Australia’s future submarines and frigates must be built by Australian-owned builder, Defence Industry Minister says

ASC upgrades ‘virtual shipyard’ for current and future submarine work. Image credit:

South Australian Defence Industries Minister Hamilton-Smith has once again reiterated that the $89 billion 12-submarine and nine-frigate program must be built by an Australian-owned builder.

In an address to State Parliament on Tuesday, the Minister said that ‘indications coming from Canberra’ were that the French Government-owned Naval Group (formerly DCNS) – which had been chosen as the architect and designer of the new submarine – will now be selected as the builder.

“The Federal Government needs to provide clarity on the fundamental principle of whether contracts will specify that an Australian company will have prime carriage of building the submarines and frigates in partnership with the designer,” Mr Hamilton-Smith said.

“If we are to build a genuine sovereign naval shipbuilding capability, then an Australian company should own at least 51 per cent of the ship builder carrying out the work. How will we guarantee that Australian subcontractors and workers will be given a high level work in the supply chains if the ship builder is not Australian owned?”

The Minister also raised concerns that that the successful frigate architect/designer (Fincantieri, BAE or Navantia) will be asked to build the frigates, cutting the ASC and companies like Austal out of the deal.

He said industry and unions were worried about foreign, government-owned multi-national defence companies being given exclusive rights to build the country’s submarines and ships, at the expense of Australian companies and Australian workers.

“What will happen at the end of this particular build if we want to choose another design for the next submarine or frigate run? How will be evolve our own intellectual property and national capability if foreign government-owned multi-nationals control both the design and build?” Mr Hamilton-Smith continued.

“These are questions the Federal Government must answer.”

The Minister also advised that the SA Government was considering coordinating ‘a national campaign’ with other state governments, industry associations, unions and members of the Australian Parliament to ensure that the submarine and shipbuilding enterprises are majority Australian-owned.

“As our national intent is to lock in a continuous on-going build of submarines and frigates, it is important that we set out on the shipbuilding journey with ship and submarine building companies that are Australian-owned, with Australian citizens ultimately doing the work, with assistance from the selected designers,” Mr Hamilton-Smith added.

“Decisions made in the next 12 to 18 months will affect Australia’s ship building capabilities for decades to come. The Federal Government needs to be more consultative with state governments, the defence industry and with defence workers and unions about future plans.”

The $35 billion Future Frigate program, which is due to commence in Adelaide in 2020, is expected to generate approximately 2000 direct jobs.

Construction of the $50 billion Future Submarines project will commence in 2022 and is expected to create 2900 direct jobs in SA, with 1700 jobs in shipbuilding, 100 jobs at DCNS office, 600 jobs in supply chain and 500 jobs in combat system integration.

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