"Australian industry welcomes the opportunity for greater industry and funding certainty provided by the Government's release of the independent Enhanced Lethality Surface Combatant Fleet review into the Royal Australian Navy's surface fleet," Innes Willox, Chief Executive of the national employer association Ai Group said today.

"We cannot have genuine national security without the industrial security of a sovereign defence industry. As we navigate the complexities of the Australian defence landscape and the evolving Indo-Pacific strategic challenges, it is imperative that defence industry is provided with clear capability forecasts, a funding pipeline and the appropriate resources to implement this national endeavour.

"To that end, Ai Group acknowledges that the Royal Australian Navy's surface fleet will be expanded to include eleven new general-purpose frigates providing maritime and land strike, air defence, and escort capabilities and six new large optionally crewed surface vessels (LOSVs) to increase long-range strike capacity.

"Given the proposed growth of the Australian Navy's surface combatant fleet, the review's findings need to be matched with appropriate funding levels.

"Ai Group therefore welcomes the Government's announcement of an additional $1.7 bn over the forward estimates and $11.1 bn over the next decade for accelerated delivery of the surface combatant fleet and to expand Australia's shipbuilding industry. The Government needs to be open to providing further funding as required to ensure Australia's capability needs are met.

"Ai Group also welcomes the announcement that an estimated 3700 direct jobs will be supported in South Australia and Western Australia into the 2040s, with a continuous pipeline of shipbuilding established in both locations.

"However, the decision to scale back the Hunter Class program will be challenging for some in the industry. The reduction in the number of Hunter frigates raises concerns, particularly regarding the need for certainty and consistency in South Australia to deliver the pipeline of work.

"A further challenge will be that the initial purchase of 'Tier 2' ships will be built overseas and will require transition to an Australian-build. This will need to be carefully managed to ensure the engagement of Australian supply chains throughout the process.

"It is important to recognise that the real work begins now. The major restructure of the Navy comes amid criticism that the Government has been too slow to react to the dire warnings contained in the Defence Strategic Review.

"While the Government's commitment to a sovereign ship building capability appears promising, successful implementation is critical. Past struggles in managing shipbuilding projects underline the urgency for effective project delivery.

"The announcement in the review that a shipbuilding forecast will be issued biennially with the National Defence Strategy is welcome. The first of these will be released in tandem with the Naval Shipbuilding and Sustainment Plan, and Ai Group looks forward to working with the Government on these important initiatives," Mr Willox said.

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