ISSN: 1836-1838
Date presented to Minister: 27 September 2024

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To:

Hon Stephen Mullighan MP
Treasurer
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:

Matt Opie
Chief Executive

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From the Chief Executive

I am honoured to introduce the 2023-24 Annual Report for Defence SA, having commenced my role as Chief Executive in April 2024. My focus remains steadfast in continuing the exceptional work of our department, ensuring we meet and exceed our strategic objectives.

We are on the brink of a once-in-a-generation opportunity with AUKUS. This tri-lateral security partnership, along with numerous other opportunities identified in the Defence Strategic Review, National Defence Strategy and Integrated Investment Program, positions South Australia at the forefront of global defence innovation.

Our work at Defence SA is aligned with the South Australian Economic Statement, particularly in areas such as advanced manufacturing, technology, and workforce development.

Over the past year, we have engaged with industry to maximise their participation in global supply chains for key defence projects, particularly under AUKUS priority areas. There are already many examples of local defence companies successfully joining the global supply chain, especially with partners in the US and UK.

Beyond shipbuilding, we are exploring opportunities in the land and air domains, cyber, space, information warfare, and artificial intelligence.

We continue to work closely with other state government agencies in AUKUS, workforce development and trade and investment with the common aim of developing the defence and space sectors in South Australia.

Workforce development remains both a challenge and an opportunity for our state and our industry. Defence SA’s commitment to workforce development is evident through our support of the Defence Industry Workforce and Skills Report and Action Plan and its 22 targeted initiatives aimed at bolstering the state’s defence industry workforce capabilities.

A highlight this year was our record attendance at the Indo Pacific International Maritime Exposition, with over 80 South Australian companies showcasing their capabilities. Additionally, we made substantial progress on the 737 Deep Maintenance and Modification Facility (DMMF) at RAAF Base Edinburgh, with construction commencing in August 2024.

In research and development, the Defence Innovation Partnership funded Round 7 of the Collaborative Research Fund (CRF) and awarded $1.6 million under the new Activator Fund.

The South Australian Space Industry Centre continued to support the development of sovereign space capability and the growth of our space ecosystem and supported South Australian space innovation via the South Australian Space Collaboration and Innovation Fund.

A standout achievement is the launch of Kanyini, a $6.5 million wholly state-built and owned satellite. We eagerly anticipate the data it will provide for various projects in the coming year.

As we look ahead, we will be releasing an updated defence and space strategy, which will detail our priorities across land, sea, air, space and advanced systems in greater depth.

We have continued to support our veteran community via the many programs offered by Veterans SA.

I am confident that Defence SA will continue to drive innovation and excellence in the defence and space sectors, contributing significantly to South Australia’s economic growth and national security.

Matt Opie
Chief Executive
Defence SA

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Contents

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

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Overview: about the agency

Our strategic focus

Purpose:

Defence SA is South Australia’s lead government agency for all defence related matters and is the single point of contact for defence stakeholders, streamlining their interaction across the South Australian Government. The agency captures valuable investment opportunities in the naval, land and air domains as well as defence science and research, cyber, information warfare and space.

The Defence SA Advisory Board provides strategic advice to promote the growth of defence industry in South Australia and plays a key role in guiding the state’s defence strategy.

Defence SA includes 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 Veterans’ 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 delivers innovative solutions to Defence by creating connections between researchers, industry and Defence; building and supporting defence-relevant research 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 and growth.

Vision:

Mission/Values:

Our functions, objectives and deliverables:

Our organisational structure

Changes to the agency

During 2023-24 the only change to the agency’s structure and objectives as a result of internal review was that the government relations function moved into the Marketing, Events and Communications portfolio. There were no machinery of government changes.

The previous Chief Executive, Richard Price completed his tenure in December 2023. After an international recruitment process, the new Chief Executive, Matt Opie commenced in April 2024.

Our Minister

The Hon Stephen Mullighan MP is the Treasurer and Minister for Defence and Space Industries.

