Australian Government moves to support its defence industry

Line of Defence Magazine - 02 April 2020 Update

Hon Linda Reynolds CSC
Australian Defence Minister Hon Linda Reynolds CSC. Image from 2018; lindareynolds.com.au

The Australian federal government is implementing a range of measures to help Australian companies through COVID-19, including fast-tracked payments to defence industry to help mitigate the effects of the global pandemic. 

In a 27 March media release, Minister for Defence, Senator the Hon Linda Reynolds CSC said COVID-19 posed an unprecedented challenge to Australia’s defence industry.

“Defence industry makes an important contribution to our economy, our security posture and our safety,” Minister Reynolds said. “That is why we brought forward the payment of more than $500 million to businesses in Australia, which ensures money is flowing into the Australian economy at a time of acute pressure.”

Some suppliers will receive payment up to two weeks earlier than usual.

About 35,000 Australians are employed in the defence industry. “Australian small businesses are the backbone of our defence industry and we will continue to do everything we can to relieve the current pressures they’re under,” said Minister for Defence Industry, the Hon Melissa Price MP.

Additional measures in place include:

  • Making payment to suppliers as soon as possible after their invoice has been approved for payment by Defence, irrespective of the contracted payment terms;
  • Reinforcing to strategic prime contractors the important role their Australian sub-contractors play in ensuring prompt payment across the supply chain; and
  • Providing appropriate relief to contractors in circumstances of demonstrated adverse effects as a result of the COVID-19 crisis on the supply of labour, equipment, materials or services required to meet current contractual obligations.

Defence assistance to the construction industry will also extend to the Defence estate with a continued focus on delivering capital facilities and infrastructure works support existing and new capabilities. Contractual clauses have been amended to provide time and cost relief for COVID-19 impacts under Defence construction contracts.

Reflecting on these announcements Andrew Ford, Chair of the New Zealand Defence Industry Association (NZDIA) said: “it is good to see that these changes will benefit NZ businesses already supplying into Australia and to see that Defence in New Zealand is taking a similar approach, in having cognisance of the cashflow pressures currently on businesses large and small. “

Further information is available from the Centre for Defence Industry Capability at www.business.gov.au/cdic or cdic@industry.gov.au

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