London, June 21, 2012 – During the review period, the defense
expenditure of Australia exhibited a CAGR of -1.42% to reach an estimated
US$28.5 billion in 2012, and is expected to grow at a CAGR of 5.13% over the
forecast period to reach US$38.8 billion by 2017.The government is expected to
make cumulative capital acquisitions of US$40.2 billion during the forecast
period, 35% of which will be procured from domestic firms, in order to support
government plans to increase the independence of its defense industry. The
acquisitions are expected to focus on the improvement of capabilities of the
Australian Air Force and Australian Navy (reference see graph below
The Australian DMO has taken criticism for the project delays and cost
overruns associated with its domestic defense procurements, several of which
have cost double the original estimations. Currently, the Australian defense
industry is facing cost overruns and delays in its project to acquire 100 F-35
joint strike fighters. As a result, similar opportunities may be offered to
foreign firms, rather than domestic firms, during the forecast period.
The
Australian Industry Capability (AIC) program supports the domestic defense
industry by encouraging foreign OEMs to grant domestic access to the global
supply chain in exchange for market entry. Global supply chain deeds can be
entered into voluntarily or as part of a procurement contract, and insist that
the foreign OEM procures its equipment or components from a domestic company.
While global supply chain deeds offer substantial export opportunities to
domestic firms, they can pose major concerns for foreign OEMs, as Australian
defense products are often expensive due to high labor costs and expensive
logistics related to the country’s geographical location.
The
Australian Government’s November 2009 Cyber Security Strategy professed the
fact that Australian Government computer networks are increasingly under threat
from malicious cyber-attacks. Recently the Government has initiated the
Internet Gateway Reduction Program, which aims to reduce the number of internet
gateways to the minimum for improved operational efficiency, reliability and
security. The domestic Australian cyber security industry is entering into
partnerships with the US cyber security participants in order to gain technical
and strategic insights into the domain.
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