Release of an Australian Strategic Policy Report
ASPI Program Director for Budget and Management, Dr Mark Thomson today released Setting a Course for Australia’s Naval Shipbuilding and Repair Industry.
This document addresses the key defence industry issue confronting the Government today: How should they apply their new ‘strategic approach’ to defence industry to the Naval Shipbuilding and Repair Sector.
In releasing the publication, Dr Thomson said that:
‘This first-time application of the new defence industry policy will have profound repercussions for all of Australian Defence industry for years to come.’
‘The Government’s new approach seeks to sustain critical industry capabilities through long-term partnerships with selected large companies rather than continue with open competition in all cases.’
‘There is a clear danger that in the absence of competition a single Australian naval shipbuilder would become complacent, bureaucratic and inefficient – in effect a privately owned Government shipyard.’
‘We do not think that the Government should abandon open competition for the prime contracts for shipbuilding projects.’
‘Instead, there are five clear steps the Government should take to improve the way Defence works with the sector, and to enhance the way industry supports Navy:
Let commercial forces shape the sector. The Government is poorly placed to second-guess commercial forces about the shape of the industry, and if things go wrong it runs the risk of owning the solution – literally.
Smooth the shipbuilding workload. The current planned bunching of ship acquisitions commencing near the end of the decade could be much improved to remove another boom and bust cycle.
Reform Naval repair and maintenance. The support of the fleet needs to be underpinned by properly funded long-term contracts that make maximal use of industry capability.
Sell ASC to the highest competent bidder. This would allow new players to enter the industry which might be able to bring non-defence work to the firm and new blood to the sector as a whole.
Avoid Australian-unique requirements. The best way to reduce risks, contain costs and ensure timely delivery of projects is to avoid unnecessary Australian-unique equipment solutions.’
To find a copy of the Report go to ASPI’s website: http://www.aspi.org.au after 12:00 noon today.