Senator: Australian Naval Shipbuilding to Enter ‘Valley of Death’ ?

Senator: Australian Naval Shipbuilding to Enter ‘Valley of Death’ ?

An urgent Senate inquiry into the future of Australia’s multi-billion dollar naval shipbuilding industry – employing over 15,000 direct jobs – started in Canberra this morning.


The hearing will focus on last month’s decision by the Government to shut out Australian ship builders – including Adelaide’s ASC – from tendering to build two Navy supply ships.

Instead, the up-to $1.5 billion project will go to either Spain or South Korea as part of a ‘restricted tender’ process.

According to the Independent Senator for South Australia, Nick Xenophon, there are fears that Australian naval shipbuilding will enter a ‘valley of death’ from next year, with thousands of job losses due to the gap between existing projects and future projects that would not commence for a number of years.

“Building the supply ships in Australia could have bridged that gap,” said Nick. “Instead there could be a wholesale collapse of naval shipbuilding in Australia, and the de-skilling of an entire industry.”

Senator Xenophon, who pushed for the urgent inquiry into the supply ship decision, said: “it seems, yet again, the bean-counters in the Department of Finance have won the day. They claim it’s ‘value for money’ to get a cheaper ship overseas, which ignores the massive local economic benefits of having jobs here and the huge multiplier effect.”

Senator Xenophon accused the Government of ignoring the “critical strategic and national interest imperatives” of having a viable naval shipbuilding industry in Australia.

The Inquiry follows the release last week of a Senate Committee report into Commonwealth Procurement practices, which was highly critical of procurement rules effectively excluding local industry in favour of cheaper imports, some of questionable quality.

Senator Xenophon said he hoped the naval shipbuilding inquiry would lead to the Government reversing its “baffling and disastrous decision” to shut out local ship builders and expertise from even tendering for the two upcoming Navy supply ships.

Press Release, July 21, 2014; Image: Australian Navy