Wednesday, 20 August 2025
Rydges Resort Hunter Valley, Lovedale
Her Excellency the Honourable Margaret Beazley AC KC

I acknowledge the Wonnarua People, Traditional Owners of these lands, and pay my respects to their Elders past, present, and future. I extend that respect to the Elders of all parts of our State from which you have travelled.

The overarching theme of this year’s Hunter Defence Conference, now in its 15^th year, is “The Changing Nature of Warfare”.

You will have heard, by way of Tim’s introduction this morning, much on this already, including the impacts of rapid technological change, increasing geo-political instability, and the erosion of a global rules-based order, with consequent changes in what warfare looks like and how it is articulated. The destabilization of the international frameworks through which war might be prevented have been correspondingly undermined.

Today, I will confine my remarks to some brief observations on Australia’s immediate and most important strategic environment, the Indo-Pacific, which like the nature of warfare is in a seemingly accelerating state of change.

The Australian Government’s 2023 Defence Strategic Review^[1] described the Indo-Pacific as:

the most important geostrategic region in the world. It is a region whose stability and global integration has ushered in decades of prosperity and enabled the incredible growth of regional economies, including China. […] It is defined by a large population [and] unprecedented growth.^[2]

The Review also pointed out, however, that, lacking an established regional security architecture, the Indo-Pacific region, as a strategic environment, was as dynamic as its economic growth, and increasingly, and worryingly, volatile.^[3]

Last year’s National Defence Strategy^[4] reiterated and expanded upon this characterisation, noting that Australia faces its most challenging and deteriorating strategic context since the Second World War—thrown into emphatic relief, for instance, by the dramatic erosion of an assumed ten-year warning time for conflict in our region. Alarmingly, given this scenario, we maintain a defence posture, force structure, and capability which is no longer fully fit for purpose.^[5]

Moreover, as was made clear in the 2023 Defence Strategic Review, Australia’s major defence partner, the United States, is “no longer the unipolar leader of the Indo-Pacific”^[6]. In terms of state relations between and within our region, this change should not be reduced to the simple binary of China or the United States. The strategic consequences of competition between those two powers cannot be ignored, and predicting the outcome is difficult. It is to be hoped, however, that international governance would be directed to the common good.

As Australia’s Foreign Minister the Senator the Honourable Penny Wong noted in April 2023: Australia’s hopes for the Indo-Pacific are for a

region that is open, stable and prosperous. A predictable region, operating by agreed rules, standards and laws. Where no country dominates, and no country is dominated. A region where sovereignty is respected, and all countries benefit from a strategic equilibrium.^[7]

The impetus towards a transformation of Australia’s strategic defence aims and the means by which to implement it—broadly encapsulated by the shift from a “balanced” Defence Force capable of responding to a generalised range of contingencies, to an “integrated, focused” one’^[8]—might be seen, then, as reflection of, and direct response to, a growing awareness of the essential intertwining of our national interest—economic, diplomatic, and strategic—with a stable and prosperous Indo-Pacific.

The challenges to maintaining this ideal strategic equilibrium are, however, many.

The 2023 Defence Strategic Review, identifies the challenges as including: strategic competition between China and the US; acceleration and expansion of military capabilities into the Indo-Pacific; the increased use of coercive tactics; the rapid translation of emerging and disruptive technologies into military capability, including grey zone activities; and the potential for nuclear weapons proliferation.^[9]

The Review also noted the inclusion of state and non-state actors into the region, lacking transparency and thereby increasing the risk of miscalculation or misjudgement.

When climate change and the aftermath of the pandemic are added to the mix, the complexity of these challenges are amplified.

This gives ample insight into both the rationale underpinning the transformational intent of last year’s National Defence Strategy, Defence Industry Development Strategy, and Integrated Investment Plan, as well, importantly, the urgency of its implementation.

In short, our defence posture and the capabilities underpinning it must be able to project force at distance, deterring, impeding, and responding to attempts to destabilise the Indo-Pacific, whilst actively promoting the security and prosperity of our regional partners. As the 2024 National Defence Strategy stated: “The defence of Australia lies in the collective security of the Indo-Pacific.”^[10]

It continued

[T]he Australian Defence Force (ADF) must have the capacity to: defend Australia and our immediate region; deter through denial any adversary’s attempt to project power against Australia through our northern approaches; protect Australia’s economic connection to the region and the world; contribute with our partners to the collective security of the Indo-Pacific; and contribute with our partners to the maintenance of the global rules-based order.^[11]

For a country with a small population relative to others in our region, for instance Korea, Japan, and Indonesia, this is seemingly a tall order. The Government’s response has been to reprioritise Defence’s capabilities, including:

Investing in conventionally-armed, nuclear-powered submarines through the AUKUS partnership; developing the ADF’s ability to precisely strike targets at longer range and manufacture munitions in Australia; […]; [and] lifting our capacity to rapidly translate disruptive new technologies into ADF capability, in close partnership with Australian industry.^[12]

