Date presented to Minister: 25 September 2023
Hon Susan Close MP
Minister for Defence and Space Industries
This annual report will be presented to Parliament to meet the statutory reporting requirements of the Public Sector Act 2009 and the Public Finance and Audit Act 1987 and the requirements of Premier and Cabinet Circular PC013 Annual Reporting.
This report is verified to be accurate for the purposes of annual reporting to the Parliament of South Australia.
Submitted on behalf of Defence SA by:
Richard Price Chief Executive
Date 25 September 2023
From the Chief Executive
The defence and space industries continue to be a key driver of South Australia’s economic development, with these industries becoming increasingly crucial in the current geopolitical environment.
The state’s strengths in research and innovation will ensure we are able to develop new technologies that will advance our economic complexity while serving the needs our nation’s Defence Forces.
Several key developments occurred at a national level in 2022-23, including the release of the Defence Strategic Review and the optimal pathway for Australia’s new fleet of conventionally armed, nuclear-powered submarines. This has presented several opportunities for the state’s defence and space industries and throughout the year we have been working to ensure we are primed to take maximum advantage.
Under the optimal pathway, the naval shipyard at Osborne was confirmed as the build location for Australia’s fleet of nuclear-powered submarines, with the build of the shipyard creating up to 4,000 jobs from 2023. Over the coming decade, a further 4,000 to 5,500 direct shipyard jobs will be created.
While the nuclear-powered submarine build will see the first SSN-AUKUS delivered in the early 2040s, work is occurring now to ensure industry and the workforce are suitably skilled and ready to take on such a project, the scale and complexity of which we have never seen in Australia before.
The Defence Strategic Review reaffirmed a commitment to continuous naval with significant work also set for South Australia in the life-of-type extension of the Collins class submarines and combat system upgrades for the Air Warfare Destroyers.
The South Australian Government is working to support local industry to build capability, experience and expertise. In 2022-23 we saw record numbers of companies participating on the Defence State stand at key events including Land Forces and the Avalon Airshow, enabling industry to connect with international companies for export and supply chain opportunities.
The Osborne Naval Shipyard is one of the most digitally advanced of its kind in the world. The digital shipyard revolution for the Hunter class frigate program is being developed in close partnership with state and federal governments, industry and academia. To assist in the transformation, the Factory of the Future at Tonsley Innovation District is being developed as the nation’s first industrial scale, high value research and accelerator facility dedicated to modern naval shipbuilding techniques.
In terms of workforce, the South Australian Government is working closely with the Australian Government, industry and academia to develop the highly-skilled workforce required for future defence projects. A key undertaking, in conjunction with the Australian Government, is the South Australian Defence Industry Workforce and Skills Taskforce, which is due to release its report later in 2023.
The Defence Strategic Review highlighted the need to speed up the translation of innovative defence technology into real world capability for the Australian Defence Force. Launched in June 2023, the Defence Innovation Partnership’s Activator Fund has been created to facilitate this swift transition and provide solutions to the high priority innovation challenges identified by Defence. The Activator Fund is running alongside the Collaborative Research fund which funded four new projects and leveraged $1.9 million in co-contributions from universities, industry and the Department of Defence this financial year.
The South Australian Government’s commitment to the space industry is also unwavering, with the state at forefront of new technology development. This year saw some exciting new developments and growth across the industry, particularly in small satellite manufacturing, earth observation and research and innovation. Work has commenced on South Australia’s $20 million commitment to establish a new space manufacturing facility which will provide industry with access to world-class equipment capable of small satellite and component manufacturing, assembly, integration and test activities.
We are also continuing to inspire the next generation of space industry workers and are committed to outreach and educational activities through support of the Andy Thomas Space Foundation and initiatives such as the national Kids in Space program, with the 2023 program involving 70 students from eight South Australian schools.
