AUKUS alliance: Call to safeguard Aussie jobs in subs project

Australia risks losing out on jobs and investment under the new submarines deal if foreign-owned giants freeze out local manufacturers, a key industry group has warned.

Martin Hamilton-Smith. Picture: AAP

Australia risks losing out on jobs and investment under the new submarines deal if foreign-owned defence and manufacturing giants use their scale to freeze out local manufacturers, a key industry group has warned.

The Australian Sovereign Capability Alliance is urging the federal government to install safeguards to guarantee Australian workers and firms are not sidelined under the new deal with the US to build nuclear-fuelled subs at Osborne.

The alliance fears that in job terms Australia may be no better and possibly worse off than under the controversial Naval Group contract, which became bogged down in argument over the percentage of local build.

The alliance, led by former SA Liberal leader turned Weatherill government trade minister Martin Hamilton-Smith, this week lodged a Senate economic references committee submission urging the creation of a National Ship Building Authority reporting to the Prime Minister to maximise Australia’s role in the project.

The submission says there is a danger the prime multinational partners in the new deal could dominate work on the project at the expense of local jobs. “Multinational primes should not be allowed to use their market power and superior financials to win shipbuilding-related contracts until Australian-owned companies have been given the opportunity to win the work,” it warns.

“Suppliers to multinational defence primes should not be able to relocate … and redefine themselves as Australian companies, until they have been compelled through contracts with government to exhaust every opportunity to partner with and uplift genuinely Australian-owned enterprises to the required standard.

“Where foreign companies relocate to Australia, they should be required by contract to employ Australians, or bring with them from overseas skilled migrants and their families on a path to permanent residency.”

The submission also warns that voters are less likely to support vast defence spending if the bulk of the money invested goes offshore in terms of job creation and profits. “There is a high level of cynicism, and an absence of social licence, when Australians see their taxes spent creating jobs and enterprise (for) someone else’s country through ‘off-the-shelf’ purchases of ships or submarines.”

The alliance has also commissioned research by Flinders University showing Australia’s capacity to manufacture essential goods is the lowest in the OECD, a fact underscored by the pandemic.