Japan prefers to build new submarine fleet in Australia, Christopher Pyne says

Updated

All three international bidders for the multi-billion-dollar contract to produce Australia's next fleet of submarines would prefer to build in Australia, according to Cabinet Minister Christopher Pyne.

The Federal Government is undertaking an international Competitive Evaluation Process with Japan, France and Germany all bidding for the lucrative deal.

Industry Minister Mr Pyne has confirmed Japan is open to an Australian build process, and said all three countries were prepared to offer a local build option.

He said all three countries were preparing hybrid and overseas build proposals too, but the bidders were aware the Federal Government wants the submarines to be constructed in Australia.

"All three of them are now saying they'd prefer a domestic build," Mr Pyne told Channel Nine this morning.

Ahead of the overthrow of former prime minister Tony Abbott a number of senior South Australian Liberals were fearful they would lose their seats if Japan secured the contract and the submarines were built offshore.

The state had originally been promised a job boosting submarine package by the Coalition Government, to offset the loss of thousands of car manufacturing jobs.

There is increasing Coalition concern that disillusioned votes will turn to other parties at the next election in protest, including Labor and the group formed by independent Senator Nick Xenophon.

Mr Pyne holds a South Australian seat that is considered marginal and has played up the prospects of Japan's interest in building in Australia.

"As a South Australian that is music to my ears but we will go through the proper processes and we'll make an announce at the appropriate time," he said.

"Sounds to me like all three bidders are picking up that we'd like to spend $50 billion of defence industry money in Australia where it creates jobs, new technologies, innovations, all sorts of spin-off industries.

"It would be great for Australia."

Labor's defence spokesman Stephen Conroy said he was happy to hear all countries were providing a local build option.

But he said Mr Pyne had not indicated that the Government will rule out building the submarines overseas.

"Well he's pretty brave today but he was silent when this debate's been raging for the last 12 months," Senator Conroy told AM.

"When Chris Pyne and Marise Payne and Malcolm Turnbull receive those bids they should only consider the three domestic build bids."

SA calls on Federal Government to rule out overseas build

South Australia's Labor Government said the Commonwealth should rule out hybrid or overseas builds completely.

Defence Industries Minister Martin Hamilton-Smith said a local build was always a required part of the pitch.

"This morning's news is nothing new in the sense that we know all three bidders can do it here, Australia can do this," he said.

"What we need is a Federal Government that rules out the overseas and hybrid build, and gets on with the job of building 12 subs."

He said the Government could easily act now to stop the bidders from continuing to explore offshore proposals.

"What we need from the Commonwealth Government is for them to rule out any requirement for the three bidders to bid for an overseas or a hybrid build," he said.

"Now that could be done by Monday morning."

Topics: defence-industry, manufacturing, australia, adelaide-5000, sa

First posted