THE HON ANDREW HASTIE MP

SHADOW MINISTER FOR DEFENCE

SHADOW MINISTER FOR DEFENCE INDUSTRY

SHADOW MINISTER FOR DEFENCE PERSONNEL

FEDERAL MEMBER FOR CANNING

 

SPEECH
ADDRESS TO THE 2025 ADM CONGRESS

WEDNESDAY 19 FEBRUARY 2025

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Good afternoon, everyone and thank you very much for the welcome and for having me here today.

I’m here to talk about the task of rebuilding Australia’s defence industrial base.

It’s a hard task.

It’s one of the toughest jobs facing the Australian people today.

Under the Albanese Government, the economic conditions are hostile.

Inflation is sticky. Productivity is down. Our energy costs are at record highs. The labour market is tight.

And there isn’t any new money coming from the Albanese Government.

There is no signal that they are backing our local defence businesses.

Our defence industrial base is leaderless.

In fact, the Albanese Government is starving our defence small and medium enterprises of funding.

I hear often from Australian defence industry businesses —big and small —struggling against this reality.

Businesses are waiting too long to receive work orders for contracts they’ve already won.

The design of major projects often puts Australian businesses at a disadvantage against foreign competitors.

Cuts, delays, rescopes, and indecision on projects mean that businesses have no certainty for a return on their investments.

Local businesses have gone under, and others are moving their operations offshore, ultimately at the expense of Australia’s industrial base.

Indeed, the Albanese Government is doing its best to channel the spirit of Ebenezer Scrooge with its tiny commitment of $5.7 billion over the forward estimates.

Their so-called investment only exists past the forwards and late into the decade.

That makes it a tough fiscal environment for our patriotic defence sector businesses to rebuild our sovereign industrial base.

Because our defence industrial base won’t rebuild itself – let’s be clear. The task requires political leadership.

The task requires drive and vision.

The task requires a close partnership between the Australian government and our private sector.

And we are not seeing any of those things under Labor.

We are not seeing political leadership from the Albanese Government, even though we’ve been told of the strategic dangers that lurk beyond our shores.

Dangers not seen since the end of the Second World War when the United States accepted the surrender of the Japanese aboard USS Missouri in Tokyo Bay.

Since 1945, Australia has been the beneficiary of Pax Americana with our lines of trade and communication secured by US naval power for almost eighty years.

Pax Americana is now fracturing with the pressure of geopolitical competition.

We live in dangerous times. The pressing threats to peace and stability, particularly in our region need no explanation to this room. You all get it and I’m confident of that.

That’s why there should be a sense of urgency about rebuilding our sovereign defence industrial base.

Australia needs to be strong, Australia needs to be sovereign, and Australia needs to be self-sufficient.

That is the lesson of Ukraine and October 7.

We need to bulk up our strategic weight.

Industrial power is a key input of strategic weight.

We need to be able to give a punch, and we need to be able to take a punch in this dangerous world.

But there’s another looming challenge that we need to deal with as we grapple with the task of rebuilding our defence industrial base.

And it comes from our closest security partner.

It’s an economic challenge posed by the United States under the leadership of President Trump.

We’re seeing signs of that economic challenge already, with the US announcement of tariffs on Australian aluminium and steel.

But the economic challenge goes much deeper than that.

It’s an economic challenge that poses both risks and opportunities for our Australian defence industrial base.

To be best positioned to meet that challenge, we need to understand what is going on and respond in a rational manner.

Hyperventilating will get us nowhere. Nor will pejorative social media posts about President Trump.

Prime Minister Albanese has discovered this far too late, and it has left Australia flatfooted. To the detriment of our economic and strategic interests. That is the cost of weak leadership.

Rather than emotional responses, I think we must try to understand the underlying logic of what is happening in the Trump Administration.

Last July, I bought Peter Navorro’s book ‘The New Maga Deal: The Unofficial Deplorables Guide to Donald Trump's 2024 Policy Platform’ at a Nashville bookstore in Tennessee.

Navarro made it clear where a second Trump Administration was headed: tariffs coupled with aggressive supply side domestic economics to recover American prosperity and manufacturing.

His presence centre-stage in a keynote speech at the Republican National Convention all but confirmed that his voice would be prominent in a second Trump Presidency.

Navarro’s comment last week that Australia is killing the US aluminium market was a reminder to us that we need to take people like Peter Navarro seriously.

None of this should be a surprise to policymakers in Canberra or Washington DC.

Yet people comfort themselves that President Trump is conducting policy by instinct, that his dealmaking is untethered to rational strategic or political ends.

But I think it’s clear there are deep intellectual undercurrents that can help us understand what is going on in the United States and why.

There are intellectuals who have been making the case for President Trump’s latest moves for a number of years now.

People like Oren Cass and Michael Lind who have long argued that American workers have been hammered by decades of wage stagnation.

That American workers have been failed by a bipartisan political consensus that prioritised globalisation and consumption over US jobs and domestic production in the United States.

Cass wrote about this in his book ‘The Once and Future Worker: A Vision for the Renewal of Work in America’, published in 2020.

Michael Lind made similar arguments in ‘Hell to Pay: How the suppression of wages is killing America’, published in 2023.

Both argue that practice of global labour arbitrage has smashed the American working class.

That’s what the Trump Administration believes it is tearing down – the offshoring of jobs and factories to foreign jurisdictions at the expense of American workers and manufacturers.

