Australia plans to become leading defence-industry exporter

2018-01-30 05:31
Australian Prime Minister Malcolm Turnbull inspects a guard of honour in India. (Manish Swarup, AP, File)

Australian Prime Minister Malcolm Turnbull inspects a guard of honour in India. (Manish Swarup, AP, File)

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Canberra - Australia's government announced a strategy on Monday to create high-tech jobs and become one of the top 10 defence-industry-exporting countries within a decade through arms sales to liked-minded nations while also keeping those weapons from rogue regimes.

Australia will create a A$3.8bn ($3.1bn) fund to lend to exporters that banks are reluctant to finance, a central defence export office and expand the roles of defence attaches in Australian embassies around the world.

Prime Minister Malcolm Turnbull said that with A$200bn budgeted to increase Australian defence capabilities in the next decade, Australia should rank higher than 20th among arms-exporting countries.

The planned Australian military build-up was the largest in its peace-time history, he said.

"Given the size of our defence budget, we should be a lot higher up the scale than that. So the goal is to get into the top 10," Turnbull told reporters.

Defence Industry Minister Christopher Pyne said Australia would focus on growing sales to its biggest markets including the US, Britain, Canada and New Zealand, which already import Australian-made equipment including the Bushmaster armoured vehicle and the Nulka missile decoy.


The five nations belong to an intelligence-sharing network known as the Five Eyes.

"We want to support the United States, the UK, New Zealand, Canada, our European friends and allies, Japan, South Korea, et cetera, in what is a building up of the global military capability of countries like our self who support the rules-based international order," Pyne said.

"The defence export strategy is not designed to get into markets where we don't want to be. It's designed to maximise the markets where we perhaps haven't been making the most of our opportunities," he added.

Turnbull said the strategy was about creating hi-tech Australian jobs and not a response to any national threat, such as increasing tensions and the Chinese military build-up in the South China Sea over competing territorial claims.

"Apart from North Korea, there is no country in the region that shows any hostile intent toward Australia," Turnbull said. "We don't see threats from our neighbours in the region, but, nonetheless, every country must always plan ahead and you need to build the capabilities to defend yourself, not just today, but in 10 years or 20 years hence."

The push to increase Australian defence manufacturing jobs came after General Motors in October became the last automaker to quit building Australian cars.

Most of the new Australian defence spending is on submarines and frigates that will be largely built in Australia.

Australia and France in 2016 signed an agreement to build a fleet of 12 of the world's largest diesel-electric submarines for A$56bn.

DCNS, a French state majority-owned company, will begin building the first sub in the Australian city of Adelaide in 2022.

Australian law

Australia will soon announce whether BAE Systems, Fincantiere or Navantia has won a A$35bn contract to build a fleet of nine navy frigates starting in 2020.

Australian law prohibits military exports that are inconsistent with Australia's international obligations or national interests.

Prospective exports are assessed in areas including impacts on human rights, regional security and Australian foreign policy.

"We've got strict controls and those controls make sure we only supply defence assets in the future to like-minded countries that have a strong human rights record and have protections in place." Trade Minister Steve Ciobo told Nine Network television.

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