"Defence and defence industry will continue to be targeted by a range of cyber actors, including foreign intelligence services, issue-motivated groups, criminal syndicates and individual hackers.

"We collectively have a responsibility to work together to improve our systems, to ensure sensitive, commercial and other information is protected, and when things go wrong – whether they are self-inflicted or the work of actors – we need to work together to achieve an agile response, appropriate remediation and a common approach to communication."

The vulnerability of defence companies was highlighted last year when it was revealed that a defence subcontractor was hacked and 30 gigabytes of secret data about warships and aircraft was stolen.

High-value target

Australian Strategic Policy Institute cyber security expert Fergus Hanson said Australia was a high-value target in part because of its membership of the Five Eyes intelligence partnership, which gave the ADF access to top-end American and British technology.

Australian Strategic Policy Institute cyber security expert Fergus Hanson said Australia was a high-value target in part because of its membership of the Five Eyes intelligence partnership, which gave the ADF access to top-end American and British technology. Paul Lovelace

He said the government's tendency to outsource and break up defence contracts to many smaller companies was a vulnerability that could be exploited, with SMEs the weak link in cyber security.

"The strategy that China takes is a jigsaw model where they gather up all the scattered pieces and put them together," he said.


While Mr Moriarty did not single out China, he indicated concern about a regional arms build-up.

"Maintaining regional superiority has been a comfortable assumption of defence planning in previous decades but it is being eroded by investments being made in capability in our region," he said.

'It will impact on us'

"In a more prosperous Indo-Pacific region, this is to a certain extent inevitable. As countries in the region become more prosperous, it is sensible and logical in some ways that they invest in their own defence capabilities but it will impact on us and it will challenge our thinking."

Mr Moriarty said government resources were finite and industry had to be mindful of other priorities, notably the commitment to deliver a budget surplus in 2021.

"We have been given additional resources by government but we need to work within the profile that we've been given," he said.

"We in defence and industry are going to need to constantly evolve and drive innovation and savings if we can generate the resources that we need to maintain our competitive edge."