Vice-President JD Vance—with his remarkable personal story—carries the flame for the parts of the US that have suffered most from global labour arbitrage.

That is why President Trump’s political and economic messaging are so tightly woven. 

It’s about recovering American jobs and industrial capacity.

How does the Trump Presidency do that?

Here’s where I think Australian defence industry needs to pay close attention to strategic trade as a tool used by President Trump for recovering American jobs and manufacturing. 

Michael Lind argues for strategic trade as a way of recovering US industrial jobs and capacity, and he provides a useful framework for interpreting the moves undertaken by the Trump Administration.

Lind argues that strategic trade can be broken down into a mix of four components: selective protectionism; selective free trade; reciprocal trade and managed trade.

First, selective protectionism would involve the use of tariffs, subsidies, quotas or procurement policies by the US to localise or onshore critical industries they want to regain and protect. Think of the steel and aluminium tariffs to recover those industries. Or industries and supply chains critical to US national security.

Second, selective free trade would apply in certain sectors like agricultural, mineral and energy commodities. Sectors that trade low-value-add commodities essential for advance manufacturing. Think rare earths, critical minerals, oil and gas. Areas that we have a natural advantage in due to our massive reserves here in Australia.

This would allow the US to protect selective industries—say microchips—but retain a supply of essential inputs like silica. Australia is the second-largest exporter of silica in the world.

Australia would be well positioned to capitalise here with the US with our strong commodities markets in rare earths and critical minerals.

Third, reciprocal trade would involve the US striking bilateral trade deals with countries for security and economic reasons. Think of AUKUS—both Pillar One and Two. Think of the opportunity for Australian defence businesses if we are able to strike a good deal with the Trump Administration.

Finally, managed trade. This sort of trade would be influenced by diplomatic and military considerations alone – not economics.

This sort of trade could build military alliances or assist with the development of partner country capacity.

AUKUS comes to mind with the establishment of a US submarine base at HMAS Stirling in Perth from 2027. Australia, in turn, will get US Virginia class nuclear submarines at the start of the next decade. AUKUS is a form of managed trade.

The point here is that President Trump is using strategic trade to recover advanced manufacturing jobs and factories to the United States.

And we should at least try to understand what is going on in a systematic way so we can best position ourselves to maximise our natural advantages.

There are significant risks.

The risk is that President Trump makes it even tougher for Australian small and medium enterprises who already struggle against Defence’s institutional preference for Foreign Military Sales.

The risk is that US Primes with a business presence here in Australia move with the prevailing winds and do more of their work in the United States.

That the Trump Administration demands more defence industry to be done in the US as part of his reshoring strategy.

But there are opportunities for Australian defence industry, so long as we think rationally and understand what is going on with the Trump Administration.

We have a good hand; we just need to play it well.

There is no doubt that we will remain a leading exporter of commodities critical to advanced manufacturing in the defence and space sectors.

But Australia has plenty of leverage when it comes to reciprocal and managed trade with the United States.

We have a long history of being a reliable partner to the US in times of peace and war.

We bring strategic depth to the United States by virtue of our geography. That’s what we’re doing in Alice Springs, Darwin and Perth.

We have an abundance of critical minerals and rare earths, essential as inputs and feedstock for the US industrial base.

In other words, we are a safe place for US investment—together we could get a lot done.

But it will require political leadership.

It will require us to define and insist on sovereign Australian content and local manufacturing.

It will require us to speed up our procurement processes within Defence.

It will require the Australian government to fight for our small and medium enterprises.

To back them. To fund them. To scale them.

And then export to the world.

That’s the vision. That’s what needs to happen.

Every time a French or British or American Prime steps through my door in Parliament, I can feel the presence of their national government not far behind them.

Government will always be involved in defence industrial projects, despite what the free-market fundamentalists might say.

The question is: which government do you want involved in Australian defence industry?

I know there is deep frustration across the sector with the mixed signals, indecision and confused priorities under the Albanese Government

I want Defence backing our patriotic businesses.

I know that you do, too.

We’ve got so much skill and intellectual property here that with a bit of money and a bit of leadership, we can supercharge and really develop our own unique advantages that we can sell to the world.

That’s what you will get with a Peter Dutton-led Coalition government.

You’ll see more investment in the Defence budget, contrary to what Pat Conroy said this morning.

You’ll see more investment in our sovereign defence industrial base.

You’ll see a tighter weave with Defence and the private sector as we rebuild our defence industrial base.

The expertise and insight of Australia’s defence industry in the private sector needs to be elevated in our national strategic decision making.

You’ll see reform to get procurement policy moving at a speed that is consistent with our strategic circumstances.

You’ll see stronger, shrewder political leadership when dealing with allies like the United States.

You won’t have a Prime Minister who has confessed to being scared of President Trump.

Rather you’ll have Peter Dutton, an experienced leader, who will be able to secure favourable deals for Australian defence industry.

That’s what matters.

Money matters – you’ll see an increase in Defence spending under the Coalition.

Reform matters – we are going to insist on sovereign industrial capability and speeding up the procurement of capability.

Confidence matters – we are going to back Australian defence industry to build up our industrial base, to deliver warfighting capability to the ADF and to export cutting edge technology to our partners.

Finally: leadership matters – without strong leadership, we won’t get money or the reform or the confidence that Australia so desperately needs.

Thank you.

[ENDS]