South Australia’s defence and space industries have been presented with a number of challenges and opportunities throughout the 2022-23 year. Defence SA, the South Australian Space Industry Centre and Defence Innovation Partnership continue to support the development of these vital industries for South Australia; maximising opportunities to support the Australian Defence Force, the state’s economic development and the sovereign capability of our nation.
Overview: about the agency. 7
Our strategic focus. 7
Our organisational structure. 9
Changes to the agency. 9
Our Minister 9
Our Executive team.. 9
Legislation administered by the agency. 10
Other related agencies (within the Minister’s area/s of responsibility) 10
The agency’s performance. 10
Performance at a glance. 10
Agency specific objectives and performance. 12
Corporate performance summary. 26
Employment opportunity programs. 26
Agency performance management and development systems. 27
Work health, safety and return to work programs. 27
Executive employment in the agency. 29
Financial performance. 29
Financial performance at a glance. 29
Consultants disclosure. 30
Contractors disclosure. 30
Other financial information. 32
Risk management 32
Risk and audit at a glance. 32
Fraud detected in the agency. 32
Strategies implemented to control and prevent fraud. 32
Public interest disclosure. 33
Reporting required under any other act or regulation. 33
Reporting required under the Carers’ Recognition Act 2005. 33
Public complaints. 33
Number of public complaints reported. 33
Additional Metrics. 35
Service Improvements. 35
Compliance Statement 35
Appendix: Audited financial statements 2022-23. 36
Overview: about the agency
Our strategic focus
Defence SA is South Australia’s lead government agency for all defence related matters and is a single point of contact for all defence stakeholders, streamlining their interaction across the South Australian Government. The agency captures valuable investment opportunities in the shipbuilding, defence science and research, information warfare and space domains.
The Defence SA Advisory Board provides high-level strategic advice to promote the growth of the defence industry in South Australia and plays a key role in guiding the state’s defence strategy.
Within Defence SA sits the Defence Innovation Partnership, South Australian Space Industry Centre and Veterans SA.
(note: Veterans SA annual activities will be presented in a separate Annual Report to be submitted to the Minister for Veteran’s Affairs for tabling in the Parliament of South Australia and will therefore not be detailed in this report)
Defence Innovation Partnership – fosters collaboration and engagement between government, universities/research organisations and industry. The Defence Innovation Partnership helps deliver innovative solutions to Defence by creating connections between researchers, industry, and Defence; building and supporting defence-relevant collaborations through the Collaborative Research Fund; attracting research and development funding to South Australia; and supporting the translation of defence and national security research and development.
South Australian Space Industry Centre (SASIC) – provides a whole-of-state-government focal point for local industry and international companies and organisations to drive space industry innovation, research, and entrepreneurial development.
||By 2030 South Australia will be recognised as an international leader in the defence and space industries by building on its highly skilled workforce, world-leading technology and infrastructure and culture of innovation driven by focused research and development.
|Defence Innovation Partnership
||A trusted, forward-thinking, and sustainable defence-relevant research, development, and innovation ecosystem, supporting Australia’s defence and national security needs.
||A thriving and enduring South Australian space ecosystem, supporting Australia’s national space strategy, building on the opportunities of NewSpace.
||To establish and maintain a competitive business environment in the defence sector.
|Defence Innovation Partnership
||Catalyse a trusted and recognised R&D ecosystem that delivers valued outcomes to its stakeholders.
||To grow a thriving and enduring South Australian space sector, in partnership with industry.
Our functions, objectives and deliverables
||· Implementation of the Defence State Strategy 2030.
· Maximising business opportunities by influencing policy, connecting industry to global supply chains and attracting investment.
· Stimulating business capability by aligning local research and development, infrastructure and regulation with industry needs.
· Building business capacity by working to attract and retain talent in the state.
|Defence Innovation Partnership
||Stimulating business capability by aligning local research and development, infrastructure, and regulation with industry needs, in support of the Defence State Strategy 2030.
||Implementation of the Space Strategy, by cultivating South Australia as a centre of gravity for space activities:
o Building a capable workforce
o Creating an in