Securing the future of Australian shipbuilding has undoubtedly been on choppy waters in recent years. Debate over the facts of construction costs overseas versus in Australian shipyards and the potential lack of engineering expertise outside the country has lurched backwards and forwards, muddying the waters on the best way to further the Australian Navy's defence expansion.
With years of experience in defence engineering, Interconnect Systems wanted to use our expertise to help decide if it is better that the Navy builds their vessels in Australia or overseas.
A forecasted 2,500 Australian jobs will be created in the next few decades to support the skilled construction of naval vessels.
The case for overseas construction
In 2015, a report from the RAND Corporation commissioned by the Australian Department of Defence indicated that the cost of building naval vessels at home was 30-40 per cent higher than equivalent overseas projects. This contributes to a significant inflation of the national defence budget. These figures were backed by a recent Australian Strategic Policy Institute report referenced in The Australian, which claimed the Navy could save over $1 billion on construction by outsourcing work to Vietnam.
Figuring out the amount of money the Australian Navy spends on construction gives an indication as to the cost of labour and expertise in the national market. This cost drives the debate in favour of outsourcing shipbuilding to relieve the bloated defence budget.
Why the Australian Navy shouldn't be building overseas
However, there are plenty of reasons to keep Australian shipbuilding at home, with web advocates Australian Made Defence highlighting:
- Local construction means thousands of new jobs in shipbuilding areas – statistics from a Department of Defence whitepaper confirms this, with a forecasted 2,500 jobs to be created in the next few decades to support this skilled construction work.
- This injection of local jobs also goes a long way to fuelling other local economic booms in hospitality, amenities and other services.
- The long-term strategy of building in Australia makes use of local expertise and skilled professionals. It also ensures any costly mistakes of poor design or construction from unskilled overseas workers are minimised.
The Defence whitepaper highlights the importance of local shipbuilding to developing a robust strategy moving forward to 2035 national defence targets. The decision to commit to a permanent naval program marks a dedication to securing even more jobs than the 1,000 already safeguarded with local construction contracts. This decision also ensures Australian vessels are built with the best in local expertise and product suppliers.
The part Interconnect Systems plays
Interconnect Systems has a comprehensive background in defence engineering as an industry leader for more than 20 years. It provides electrical interconnect products and solutions, including cable and wire harness manufacture. For more information on the range we supply to the defence market, contact Interconnect Systems today.