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Getting the most from Australia's Defence Industry Policy: a comment on the PC's latest Trade and Assistance Review

"While the Productivity Commission's (PC) latest comments on defence procurement contain important insights, interpretations that suggest that it has found the Future Submarine Program amounts to rampant protectionism are way off the mark," the Chief Executive of the Australian Industry Group, Innes Willox, said today.

"Such views misrepresent the very strong potential the submarine and other defence industry programs have for the Australian economy.

"The PC's annual Trade and Investment Review draws attention to the strategic benefits that can flow from self-reliance in areas of defence acquisition and to the role of spillovers into the broader economy when technology-intensive activities are undertaken in Australia. Both areas are central to ensuring that Australia generates strong benefits from the considerable investments the Government has decided to make in the acquisition and sustainment of Australia's defence capabilities.

"Ai Group has frequently emphasised the importance of ensuring that the full benefits of these initiatives, including the submarine build, are captured by ensuring a high involvement of competitive local businesses; a strong commitment to workforce training programs; and a high degree of technology transfer to domestic industry.

"For example, the new submarines will be incorporating world class advanced manufactured systems, software and weaponry. There is very strong potential for more than 1,000 Australian-based companies, including many SMEs and their employees to participate in various stages of the submarine fleet life, design, construction and sustainment. The technology associated with the new class of submarines has the potential to lead to substantial investments in training and skilling, offering highly productive long-term career opportunities for thousands of young Australians which would otherwise not exist.

"To achieve these benefits, deliberate and sophisticated management of the programs and their links with these economy-wide outcomes is essential. To this end Ai Group supports the PC's emphasis on the importance of transparency around the costs and benefits of defence industry projects and the need to continually assess the degree to which economy-wide benefits are being generated," Mr Willox said.

Media Enquiries: Tony Melville – 0419 190 347