DSR can reform Defence capability procurement

Macquarie Government says the Albanese government’s release of the public version of the Defence Strategic Review (DSR) is the strongest indication yet of the importance of cybersecurity to government and Defence capabilities.

The DSR (to which Macquarie contributed a detailed submission during public consultation) sets the agenda for ambitious but necessary reform to Defence’s posture and structure. The DSR notably places strong emphasis on cybersecurity as an important defensive and offensive capability within Defence, and hints at a new commitment by the Albanese government to grow Australia’s sovereign industrial capability through the DSR’s updated uplift programs.

“The new regional strategic environment articulated in the DSR underscores the need to include cybersecurity in the Defence reform agenda given its horizontal effect across all five military domains, notwithstanding to Australia’s critical infrastructure and systems of national significance,” said Macquarie Government Managing Director Aidan Tudehope.

“Cyber is a form of power projection which can be used in advance of kinetic attacks, or to cripple critical national infrastructure. It is also a tool of statecraft that is used for coercion, as the DSR has rightly called out. To unilaterally deter offensive military action against Australia’s forces, and to protect Australia’s social and economic interests, high-level cyber capability and the digital infrastructure that supports it must be fundamental to Defence capability.

“The Prime Minister has rightly called out the ‘need to have greater control over our national sovereignty’. In this context it’s important to call out local industries that are directly supporting Defence, including cybersecurity, ICT and space. When these sectors are strong Australia is less vulnerable to global supply chain challenges and less reliant on our allies and partners for enabling capabilities during conflict,” he said.

Macquarie also welcomed the recommendation for a biennial National Defence Strategy, particularly given the speed at which cyber threats continue to evolve. Macquarie’s cyber engineers now monitor between seven and eight billion cyber events every day, protecting nearly half of federal government agency personnel from cyber attacks.

Tudehope applauded the government’s recommendation to reform Defence capability procurement; specifically, to focus on ‘delivering timely and relevant capability’ and move away from ‘project management risk’ towards ‘strategic risk management’.

“This guidance will help Defence achieve the right balance of local-ally-partner capabilities to support the ADF warfighter. A balance that will ensure Australia is a capability contributor to AUKUS and not solely a capability consumer,” he said.

In conclusion, Tudehope said the DSR presents an opportunity for the government and Defence to be bold in uplifting Australia’s sovereign industrial capability, and that doing so will provide national resilience through robust cybersecurity, data networks and space capabilities with capacity to scale, just as the DSR calls for.

“The Defence Strategic Review has rightly articulated both the threat and the opportunity,” he said.

“We have, through the DSR, the opportunity for Australian primes to grow and thrive in partnership with our international partners, bolstering Australia’s security, creating jobs and ensuring scientific and technological prowess that will improve knowledge, innovation and expertise for decades to come.”

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