The Australian Industry Group and unions have called for certainty on where Australia’s new submarines will be built, after reports that the federal government was likely to break its pre-election promise to build submarines in South Australia.
The Australian Financial Review reports today that prime minister Tony Abbott had “all but confirmed” Australia would choose Japan to provide Soryu class submarines.
Ten of these vessels would be about $20 billion, around half the cost design and build the submarines in SA.
The Australian cites sources in Defence claiming the cost of building locally would actually be between $50 and $80 billion, with doubts that these could be made in time to replace the Collins class fleet when it is decommissioned.
This morning the Australian Industry Group’s Innes Willox told ABC Radio that the uncertainty needed to end, and businesses had made investment decisions based on the expectation the submarines would be built by the ASC in SA.
"Companies have acted in good faith here and there's been a long held belief and signals from governments of both sides that submarines would be built in Australia," said Willox.
According to the AMWU’s Paul Bastian, there would be thousands of shipbuilding jobs at risk with off-the-shelf subs being imported.
Industry minister Ian Macfarlane said SA was still “in the mix” and denied a decision had been made ahead of the release of the Defence White Paper by June 2015.
“We want to make sure we have the best value for money and the best submarines available based on the best advice from the defence department,” he told The ABC.
“We will go through that process, and South Australia is still in the mix.”
Abbott has said that any decision would be made on the basis of value for money.
“As I’ve stressed all along, we should make decisions here based on defence requirements, not on the basis of industry policy or on the basis of regional policy,” he said yesterday at a doorstop interview.
The AFR also reports that Macfarlane will address the Sydney Institute today on the “third wave” of the country’s economy, with local companies needing to be globally competitive or be let to fail.
“Australia has two choices: we can continue to meander along with a business-as-usual approach, condemning ourselves to mediocrity and a decreasing share of global markets as we become increasingly less competitive in traditional manufacturing sectors where we are outpriced by our competitors with lower wages and lower standards of living,” he will say.