Warships no consolation prize: Abbott
AAP
August 4, 2015, 10:51 am
Prime Minister Tony Abbott is expected to announce an $89bn, 20-year shipbuilding program for SA.
Prime Minister Tony Abbott insists a 20-year program to build warships locally is not a consolation prize for South Australia.
A naval shipbuilding package worth $89 billion is expected to be signed-off by a federal cabinet meeting in Adelaide on Tuesday.
The full deal is expected to include $39 billion to build new frigates and offshore patrol ships in South Australia and $50 billion for the next-generation submarine fleet.
"The frigates are coming as the first prize and one way or another the subs will be coming as a further prize," Mr Abbott told ABC radio ahead of a formal announcement.
"You shouldn't assume that the subs won't happen here."
The submarine contract is subject to a competitive evaluation process being contested by Japanese, French and German shipbuilders who will be required to outline local involvement in any tenders.
Construction of the frigates will start several years early in 2020 while the construction of offshore patrol vessels, or corvettes, will be brought forward to 2018.
The prime minister conceded Australian shipbuilders would not be able to avoid entirely the so-called "valley of death" - the gap between the end of existing contracts and the start of new ones - with jobs in the sector likely to halve from 2000 to 1000 over the next few years.
But it should rebuild to about 2500 ongoing positions by 2020.
"This is the best possible outcome for service shipbuilding in Australia," Mr Abbott said.
Independent SA senator Nick Xenophon conceded it was better to have the warships built in his state than not, but he was still critical of the announcement.
"You need critical mass in the industry and that would also need to involve building the submarines as promised," he told ABC radio.
Opposition Leader Bill Shorten said there was no question both the warships and the submarines should be built in Australia.
"Mr Abbott views these multi-billion dollar, multi-thousand job contracts as political prizes aimed at just saving his own job," he told reporters outside Victorian-based shipbuilder BAE Systems on Tuesday.
Meanwhile the Victorian government says Melbourne's big ship builder faces more job losses unless the federal government includes it in its $89 billion warship building program.
Victorian Manufacturing Minister Lily D'Ambrosio says BAE Systems in Williamstown has already lost 400 jobs since October last year and its future was at risk without urgent federal government orders.
AAP
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