Are Australian Defense Deals in Peril?

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Are Australian Defense Deals in Peril?

Domestic concerns about employment may affect who wins Australia’s new submarine project.

Are Australian Defense Deals in Peril?

Australian submarine HMAS Rankin

Credit: U.S. Navy photo by Mass Communications Specialist Seaman James R. Evans (RELEASED)

On Monday morning, Australian Prime Minister Tony Abbott barely survived a motion for a leadership spill by 61 to 39 votes. Resentment against Abbott’s premiership had been brewing for a long time, thanks to his position on co-payments for doctor’s visits and the decision to cut funding for the Australian Broadcasting Corporation. Tensions finally boiled over with his Australia Day “Knightmare” fiasco and the Labor party’s victory in Queensland’s state elections last week (technically, the Electoral Commission of Queensland is still tallying the final votes, but it appears that Labor will form a coalition government with an independent member there).

Reports indicate that Abbott only survived the spill by compromising on the process of determining which company would produce Australia’s next generation of submarines. Abbott promised South Australian Liberal Senator Sean Edwards that Adelaide companies would be allowed to bid for future submarine contracts, a step back for a potential deal with Japan.

Confusion over the future submarine deal only deepened when Senator Edwards said Abbott had promised him a “full and open tender,” while Abbott insisted he had only promised a “competitive evaluation process.” During parliamentary question time on Wednesday, Abbott attacked the idea of an open tender process: “Do you know about an open tender? Anyone can compete. What the leader of the opposition wants – he wants anyone to be able to compete to provide Australia’s next generation of submarines… We could have Kim Jong-il submarines, Vladimir Putin submarines.” Abbott also accused the opposition of “antediluvian xenophobia” for questioning the wisdom of having Japan involved in the submarine project.

Labor party has been unimpressed by this outburst, with their defense spokesman describing Abbott’s response as a “ridiculous accusation by an increasingly desperate prime minister who has been caught out trading submarines for votes to secure his leadership.”

The National Manufacturing Workers’ Union also expressed concerns over the Abbott’s new plans for the submarine deal, questioning whether Australian companies would actually be given a fair shot or not. They also were disappointed at the political nature of Abbott’s backtrack from a potential deal with Japan: “We are obviously outraged that the prime minister, who knew shipbuilders, including submarine maintainers, were concerned about their long term job security, and the issue only became a matter of importance when it was all about his job,” an NMWU official told the press. The union acknowledges that an international partner may be necessary for the proper design, but continued to push for the submarines to be built as much as possible domestically, reminding Abbott of his campaign pledge to build the next generation of submarines in Australia.

Looking at South Australia’s success in campaigning for domestic production, Victorian senators have also begun to agitate for assurances to keep shipbuilding jobs in Melbourne’s Williamstown docks. Shipbuilder BAE warned that unless there was a commitment to more shipbuilding work in the near future, Victoria’s shipbuilding capability would be lost as existing contracts only provide work up to the third quarter of this year. 500 jobs are immediately at risk, as well as 900 supply chain jobs.

Victorian Industry Minister Lily D’Ambrosio has called for BAE to be allowed to bid for supply ship contracts now that the Australian Submarine Corporation, based in Adelaide, will be allowed to bid for submarine contracts. “While Tony Abbott frets about his own job, the jobs of 500 Victorians are hanging in the balance,” she said. BAE and the Victorian government are united in urging Abbott to decide quickly about more shipbuilding work in Australia: “In order to sustain Australia’s sovereign shipbuilding capability and ensure the best possible outcome for the Air Warfare Destroyer and future programs, decisions about the sector’s long-term future must be accelerated and programs need to be brought forward,” BAE said.

The Collins-class submarines were ultimately built in Australia for domestic political reasons, and it should come as no surprise that the production of Australia’s next generation of submarine fleets and ships will also be ultimately decided by Australia’s voters and job-seekers. From South Australia to Victoria, all politics is local.