Australia Defence & Security Report

Published 13 May 2015

  • 71 pages
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Australia Defence & Security Report

BMI View: We expect Australia ' s defence budget to continue increasing in absolute terms in the next five years. This will be driven by Australia ' s defence policy focused on becoming a key player in regional and international security, which will require an upgrading of both its navy and air force capacities. The government is looking to take advantage of the globalisation of the defence market to continue importing defence materiel whilst, simultaneously, facilitating Australian defence SMEs ' access to the market. This will open up development opportunities for both international and national companies operating in the defence sector.

In its 2009 Defence White Paper, Australia spelled out its Force 2030 strategic defence objective. It aims to redefine the role of the Australian Defence Force (ADF) to one that is not limited to defending the country from potential regional and international threats, but instead also focuses on building Australia's reputation as a key player in regional and international security. This will therefore involve a significant upgrading of the Royal Australian Air Force (RAAF) and the Royal Australian Navy (RAN). The latter, in particular, will be crucial as Australia's current fleet of diesel and electric-powered submarines is reaching the end of its life cycle and needs to be replaced. These objectives were restated in the 2013 Defence White Paper and Australia's defence spending forecasts continue to point to the importance of such defence strategy.

In this context, Australia will be seeking to take advantage of the globalisation of the defence market on two fronts. Firstly, it will seek to promote the expansion of the Australian defence market through the establishment of more support mechanisms for SMEs operating in the sector. This will be done, primarily, through the implementation of the Australian Industry Capability (AIC) programme, which requires bids for defence projects at or above the USD20m threshold value to...

BMI Industry View
7
SWOT
9
Australia Defence SWOT
9
Political
10
Economic
11
Operational Risk
12
Industry Forecast
14
Defence Expenditure
14
Table: Defence Expenditure (Australia 2012-2019)
15
Armed Forces
16
Table: Armed Forces Personnel (Australia 2005-2012)
16
Table: Manpower Available For Military Service (Australia 2012-2019)
17
Defence Trade
18
Table: Defence Trade Balance (Australia 2012-2019)
18
Imports
19
Table: Defence Imports (Australia 2012-2019)
20
Exports
20
Table: Defence Exports (Australia 2012-2019)
21
Macroeconomic Forecasts
22
Economic Analysis
22
Table: Economic Activity (Australia 2010-2019)
27
Industry Risk Reward Ratings
28
Australia Security Risk Index
28
Table: Asia Pacific Defence Risk Reward Index
28
Rewards
29
Risks
29
Market Overview
31
Australia Security Overview
31
Domestic Threats
31
Regional Threats
32
International Threats
34
Defence Market Overview
34
Domestic Defence Sector
36
Domestic Market
37
Defence Agreements
38
Table: Defence Agreements
39
Deployments
39
Table: Deployments
40
Company Profile
41
Austal
41
Boeing Australia
43
BAE Systems Australia
44
Raytheon Australia
46
Thales Australia
47
Regional Overview
48
South East Asia Security Overview
48
Challenges And Threats To Stability And Security
48
Global Industry Overview
61
Political Risk Analysis
61
Methodology
68
Sector-Specific Methodology
69
Table: Defence Risk Reward Index Indicators
69
Weighting
70
Table: Weighting of Defence Risk Reward Index
70

The Australia Defence & Security Report features BMI Research's independent forecasts for national and international security, the defence industry, military expenditure, employment in arms production, and arms imports and exports, as well as examining industry trends and prospects, national and multinational arms producers and the regulatory environment.

BMI's Australia Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Australian defence and security industry.

Key Benefits

  • Benchmark BMI's independent defence and security industry forecasts on Australia to test other views - a key input for successful budgetary and strategic business planning in the Australian defence and security market.
  • Target business opportunities and risks in the Asia defence and security sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Asia.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage

Global and Regional Political Outlooks

A strategic overview of the world’s major political risks, identifying countries facing leadership successions and nations at risk of upheaval, inter-state conflict, or separatism and insurgencies, plus a summary of the world’s ‘wild card’ low-probability high-impact risks.

SWOT Analysis

Snapshot evaluation of the major issues affecting the defence and security sectors, economy and politics, with issues subdivided into strengths, weaknesses, opportunities and threats.

BMI Industry Forecast Scenario

Historic data series and forecasts to end-2019 for key industry indicators supported by explicit assumptions, plus analysis of key downside risks to the main forecast.

  • Defence Expenditure: Defence expenditure (local currency and USDbn); defence expenditure (% of total budget); defence expenditure per capita (USD); defence budget (local currency and USDbn).
  • Armed Forces (to 2012): Manpower available for military service, manpower fit for militaryservice, army personnel, navy personnel,air force personnel, total armed forces, (‘000) (% population).
  • Arms Trade: Arms and ammunition exports and imports (USDmn); bombs, grenades and missiles exports and imports (USDmn); revolver and pistol exports and imports (USDmn); weapons excluding guns and swords exports and imports (USDmn).

Political Risk Assessment

Drawing on BMI’s heritage of more than 25 years of Country Risk analysis, this comprehensively evaluates the key risks to domestic politics and foreign relations, focusing on issues most likely to affect either domestic security or the defence sector.

Security Risk Analysis

BMI’s proprietary Security Risk Indices provide investors with a reliable and country-comparable guide to conflict, terrorism and criminal risk, backed up by our analyst’s latest assessment of each component. Furthermore, drawing on our Country Risk expertise, we assess the state’s vulnerability to a serious, or prolonged, terrorist campaign.

Armed Forces Spending/ Expenditure

The reports contain a detailed breakdown of areas of expenditure by the armed forces, these include spending on international deployments, WMDs and missile defence systems as well as individual breakdowns of the cost-per-soldier.

Competitive Landscape

The domestic security overview lists the various potential internal security threats facing a country, ranging from internal security issues such as terrorism, cyber terrorism, crime and drugs, to external security issues including general defence procedures and potential threats from specific countries. The reports also provide a regional overview which details specific issues and flashpoints affecting the Americas, along with potential risks in the coming year.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Defence & Security Market reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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