SA must think big on defence to double spending

The $90 billion in shipbuilding defence spend in SA could be used to position the state as the defence industry capital of South East Asia.

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Adelaide should position itself as the defence industry capital of South East Asia to help double the return from the coming spending boom, economist Brian Haratsis says.

Speaking at the BankSA Trends lunch yesterday, Mr Haratsis said “Adelaide is primed for the role”.

However, he warned against the risk of becoming a “fly-in, fly-out” city for workers in the defence sector.

He also suggested a $250-$500 million “sovereign wealth fund” should be created, such has been done in Aberdeen in the UK, to connect the defence and business sectors.

The NUSHIP Sydney (the third and final Air Warfare Destroyer at the Osborne shipyard. Picture: Brad Fleet.

Mr Haratsis said while $90 billion had been committed at the federal level to build the Future Submarines and Future Frigates in Adelaide, if you accounted for 60 per cent of that being spent locally, with a 2.4 times multiplier, the figure was more like $134 billion. This was a huge opportunity, he said.

“If you get it right, you will double the spend of defence in Adelaide,” he said.

“(But) the industries that spin out of defence is what’s important. You’ve got 10 years to leverage the shipbuilding opportunity or not.’’

Ongoing construction at the Osborne Shipyards as part of the expansion ahead of new shipbuilding work. Picture: Brad Fleet. (August 2019)

He forecast the defence money would start being spent in earnest in 2021-22.

The Advertiser’s Defence Jobs Forum is on at the University of Adelaide tonight.

For more information visit the booking website.