The federal government has promised more jobs will be created in Australia’s submarine industry regardless of where the next generation of subs are built.
The government is weighing up how to replace the existing six Collins Class submarines, which are due to retire in the 2030s.
Defence officials confirmed this week they had visited Japan, which is understood to be the favoured builder.
It’s believed Japanese-built submarines could cost around $20 billion, while locally made vessels are likely to be up to $36 billion.
The federal opposition and the South Australian government are warning of thousands of job losses in the state’s shipbuilding industry if the contract goes to Japan.
Who could build Australia’s submarines?
• German firm ThyssenKrupp Marine Systems says $20 billion (excluding design and project management, or lifetime maintenance), using an Adelaide-based workforce.
• The Swedes put the figure at $20 billion.
• Japanese Soryu subs could be bought off-the-shelf for around $20 billion.
• Australian Strategic Policy Institute says likely cost is $36 billion if built locally.
Industry Minister Ian Macfarlane said no decision had been made on the submarine fleet.
“But whatever the outcome I can promise you this: there will be more jobs in South Australia as a result of whatever submarine we buy,” Mr Macfarlane said.
The long-term jobs would be in maintaining the fleet, while the final electronics in the new submarines would be fitted in Australia.
“So there will be extra jobs in the construction phase and in the maintenance phase,” the minister said.
“If you’ve got almost twice as many subs, you’ve got almost twice as many jobs in terms of looking after them.”
Prime Minister Tony Abbott said the best price would guide the government’s decision.
“We should make decisions on the next generation of submarines based on defence logic, not based on industry policy or on regional policy,” Mr Abbott said.
“We want the very best submarines, and we want them at the best possible price, and they’re the criteria that we should look at as we finalise decision making in this area.”
SA Liberal senator Sean Edwards has joined Labor calls for an open tender process.
But fellow SA Liberal, Education Minister Christopher Pyne, said he believed his state would benefit from the new submarines.
“I can’t reveal my conversations that I’ve had in cabinet sub-committees and at cabinet meetings,” he said.
“I believe that South Australia should be the big winner from the new submarine project, and I believe that it will be.”
Opposition defence spokesman Stephen Conroy said he would be pursuing the issue of an open tender in Senate estimates hearings in Canberra next week.
“There’ll be some maintenance work, but two-thirds of the actual overall cost of a submarine build … have to be counted in this tender process,” he said.
“If we’re building them in Japan, all our spare parts are sourced in Japan, all of the intellectual property is in Japan then Australia is getting a dud deal.”