Australia will spend A$89 billion
($65 billion) on ships and submarines for its navy over the next 20
years but pressure grew on Prime Minister Tony Abbott on Tuesday to
spend more than half that total building a new submarine fleet
domestically.
The crew of the Royal Australian Navy Anzac class frigate HMAS Perth cheer as they arrive at the Northern Australian city of Darwin in this picture taken on July 3, 2015. Photo: Reuters/Australian Defense Force/Handout via Reuters
Two naval shipbuilding programs, the
A$20 billion SEA5000 Future Frigate project and the SEA1180 Offshore
Patrol Vessels, would be brought forward to guarantee the continuous
domestic construction of surface warships, Abbott said.
Despite that new component, Abbott is
facing intense pressure from within his conservative Liberal Party,
state officials and labor unions to ensure that a A$50 billion stealth
submarine program is built domestically.
The submarine bid, one of the most
lucrative defense contracts in the world, will be considered separately.
Germany's ThyssenKrupp (TKMS), France's state-controlled naval
contractor DCNS and a Japanese government consortium of Mitsubishi Heavy
Industries and Kawasaki Heavy Industries are bidding for that contract.
TKMS is wooing anxious members of the
government with the economic and political benefits of its proposal
despite growing concerns about the potential political repercussions of
awarding the contract to an overseas bidder.
A Japanese government team is in talks
with Britain's Babcock International Group and BAE Systems in response
to Australia's desire to have as much domestic participation in the
project as possible.
Tuesday's announcement drew sharp criticism from South Australia state and from a powerful trade union.
South Australia, a naval and automotive manufacturing hub, is struggling with the nation's highest unemployment rate.
Abbott announced the deal in the state
capital, Adelaide. Martin Hamilton-Smith, South Australia's minister for
defense industries, asked why the submarines could not also be built
there if the frigates are built at existing shipyards.
The powerful Australian Manufacturing
Workers' Union (AMWU) signaled it would hold Abbott to a pledge before
elections in September 2013 that the submarines would be built in
Australia.
"A promise is a promise is a promise,
and we will be holding them to honor the submarine promise right up
until the next election," AMWU Assistant National Secretary Glenn
Thompson said in a media release.
Abbott is also eager to deepen security
ties with Japan, reflecting a U.S. desire for its two allies to take a
bigger security role in Asia as China's military grows.
Source: Reuters