The Australian Navy’s future submarine project has been excluded from the country's shipbuilding review on advice from the Abbott government that the new fleet would be built offshore.
The review’s final report, published on Thursday, contained some passing references to the future submarine project, including the fact the government had been looking at offshore construction of the fleet.
"Australia's $40 billion future submarine project was left out of a key consultant's report on the local shipbuilding industry on the instructions of the Abbott government," says an observer.
But consultants from the US-based military research think-tank Rand Corporation confirmed the government had set terms of reference that excluded the submarine issue, which has been a source of considerable political heat for months.
Lead author of the Rand report, John Birkler, said the $50 billion SEA-1000 project to provide the Navy’s next fleet of submarines was not in the terms of reference.
Clearly, the Prime Minister Tony Abbott wanted to send Australia's $50 billion new submarine construction project offshore to Japan towards the end of last year, local media commented.
The report, commissioned in September when David Johnston was defence minister, was focused on reviewing Australia’s shipbuilding capabilities and the costs and benefits of government investment in the industry.
Building naval warships in Australia costs 30% to 40% more than it does in comparable overseas shipyards, the review has found.
The report’s executive summary – which has been distributed to media in advance – said 7,950 people were working in shipbuilding and submarine and ship repair last financial year. About half of those were employed by the government-owned shipbuilder ASC.
The current timing of planned acquisitions of new vessels and equipment "is likely to produce short-term and long-term gaps in demand for shipyard production, facilities, services and workers," the report said.