ByAdam Zarth -- Executive Director, Business Illawarra

The communities of the Illawarra and the Shoalhaven need to sign on for the significant economic opportunities offered by growing our local defence industry - and the business community has a key role in positioning our region to benefit from them. 

Sovereign capability – the ability to make things here - is now a top government priority to insulate us from the kind of massive supply chain interruption caused by global shocks like COVID and the war in the Ukraine. 

With Commonwealth defence spending budgeted to total $575 billion by 2029-30, our region is positioned exceptionally well to benefit by growing new and existing industries, adding high-value jobs and receiving major investments in infrastructure and skills.

We have major strengths in this sector - not least of which being the only steelworks on the eastern seaboard - and a strong defence industry and supply chain in the Shoalhaven that extends north into the Illawarra as well.

The NSW Government is aggressively pursuing a greater share of the growing defence dollar, and Investment NSW is charged with the important task of delivering a NSW Defence and Industry Strategy to articulate a roadmap for expanding defence-related jobs, investment and innovation across the state. 

We must ensure that the Illawarra-Shoalhaven is front and centre of the state strategy, and all other considerations for defence industry growth at a national level. 

As the peak body representing all businesses with a clear mandate to support our region’s economic growth, Business Illawarra will contribute to this ambition. In the first instance we’ll be leading the development of a regional-level strategy that will articulate our strengths and position us well to benefit from this opportunity.

Every dollar spent in the defence industry has a significant multiplier effect in the rest of the economy, creating jobs and growth in all sectors that support it. More than that, the technology and expertise clustered around defence industries create spin-off opportunities in related high-value sectors such as medical and agricultural technology, education and research, information technology, finance, energy and mineral resources. 

This is how the defence industry will become a catalyst to further economic growth in the Illawarra and Shoalhaven. 

The best way of achieving that end is the establishment of defence precincts and regional centres of excellence that are large enough to deliver the benefits of scale but small enough to maintain regional engagement and collaboration to ensure efficiency.

We also intend to inform the thinking of the Greater Cities Commission which will soon commence its Illawarra-Shoalhaven city planning process. The Commission has already identified that in future we will likely be recognised as “being anchored on maritime defence and aerospace capabilities.”

Both the Illawarra and the Shoalhaven already play quite extensive roles in Australia’s current defence networks, most prominently in the Shoalhaven where HMAS Albatross, HMAS Creswell, Beecroft weapons range, and the School of Survivability and Ship Safety are located. 

Additionally, prime defence contractors BAE Systems, Lockheed Martin, Sikorsky Helitech, Raytheon, Air Affairs and CAE operate in the Shoalhaven. Shoalhaven City Council, Department of Regional NSW and the Shoalhaven Defence & Industry Group work together to ensure local coordination and cooperation activities are delivered across the sector at a local level.

The Illawarra’s expertise in steelmaking, information sciences and academia alone demonstrate it has huge capacity to expand into this domain, and groups like Invest Wollongong, i3net and RDA Illawarra have been playing important roles in promoting our capability for some time. They are supported in this by entities like the Illawarra Shoalhaven Joint Organisation and AusIndustry.

There are many existing defence sector industry stakeholders across our broader region, so to maximise collaboration and benefit from their experience and insights, Business Illawarra established a working group that it chairs to be a platform for collaboration between government and industry in the development of a regional defence industry development strategy for the Illawarra-Shoalhaven.

There will be deep consultation with all existing industry players, including NSW Ports, BlueScope as well as the breadth of our local manufacturing and tech sectors.  

As part of the trilateral security pact with the United States and the United Kingdom (AUKUS), three eastern Australia locations (Brisbane, Newcastle and our own Port Kembla) have been shortlisted to become a new naval base, Fleet Base East; an addition to Fleet Base West at HMAS Stirling in Western Australia. 

While a long-term eventuality, AUKUS must be considered in this work for the opportunities as well as challenges it may present our region. Fleet Base East is expected to require a $10 billion investment up front, which will be followed by billions injected into the economy annually for the ongoing support of the base.

Business Illawarra will launch this work early next year to ensure that our defence industry not only takes off but becomes another key aspect of a thriving and sustainable regional city economy.