The Minister oversees:

• Defence Industry Development
• Defence Innovation Partnership
• South Australian Space Industry Centre

Our Executive team

As at 30 June 2024, Defence SA’s Executive team comprised:

• Matt Opie, Chief Executive: Defence SA, South Australian Space Industry Centre and Veterans SAMatt is responsible for providing executive and strategic leadership to Defence SA, the South Australian Space Industry Centre, the Defence Innovation Partnership and Veterans SA. The Chief Executive is responsible for the attraction, development and growth of sustainable industry business initiatives to establish a long-term viable Defence presence and promote defence and space industries in South Australia.

• Reg Carruthers, Executive Director, Defence and Space (departed agency 26 July 2024)
  Reg was responsible for initiatives to support and grow the defence and space industries in South Australia.

• Sumen Rai, Director Defence Innovation Partnership
  Sumen is responsible for leading the Defence Innovation Partnership team, which builds and supports collaborative defence-relevant research and development in South Australia.

• Jessica Hernandez, Director Marketing and Communications
  Jessica is responsible for the oversight and management of all marketing and communications activities for Defence SA, including events and tradeshows, media and government relations.

• Ilona Horan, Director Corporate Services and Director Land
  Ilona oversees the agency’s entire corporate services functions, including the management of human resources, WHS, procurement and contracting, while also supporting the land (or Army) industry sector initiatives within South Australia.

• Peter Murdock, Director, Finance and Systems
  Peter is responsible for overseeing the agency’s financial resources, including budget planning, finance management and legislative reporting and the agency’s cyber security program.

The Defence SA Executive Team also includes Director, Veterans SA who reports via the CE to the Minster for Veterans’ Affairs.

Legislation administered by the agency

Defence SA does not administer any legislation.

Other related agencies (within the Minister’s area/s of responsibility)

Department of Treasury and Finance.

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The agency’s performance

Performance at a glance

Defence SA’s achievements and performance are best measured by the health of the defence and space sectors in South Australia and the brand of ‘Defence SA’ in South Australia, Australia and internationally.

Agency specific objectives and performance

The defence and space industries are a key contributor to South Australia’s economic prosperity.

AUKUS

• Worked closely with the Office for AUKUS, other South Australian Government agencies, Australian Submarine Agency and Department of Defence to support delivery of South Australia’s contribution to the AUKUS partnership.
• Developed AUKUS Pillar I industry strategies for the nuclear-powered submarine program.
• Directly supported South Australian defence industry entry into the supply chain for Virginia class submarines through targeted engagement with key US primes.
• Developed further opportunities for South Australia following the release of the Defence Strategic Review and across AUKUS Pillar II.

Defence and Industry

• Developed opportunities for South Australian industry on the Hunter class frigate program, Collins class life-of-type extension and Hobart class destroyer upgrades.
• Facilitated the establishment of the Royal Australian Air Force (RAAF) 737 Aircraft Deep Maintenance and Modification Facility adjacent RAAF Base Edinburgh with an agreement signed between the South Australian Government and Department of Defence.
• Supported the establishment of land domain companies in South Australia in support of the Guided Weapons and Explosive Ordnance Enterprise.
• Increased industry participation in, and attendance at, international tradeshows and domestic defence events that support South Australian defence and space industry and research collaboration opportunities.

Workforce and Skills

• Supported the completion of the South Australian Defence Industry Workforce and Skills Report and Action Plan.
• Supported 37 students to undertake their defence industry placements under the South Australian Defence Industry Scholarship Program, with 16 South Australian defence industry companies registered to accept placements.
• Maintained full occupancy of the Defence and Space Landing Pad at Lot Fourteen comprising emerging South Australian companies, and those planning to establish a larger presence in the state.

Research, Development and Innovation

• Launched the $4.8 million Activator Fund to support larger-scale research and development activity and capability in South Australia, in close collaboration with the Department of Defence to align with defence innovation, science and technology priorities.
• Awarded $1.6 million from the Activator Fund to South Australian company Acacia Systems to undertake a collaborative project with industry, university and Defence partners, Enhancing the Royal Australian Navy’s Undersea Surveillance Minimum Viable Capability.
• Funded six new Collaborative Research Fund projects under round seven, leveraging $1.65 million in contributions from universities, industry and the Department of Defence.

