Frustrated defence companies are warning the Labor government they cannot handle new uncertainty about major shipbuilding projects amid revelations Canberra faces billions of dollars more in construction costs and is poised to acquire warships packed with missiles.for shipbuilding programs under way, such as the $45 billion future frigate project.
The blowout stems from a combination of insufficient money allocated by the previous Coalition government, and the decline in value of the Australian dollar against its US counterpart, as well as cost overruns associated with design and production. “We understood the government wanted to do the Defence Strategic Review and industry was tolerant of that,” he said. “But, at what point is the government going to start issuing contracts because industry, particularly local industry, is suffering.”
Jennifer Parker, senior adviser at Australian National University’s National Security College and a former naval officer, said the number of Hunter-class frigates would need to be reduced from the nine planned, unless the government agreed to expand the size of the surface combatant fleet, given the Defence Strategic Review’s “intent for navy to get more missiles”.