South Australian minister warns of local content deficiency in naval shipbuilding

The SEA 5000 Future Frigates are set to replace the Australian Navy's Anzac-class frigates. Photo: Royal Australian Navy

South Australian Minister for Defence Industries Martin Hamilton-Smith has warned the Australian government about naval shipbuilding jobs and investment being at risk if the Federal Government does not deliver the promised 90 per cent level of local industry content.

According to the minister, concerns are emerging that local benefits are at risk of slipping away in all states.

Stakeholders are expecting an announcement within this week of the Australian government’s naval shipbuilding plan and a request for tender (RFT) for the nine-ship, $30 billion frigate program.

“Unless these documents lock in the 90 per cent level of local industry content promised by the Federal Government, industry, unions and state governments have good cause for alarm,” Hamilton-Smith said.

During the 2016 Federal election campaign the Federal Government and DCNS gave repeated assurances that at least 90 per cent of all of the work would be done in Australia. Since then Defence Minister Payne and Defence Industries Minister Pyne have refused to repeat the promise.

In May 2016 Federal Defence Industry Minister Christopher Pyne said less than a tenth of the work on Australia’s 12 new submarines would be done outside the nation.

Pyne was quoted on ABC TV on Monday, May 16 saying, “DCNS has admitted that probably less than 10 per cent of the work will be done outside of Australia’’.

But on October 18, 2016 during a Federal Defence Estimates hearing in Canberra, Defence Minister Marise Payne and Department chief Dennis Richardson said they could not guarantee how much of the work will actually be done here, despite Mr Pyne’s election vow talking up the 90 per cent commitment.

“Over the past 18 months ASC has shed 1005 jobs as the second AWD was put in the water and program scaled back,” Hamilton further said.

“The South Australian Government wants an assurance from the Commonwealth that the contracts signed so far with DCNS have adhered to the 90 per cent Australian industry content promised by both DCNS and the Commonwealth Government.”

The minister added that the government wants a confirmation of the number of companies DCNS has pre-qualified or identified as reliable partners in the submarine project and a statement about expectations of frigate designers in the RFT to be announced shortly.

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