Philip Smart | Adelaide
The Abbott Government is considering a continuous shipbuilding strategy, but says industry would need to restructure and become more productive for such a plan to be feasible.
“The industry currently isn’t internationally competitive in terms of its productivity, and if this does not change it will not be sustainable,” said Defence Minister Kevin Andrews in his address to the Australian Strategic Policy Institute’s “Australia’s Future Surface Fleet” conference in Canberra on Tuesday.
“Australian taxpayers currently pay a price premium of at least 30-40 per cent greater than US benchmarks to build naval ships in Australia, and even greater against some other naval ship building nations.
That price premium is simply too high to make good economic sense.
As it currently stands, it is too high to enable a continuous build strategy to be adopted.”
Minister Andrews recognised that Australia’s shipbuilding industry was a vital part of the nation’s skill base, and that the current stop-start process was expensive, provided no long term certainty to workers and didn’t enable industry to make the necessary investments in skills, people and infrastructure.
“The Government will make further announcements in the forthcoming Defence White Paper and accompanying Naval Shipbuilding Plan,” he said.
“This will include more detail on the commencement of ship construction, the rate the warships will be constructed, and the structure of the naval ship building industry that will be required to support this program.”