Space

• Successfully progressed South Australia’s state satellite, Kanyini through testing with launch occurring in mid-2024.
• Progressed plans for the $20 million Space Assembly Integration and Test Facility at Lot Fourteen.
• Supported the successful establishment of the $90 million Australian Research Council Centre of Excellence in Plants for Space at the University of Adelaide.
• Created a new industry focused grant fund, the Space Collaboration and Innovation Fund to grow local space capability through international collaboration.
• Supported the development of a workforce talent pipeline across defence, cyber and space through university initiatives including new educational offerings, hackathons and the Australian Rover Challenge.
• Increased rural, regional and public engagement in STEM through support of the Andy Thomas Space Foundation and Hamilton Secondary College Space Academy and planetarium.
• Funded the 2023 and 2024 Venture Catalyst Space Program, a globally recognised program dedicated to supporting startup founders to develop innovative, disruptive businesses in the international space sector.

Stakeholder Engagement 

• Supported industry organisations such as the Defence Teaming Centre and the Andy Thomas Space Foundation who in turn support development of industry and skills in their respective sectors.
• Engaged with hundreds of South Australian defence and space companies; and local, state and federal governments maintaining South Australia as The Defence State.
• Maintained strong relationships with the Royal Australian Navy, Australian Army and the Royal Australian Air Force and the Defence Science and Technology Group (DSTG) to better understand user needs and requirements to inform South Australian Defence Sector strategy development.
• Maintained strong relationships with the Australian Space Agency, the SmartSatCRC and Defence Space Command to better understand user needs and requirements to inform South Australian Space Sector strategy development.

Agency specific objectives and performance

Defence SA:

Defence Innovation Partnership:

SASIC:

Corporate performance summary

• Continued to invest in cyber security initiatives to ensure we continue to evolve and increase the department’s cyber security resilience, posture, and preparedness for new and emerging cyber security threats.
• Implemented ongoing improvements to recruitment and onboarding processes to streamline, simplify and reduce steps, improving both the candidate and hiring manager experience.
• Continued to invest in individuals through tailored development opportunities, including employees participating in leadership development programs through the SA Leadership Academy, Governor’s Leadership Program and Defence Industry Study Course.
• Ongoing engagement with State Records Council regarding streamlining of processes for Defence SA’s records disposal schedule and records management.
• Responded to all Freedom of Information (FOI) requests within the legislated timeframe.

Employment opportunity programs

Agency performance management and development systems

Work health, safety and return to work programs

*number of claimants assessed during the reporting period as having a whole person impairment of 30% or more under the Return to Work Act 2014 (Part 2 Division 5)

**before third party recovery

Data for previous years is available at: Work health and safety/return to work performance 2022-23 – Dataset – data.sa.gov.au

Executive employment in the agency

Data for previous years is available at: Executives 2022-23 – Dataset – data.sa.gov.au

The Office of the Commissioner for Public Sector Employment has a workforce information page that provides further information on the breakdown of executive gender, salary and tenure by agency.

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Financial performance

Financial performance at a glance

The following is a brief summary of the overall financial position of the agency. The information is unaudited. Full audited financial statements for 2023-24 are attached to this report.

Statement of Comprehensive Income	2023-24 Budget $000s	2023-24 Actual $000s	Variation   $000s	2022-23 Actual $000s
Total Income	$19,914	$18,614	$(1,300)	$14,799
Total Expenses	$21,744	$14,029	$7,715	$22,934
Net Result	$(1,830)	$4,585	$6,415	$(8,135)
Total Comprehensive Result	$(1,830)	$4,585	$6,415	$(8,135)

Statement of Financial Position	2023-24 Budget $000s	2023-24 Actual $000s	Variation   $000s	2022-23 Actual $000s
Current assets	$3,344	$15,332	$11,988	$9,744
Non-current assets	$2,103	$2,182	$79	$2,371
Total assets	$5,447	$17,514	$12,067	$12,115
Current liabilities	$2,103	$2,909	$(806)	$1,863
Non-current liabilities	$2,123	$2,157	$(34)	$2,389
Total liabilities	$4,226	$5,066	$(840)	$4,252
Net assets	$1,221	$12,448	$11,227	$7,863
Equity	$1,221	$12,448	$11,227	$7,863

Consultants disclosure

The following is a summary of external consultants that have been engaged by the agency, the nature of work undertaken, and the actual payments made for the work undertaken during the financial year.

