Oz warships should be built locally

Australia’s warships should be built locally even if it costs more, a Senate committee has recommended. In its report on Australia’s naval shipbuilding sector, the Senate foreign affairs defence and trade committee acknowledged that building locally may come at a cost premium. But it said paying that premium was consistent with overseas practice and should be regarded as an investment in enhancing the shipbuilding industry, safeguarding national security and boosting the economy.

The committee concluded that it was in Australia’s interest to maintain a viable naval ship construction and repair industry. “This requires a commitment by the government to have Australia’s naval vessels constructed in Australia and for the government and defence to adopt measures that would ensure the industry remains efficient, innovative and competitive,” it said.

However just how much extra could be paid for locally-constructed vessels is unclear.

The committee said it had repeatedly sought data from defence on price premiums from local construction but no information was forthcoming. “The committee was therefore unable to determine the relative cost advantages or disadvantages of local construction,” it said. If such work had not been done, it should be, they said.

The committee said Australia had a proven shipbuilding capability, as demonstrated by successful projects to construct 10 Anzac frigates (Tenix), six Collins submarines (ASC), six Huon class minehunters (ADI, now Thales) and 12 Armidale class patrol boats (Austal). Two major projects are now under consideration – three advanced air warfare destroyers costing up to $6 billion and two 27,000 tonne displacement amphibious landing ships costing $2 billion. Both will be foreign designs.