Prime Minister Tony Abbott wants to see Australian naval shipbuilding sustainable for the long-term with continuous construction of new warships.
That was music to the ears of Victorian Premier Daniel Andrews who said shipbuilders at the BAE Systems yard in Williamstown would be very pleased.
That’s because the company will run out of navy work with completion of the landing ship project later in 2015.
Mr Andrews and South Australian premier Jay Weatherill, both confronting the end of car manufacturing in their states, went to the Council of Australian Governments meeting in Canberra on Friday urging the commonwealth to hand fresh work to their defence companies.
A COAG communique after the meeting specifically mentions the defence industry and the contribution a continuous naval build strategy could make to the economy and jobs.
Mr Abbott said the government would make announcements on the topic in the next few weeks.
“But obviously what we want to do is to put naval ship building in this country on a sustainable long-term basis,” he told the post-COAG media conference.
Mr Abbott said the problem with naval shipbuilding was it had been a stop-start process.
Without ongoing work “it’s stop-start, it’s live-die” and that was no good.
“So in conjunction with sensible decisions about the size of our surface fleet, we want to see a steady continuous build of naval warships in Australia,” he said.
Australian-made equipment still needed to be world-class at a reasonable price, Mr Abbott said.
“Within those parameters of course we want to maximise Australian production,” he said.
The prime minister’s comments came a day after release of a major study which found local shipbuilding was expensive by world standards.
But it could be cost-effective through a process of continuous construction of warships, turning out a new vessel every 18-24 months.
Australia will need some 50 new warships and submarines over the next two decades.
A continuous build strategy would most likely apply to 8-10 next-generation frigates which will replace ageing Anzac class vessels from around 2026.
Mr Andrews said with a long-term order book, the Australian defence industry could deliver the best outcome possible.
“What the PM has just said and what is in the communique today is really a big step forward ,” he said.