Consultancies with a contract value below $10,000 each

Consultancies with a contract value above $10,000 each

Data for previous years is available at: Consultants 2022-23 – Dataset – data.sa.gov.au

See also the Consolidated Financial Report of the Department of Treasury and Finance for total value of consultancy contracts across the South Australian Public Sector.

Contractors disclosure

The following is a summary of external contractors that have been engaged by the agency, the nature of work undertaken, and the actual payments made for work undertaken during the financial year.

Contractors with a contract value below $10,000

Contractors with a contract value above $10,000 each

Data for previous years is available at: Contractors 2022-23 – Dataset – data.sa.gov.au

The details of South Australian Government-awarded contracts for goods, services, and works are displayed on the SA Tenders and Contracts website. View the agency list of contracts.

The website also provides details of across government contracts.

Risk management

Fraud detected in the agency

NB: Fraud reported includes actual and reasonably suspected incidents of fraud.

Strategies implemented to control and prevent fraud

All staff completed the SA Public Sector Code of Ethics refresher training during July 2023. Staff also undertook Fraud and Corruption Awareness training In May 2024.

Data for previous years is available at: Fraud Detection 2022-23 – Dataset – data.sa.gov.au

Public interest disclosure

Number of occasions on which public interest information has been disclosed to a responsible officer of the agency under the Public Interest Disclosure Act 2018:

Nil

Data for previous years is available at: Whistle-blower Disclosure 2022-23 – Dataset – data.sa.gov.au

Note:  Disclosure of public interest information was previously reported under the Whistleblowers Protection Act 1993 and repealed by the Public Interest Disclosure Act 2018 on 1/7/2019.

Reporting required under any other act or regulation

Reporting required under the Carers’ Recognition Act 2005

Defence SA is not required to report under the Carers’ Recognition Act 2005.

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Public complaints

Number of public complaints reported

Complaint categories	Sub-categories	Example	Number of Complaints 2022-23
Professional behaviour	Staff attitude	Failure to demonstrate values such as empathy, respect, fairness, courtesy, extra mile; cultural competency	Nil
Professional behaviour	Staff competency	Failure to action service request; poorly informed decisions; incorrect or incomplete service provided	Nil
Professional behaviour	Staff knowledge	Lack of service specific knowledge; incomplete or out-of-date knowledge	Nil
Communication	Communication quality	Inadequate, delayed or absent communication with customer	Nil
Communication	Confidentiality	Customer’s confidentiality or privacy not respected; information shared incorrectly	Nil
Service delivery	Systems/technology	System offline; inaccessible to customer; incorrect result/information provided; poor system design	Nil
Service delivery	Access to services	Service difficult to find; location poor; facilities/ environment poor standard; not accessible to customers with disabilities	Nil
Service delivery	Process	Processing error; incorrect process used; delay in processing application; process not customer responsive	Nil
Policy	Policy application	Incorrect policy interpretation; incorrect policy applied; conflicting policy advice given	Nil
Policy	Policy content	Policy content difficult to understand; policy unreasonable or disadvantages customer	Nil
Service quality	Information	Incorrect, incomplete, out-dated or inadequate information; not fit for purpose	Nil
Service quality	Access to information	Information difficult to understand, hard to find or difficult to use; not plain English	Nil
Service quality	Timeliness	Lack of staff punctuality; excessive waiting times (outside of service standard); timelines not met	Nil
Service quality	Safety	Maintenance; personal or family safety; duty of care not shown; poor security service/ premises; poor cleanliness	Nil
Service quality	Service responsiveness	Service design doesn’t meet customer needs; poor service fit with customer expectations	Nil
No case to answer	No case to answer	Third party; customer misunderstanding; redirected to another agency; insufficient information to investigate	Nil
		Total	Nil

Additional Metrics	Total
Number of positive feedback comments	Nil
Number of negative feedback comments	Nil
Total number of feedback comments	Nil
% complaints resolved within policy timeframes	N/A

Data for previous years is available at: Public Complaints 2022-23 – Dataset – data.sa.gov.au

 Service Improvements

Not applicable.

Compliance Statement

Defence SA is compliant with Premier and Cabinet Circular 039 – complaint management in the South Australian public sector	Y
Defence SA has communicated the content of PC 039 and the agency’s related complaints policies and procedures to employees.	Y