The “continuous shipbuilding” proposal, which involves the replacement of frigates, patrol boats and submarines over two decades, is expected by the government to keep up to 2,500 jobs in the sector in what Prime Minister Tony Abbott said was “a very historic announcement”.
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The submarine bid, one of the most lucrative defense contracts in the world, will be considered separately.
The federal government is bringing forward two major warship projects, saving around 1000 shipbuilding jobs and shoring up its electoral prospects in South Australia.
Opposition Leader Bill Shorten said there was no question both the warships and the submarines should be built in Australia.
But chief executive Chris Burns said uncertainty still remained over whether future submarines would be built in Australian shipyards. The details of the program will be announced later Tuesday, he said.
The Government’s backtracking on its pre-election promise to build the submarines in Adelaide has contributed to a decline in the polls for its SA federal members, including Education Minister Christopher Pyne. Germany’s ThyssenKrupp (TKMS), France’s state-controlled naval contractor DCNS and a Japanese government consortium of Mitsubishi Heavy Industries and Kawasaki Heavy Industries are bidding for that contract.
When pressed on the government’s lagging approval ratings in South Australia, Mr Abbott said “I am trying to focus on the actual decision rather than get dragged down into sort of day-to-day political considerations”.
“One way or another, the subs will be coming as a further prize”.
But the news won’t stop the so called “valley of death” faced by local shipbuilders – a gap of work between existing contracts and the start of new ones.
Abbott announced the deal in the state capital, Adelaide.
“We’ve been putting a lot of effort into explaining to the Commonwealth the size of the challenge the urgency of the challenge and the fact that up to this point we haven’t been receiving the attention of the national government”, he said.
The Prime Minister said construction of the corvettes from 2018 and frigates from 2020 would secure 2500 jobs, largely in Adelaide.
Mr Abbott said the government couldn’t save all those jobs.
Abbott is also aware his government needs to appease South Australian voters anxious the manufacturing industry in the state – which has the nation’s highest unemployment rate – is worsening.
The total cost was expected to reach about A$40 billion, Mr Abbott said.
“I do fear that Tony Abbott is far more concerned about Christopher Pyne’s job than the jobs of hundreds of Victorian shipbuilders and that is a disgrace”, Mr Andrews said.
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Engineers Australia vice-president Greg Walters said it was critical the government managed this investment wisely.
