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| Coalition denies plan to give submarine contract to Japan | |
| (34 minutes later) | |
| Australia needs to closely examine how the cost of building new submarines in South Australia compares to giving the contract to Japan, the industry minister Ian Macfarlane has said. | Australia needs to closely examine how the cost of building new submarines in South Australia compares to giving the contract to Japan, the industry minister Ian Macfarlane has said. |
| The government appears to be backtracking from its election promise to construct 12 vessels in South Australia at a cost of about $40bn. | The government appears to be backtracking from its election promise to construct 12 vessels in South Australia at a cost of about $40bn. |
| But the cost of building the vessels in Japan would be about half of that. | But the cost of building the vessels in Japan would be about half of that. |
| “Well we haven’t made a decision yet on where the submarines will be built, but we want to make sure we have the best value for money and the best submarines available based on the best advice from the defence department,” MacFarlane told the ABC’s Radio National program on Tuesday morning. | “Well we haven’t made a decision yet on where the submarines will be built, but we want to make sure we have the best value for money and the best submarines available based on the best advice from the defence department,” MacFarlane told the ABC’s Radio National program on Tuesday morning. |
| “We will go through that process, and South Australia is still in the mix.” | “We will go through that process, and South Australia is still in the mix.” |
| He would not say when a decision would be made, but it will be announced in the defence white paper to be released by next June. | |
| Ahead of the 2013 federal election, defence minister David Johnston, then the shadow minister, promised on a visit to defence contractor ASC in Adelaide that the new submarines would be built “right here in South Australia”. | |
| But Labor leader Bill Shorten said giving the contract to Japan would be another “kick in the guts” for South Australia after the decision by carmaker Holden to stop production in Adelaide later this decade. | |
| Shorten, who will visit ASC headquarters in Adelaide on Tuesday, also warned that such a decision would “put our national security at risk as a maritime nation”. | |
| The government has indicated any Australian modifications of the Soryu subs - including installation of the computer combat system and ongoing maintenance - will be carried out in Adelaide. | |
| The Australian Industry Group says local supply chain companies will be looking for guidance from the government as soon as possible. | |
| “There’s been long-held belief and signals from governments of both sides that submarines would be built in Australia,” chief executive Innes Willox told ABC Radio. | |
| The Australian Manufacturing Workers Union has warned that thousands of jobs will be at risk if the contract goes offshore. | |
| The speculation over where the submarines will be built has concerned manufacturers and unions. | The speculation over where the submarines will be built has concerned manufacturers and unions. |
| The Australian Industry Group chief executive, Innes Willox, said local supply chain companies had made investment decisions on expectations the submarines would be built in Adelaide and needed clarity. | The Australian Industry Group chief executive, Innes Willox, said local supply chain companies had made investment decisions on expectations the submarines would be built in Adelaide and needed clarity. |
| “Companies have acted in good faith here and there’s been a long held belief and signals from governments of both sides that submarines would be built in Australia,” he told ABC Radio on Tuesday. | “Companies have acted in good faith here and there’s been a long held belief and signals from governments of both sides that submarines would be built in Australia,” he told ABC Radio on Tuesday. |
| “Industry would be looking for guidance as soon as possible.” | “Industry would be looking for guidance as soon as possible.” |
| Australian Manufacturing Workers Union national president Paul Bastian said building the submarines in Japan would cause a ripple effect for industry. | Australian Manufacturing Workers Union national president Paul Bastian said building the submarines in Japan would cause a ripple effect for industry. |
| “I think there will be thousands of jobs in the shipbuilding sector that will be put at risk,” he told ABC Radio. | “I think there will be thousands of jobs in the shipbuilding sector that will be put at risk,” he told ABC Radio. |
| Opposition assistant minister for defence, David Feeney, said giving the contract to Japan could lead to the loss of thousands of skilled jobs. | Opposition assistant minister for defence, David Feeney, said giving the contract to Japan could lead to the loss of thousands of skilled jobs. |
| “The Abbott government has already excluded Australian companies from tendering for two new Royal Australian Navy supply ships, sending that work overseas,” he said in a statement. | “The Abbott government has already excluded Australian companies from tendering for two new Royal Australian Navy supply ships, sending that work overseas,” he said in a statement. |
| “It’s time the Coalition kept its promises to South Australia and recommitted to building Australia’s future submarines in Adelaide.” | “It’s time the Coalition kept its promises to South Australia and recommitted to building Australia’s future submarines in Adelaide.” |