Australia will spend A$89 billion ($64.9 billion) on ships and submarines for its navy over the next 20 years, Prime Minister Tony Abbott said on Tuesday, A$40 billion of which has been earmarked to build surface ships domestically.
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The government is looking at new frigates to replace the Anzac frigates, which were built at Williamstown by Transfield with some hull modules from Forgacs.
It is now believed the Government’s announcement on an earlier surface ship build is being made to deflect ongoing criticism about the far more lucrative submarine project.
Mr Abbott said the countries in line for the contract – Germany, France and Japan – had been asked to submit options for a local build, a hybrid build and construction entirely offshore.
“Well we hope the announcement isn’t just a one-ship project in isolation”, he said.
A report commissioned by the government from the Rand Corporation found that the domestic industry could turn out one warship every 18months to two years, although at a 20per cent to 40per cent premium on worldwide prices.
In that time, shipbuilders have no choice but to lay off hundreds of skilled workers, as is now happening in Adelaide, Melbourne and Newcastle.
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.
South Australian Labor Premier Jay Weatherill said South Australia had been overlooked by the Federal government for too long.
But he did not confirm how many jobs would flow to South Australia, saying the state’s submarine builders would still be subject to a contentious “competitive evaluation processs”.
“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.
I’m confident the prime minister understands the imperatives.
Federal Opposition leader Bill Shorten at BAE systems shipyard on Tuesday.
“Mr Abbott views these multi-billion dollar, multi-thousand job contracts as political prizes aimed at just saving his own job”, he told reporters outside Victorian-based shipbuilder BAE Systems on Tuesday.
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The program is a vote of confidence in the military shipbuilding industry, after Defence Minister Kevin Andrews said in March it needs to cut costs and become more productive to win contracts. Mr Abbott has promised 500 extra jobs in Adelaide will result from the submarine project no matter where the submarines are built.