To expedite this suite of enhanced capabilities, this year’s Federal Budget committed to a more than $50 billion increase in ADF funding over the next decade.^[13] As noted by the Ministers for Defence and Defence Industry, Richard Marles and Pat Conroy, as “almost 80 percent of Defence’s annual budget is spent in Australia”, this is a substantial investment not only into the ADF, but also the local defence industry, local jobs, and local economic opportunities.^[14]

In terms of Gross Value Added (GVA), in the financial year 2023-24, the Australian defence industry contributed $11.9 billion to the Australian economy; of this, the New South Wales component, at around $3.5 billion was the largest State and Territory input.^[15]

This is understandable. NSW is Australia’s largest State economy, gateway to global trade and investment, and home to the highest-performing innovation ecosystem in Australia and New Zealand.^[16]

40% of Australia’s defence and aerospace industry operates from NSW; our State is home to over 80 defence facilities, including 21 defence bases and training areas; a quarter of Australia’s military and defence civilian personnel reside here; and NSW has the largest direct defence industry workforce in our nation.^[17]

Looking forward, NSW has advanced capabilities in maritime autonomous systems, space tech, guided weapons, quantum, AI, cyber, and undersea defence systems, and the economic resilience to scale up these industries in support, for instance, of AUKUS Pillar II initiatives.

Our skilled population is anchored by world-leading universities and research organisations to ensure NSW remains at the forefront of research and development, fuelling not only innovation, but also its transition to implementation and insertion into supply chains.

The NSW Government’s March 2025 NSW Industry Policy, highlights local manufacturing—particularly in regional areas such as the Hunter—as one of its key priority areas,^[18] and in May’s NSW Trade and Investment Strategy 2035, emphasised defence and aerospace as one of our State’s core capability sectors.^[19]

The Federal Government’s “generational investment” is thus an opportunity not only to leverage current strengths in our State’s research, manufacturing, and investment base, but also to build upon these, as well as identifying, encouraging, and growing new ones.

There is the potential then, from a NSW perspective, for a vital two-fold impact. Firstly, the provision of a sustained and growing contribution to the existentially vital requirement of a capable and fit-for-purpose ADF that is integrated with, and supported by, a resilient, adaptive, and innovative local defence industry. Secondly, through those efforts, a parallel contribution to bolstering and expanding the local economies within which that defence industry functions.

In other words, a thriving defence industry network in NSW is both a necessary underpinning of any comprehensive national defence strategy, but also a vital contributor to our State’s economic prosperity.

Where the rubber hits the road, of course, is building, nurturing, and connecting those defence industry ecosystems in the first place; in identifying points of collaboration between Defence Primes and local SMEs, along the entire spectrum of the defence force supply chain, from innovation to manufacturing, to maintenance, to support, and to training. 

Hence the importance of occasions such as the Hunter Defence Conference 2025, which brings together just such people, as well as senior ADF representatives.

This is an empowering opportunity that I know all in this room are keen to embrace.

Thank you.

[1] Australian Government, National Defence: Defence Strategic Review 2023, April 2023; available here

[2] Defence Strategic Review 2023, op. cit., pp. 27-28

[3] Defence Strategic Review 2023, op. cit., p. 28

[4] Australian Government, 2024 National Defence Strategy, April 2024, available here

[5] Defence Strategic Review 2023, op. cit., pp.19-20; 2024 National Defence Strategy, op. cit., pp.5-7.

[6] Defence Strategic Review 2023, op. cit., pp. 17, 23

[7] Senator the Hon Penny Wong, ‘National Press Club Address: Australian Interests in a Regional Balance of Power’, 17 April 2023; available here

[8] 2024 National Defence Strategy, op. cit., p.7

[9] National Defence Strategic Review 2023, op. cit., p.28. In many regards, these echo, reaffirm, and expand upon challenges noted in the 2020 Defence Strategic Update: Australian Government, 2020 Defence Strategic Update, July 2020, available here, pp.11-15.

[10] 2024 National Defence Strategy, op. cit., p.6.

[11] ibid

[12] 2024 National Defence Strategy, op. cit., p.7.

[13] The Hon. Richard Marles MP and the Hon. Pat Conroy MP, ‘Albanese Government Grows and Accelerates Defence Spending’, media release, 25 March 2025, available here

[14] The Hon. Richard Marles MP and the Hon. Pat Conroy MP, ‘Albanese Government Grows and Accelerates Defence Spending’, media release, 25 March 2025, available here

[15] ‘Australian Defence Industry Account, Experimental Estimates [2023-24 Financial Year]’, 16 April 2025, Australian Bureau of Statistics website, available here. The NSW contribution was around $1up from the 2022-23 figures: ‘Australian Defence Industry Account, Experimental Estimates [2022-23 Financial Year]’, 27 March 2024, Australian Bureau of Statistics website, available here

[16] NSW Trade and Investment Strategy 2035, May 2025, available here, p.6

[17] ‘Defence Industry’, NSW Government Investment NSW website, available here

[18] NSW Government, NSW Industry Policy, March 2025, available here, p.14

[19] NSW Trade and Investment Strategy 2035, May 2025, available here, p.37