The manufacturing industry, particularly in Victoria and South Australia, has a lot riding on the government's $10 billion plan to purchase 1100 new, locally-built, armoured vehicles.
Given the budget pressures, the number of vehicles could be cut to around 700 and a reduction of $2 billion, according to a report in The Australian Financial Review.
This is budget season and major defence projects are under scrutiny. The most expensive is the $36 billion for 12 new locally-built submarines followed by $16 billion for 100 F-35 joint strike fighters.
In a submission to the Federal Government, Victoria's state government says it could transform its economy by chasing $27 billion worth of defence contracts over the next decade. Geelong is being positioned as a suitable location to manufacture and maintain military vehicles.
Submarine Institute of Australia’s vice-president communications, Frank Owen believes Australia has world-class submarine building capabilities. There are hopes the Federal Government will commit to the Future Submarine project and assemble the 12 new submarines in Adelaide.
Australian Strategic Policy Institute capability analyst Andrew Davies said of all the big defence projects, the armoured vehicle project is “the one most in the firing line’’.
“The others, the joint strike fighter and the new submarine are big showy platforms,’’ Dr Davies was quoted in The AFR.
“The armoured vehicle project is easily scaleable... I mean you could order just 500 vehicles in the first instance see how they go and order the rest years down the track,’’ Dr Davies said.