprise enablers such as workforce, supply chain, logistics, and testing and evaluation are absent from the plan or lacking in the granularity required for industry planning purposes. Defence industry representatives noted that irrespective of ‘big’ announcements on capability selection and acquisition, a lack of sustained and targeted investment in adjacent ecosystem-level levers will prevent sovereign production from materialising at the speed of relevance. It was not yet clear to attendees how the government plans to approach this next stage of planning for the enterprise. Certification was identified by participants among the most significant possible bottlenecks, given the impracticalities and protracted timelines of sending capabilities overseas for evaluation. Industry stakeholders also emphasised the need for clearer guidance on the level of private investment required to support enterprise development. Without greater direction and guaranteed returns, industry observed that it will be challenging to justify investing in scaling up their workforces and supply chains.
Some participants expressed doubts about the viability of certain milestones and queried how plans and strategies could adapt to possible delays in production.
Disagreement as to the suitability of timelines: The timelines set out for capability acquisition and production were questioned by attendees for both their realism and their appropriateness considering regional strategic realities. Some participants expressed doubts about the viability of certain milestones and queried how plans and strategies could adapt to possible delays in production. Conversely, other attendees were concerned that the timeframes for sovereign production were so protracted as to disallow Australia from seizing the opportunity to meet US requirements at all; they warned that the US industrial base may arrive at its own solution ahead of Australian production if timelines were not accelerated. Attendees agreed that the degree of uncertainty in Australia’s strategic environment, recognised plainly in 2023 Defense Strategic Review and 2024 National Defence Strategy, would optimally inspire faster capability delivery than has been specified in the plan. Industry representatives warned about the dangers of ‘too much haste, and not enough speed’. Industry representatives also urged the government to focus on supporting defence industry bodies in obtaining the necessary level of technical expertise and industry capability to deliver GWEO components and sub-systems in a timely way, appropriate to immediate strategic needs.
Insufficient enablers for SMEs: Defence industry representatives noted that the plan lacks guidance, or indeed a clear role, for small and medium enterprises (SMEs). The only certainty provided in the plan is for those partners who have already received major contracts. Though announced efforts promise opportunities across the supply chain, the pathway does little to inspire and enable SMEs to seek these opportunities. Part of the issue is the lack of investment beyond specific capability acquisitions. An absence of incentive structures and broader enabling functions is also of concern. For instance, engagement with the National Reconstruction Fund is both difficult to understand and the approach of refinancing debt fails to solve the most significant impediments to SMEs' participation in the enterprise, as they require an existing business case demonstrated in contracts.7
3. Industry’s priority enablers for implementation
Industry representatives are eager to embrace the opportunities presented by a sovereign GWEO Enterprise. To enable their input and to achieve an outcome commensurate with the strategic needs of Australia and its partners, industry representatives recommend several measures for the government to focus its attention in the coming two years:
Expand sovereign production capability for critical componentry: A recurring suggestion was to prioritise the domestic production of critical systems beyond energetics. Solid rocket motors, as already announced, are a useful starting point. Suggested additional priorities included seekers, guidance systems, and command and control components. This focus would have several benefits: upskilling Australia’s production workforce; supplementing shortages in partners’ supply chains; and achieving sovereignty over the components hardest to acquire in a time of conflict. Prioritising componentry also has the advantage of offering officials flexibility on future capability decisions.
Prioritise sustainment efforts: The plan’s implementation should place greater emphasis on sustainment activities, including testing and evaluation. Developing near-term maintenance capability will be integral both for national needs and also to Australia’s value proposition to regional allies and partners. It is particularly important during times of crisis, where sending capabilities overseas for maintenance would be problematic. Sustainment capability, like production, is market-driven, and Australian industry is awaiting government clarity as to its demand in this area before investing accordingly.
Earning the confidence of Australian allies and partners in the Indo-Pacific and Europe will be helpful in realising Australia’s ambition of becoming a reliable “second source of supply” and supporting partners’ deterrent efforts.
Build the confidence of global partners: Earning the confidence of Australian allies and partners in the Indo-Pacific and Europe will be helpful in realising Australia’s ambition of becoming a reliable “second source of supply” and supporting partners’ deterrent efforts. Importantly, securing a foothold in allied supply chains is essential to ensuring continuity of demand to provide a business case for the Australian defence industry. Globally, the instinct of various partners’ governments is to onshore manufacturing in light of threats to global supply chains.
Ensure continuity of policy: A stable and consistent approach to contracts and policy is vital for industry confidence. Stakeholders warned that significant revisions to the plan following a change in government could be detrimental to progress and undermine industry efforts. Attendees welcomed the Australian government’s commitment to providing regular updates to the plan, as well as broader strategic defence analysis and documents, but noted that it will be equally important for such government documents to align with each other to achieve coherence across government.
4. Looking to the future
The GWEO Plan is a starting point, rather than the definitive end point of planning for this national effort. Australian industry leaders remain optimistic about the potential for the GWEO Plan to evolve and become more ambitious in the coming years as Australian capability and confidence grows. The most significant long-term dynamics that will shape future planning identified by attendees include:
Future uncertainty of global demand: The reality of Australia’s size is that its GWEO Enterprise cannot be sustained by national requirements alone. The Australian Government is unable to create a demand signal large enough for industry organisations to achieve sustainability. Industry accepts that the inherent uncertainty of future global demand signals is not a challenge that can be answered in this plan or one that can be confirmed overnight. However, attendees were clear that more work must be done at the government-to-government level across Australia’s international partnerships in the future to support industry with the export piece and provide as much certainty as possible.
Australian industry leaders remain optimistic about the potential for the GWEO Plan to evolve and become more ambitious in the coming years as Australian capability and confidence grows.
Overcoming bureaucratic challenges to strategically leverage industry: One of the greatest hurdles identified by industry is navigating bureaucratic inertia. Industry representatives observed that much of their time has been spent educating the so-called ‘frozen middle’ in the Australian bureaucracy about the strategic value located in industry, and, as a result, opportunities have been missed. Though the GWEO Group has become effective at outreach, more imaginative approaches to industry input, procurement processes and pushing out work should prove useful. There is still thinking to be done in how the government can ‘lean in’ to maximise the value of its formalised strategic partners to the Enterprise. For its part, industry attendees noted the need to input into each biennial update to the GWEO Plan and propose industry-led solutions.
Sustaining US buy-in: US interest and input into Australia’s GWEO Enterprise must be carefully managed, noting ongoing reticence across the US services to embrace partnership with Australia. While the result of the US election is not seen as a pivotal factor, attitudes within Congress and the defence and foreign policy bureaucracies will shape Australia’s access to opportunities within US supply chains. The Australian Government cannot be complacent. Regulatory reform to the US Missile Technology Control Regime and a broader acceptance of multi-year contracting in US Congress are viewed as important enablers for co-development on GWEO. Australian industry bodies and officials must be in lockstep in prosecuting both the strategic and business case for collaboration.
Conclusion
The Australian GWEO Plan strikes an effective balance between setting expectations and delivering policy depth. The document demonstrates resolve behind an initiative that has been deemed integral to Australian security, establishes a baseline for defence capability in related areas and carves out an agenda for the coming years. The government now needs to move quickly to inform and engage industry on critical system enablers including workforce, certification, supply chains, logistics and testing and evaluation. Industry’s participation in Australia’s GWEO Enterprise will be shapes by the government’s effectiveness at assuring business confidence for both primes and SMEs and demonstrating Australia’s value proposition to a global marketplace.