Experts Say Navy Contract `winner'
Newcastle Herald
Wednesday January 30, 2002
NEWCASTLE'S construction of the Royal Australian's Navy's new Huon-class minehunter vessels was a major economic win for the Hunter, a win for Australian industry and a win for the Defence Department, according to an expert report.
Tasman Economics prepared the report for the Australian Industry Group Defence Council.
Defence Minister Robert Hill presented the report in Sydney yesterday.
It found construction of six minehunters by ADI Ltd in Newcastle ? a contract worth more than $1billion ? generated about 3180 full-time equivalent jobs in the Hunter over the project's life.
The nine-year construction also contributed up to $887million to Australia's GDP, added about $492million to household consumption and improved business practices for more than 75% of participating firms.
Tasman Economics found that if the project had not been awarded to Newcastle, the city's unemployment rate would have spiralled, putting more pressure on the local community and State and Federal government budgets.
The report estimated that if the ships had been bought overseas, Commonwealth outlays on the Newstart allowance alone, or its equivalent, could have been about $21million higher.
Report author Denise Ironfield said building the minehunters and, previously, ANZAC frigates in Australia proved it was better to manufacture defence hardware than buy it ready-made overseas.
`The project has been a major win for regional Australia, with nearly half of the minehunter suppliers in the Newcastle region,' Ms Ironfield said.
ADI reported that 2000 subcontractors, ranging from world-leading defence companies to small Hunter businesses, worked on the minehunters .
About 850 local businesses contributed.
The first four ships in the class - Huon, Hawkesbury, Norman and Gascoyne - have been commissioned into the Navy.
The Diamantina is yet to be delivered and the Yarra is to be commissioned in September.
Tasman Economics found that each extra $100million the Commonwealth spent on the minehunters generated a further $195.6million increase in national output and 836 Australian jobs.
Australian Industry Group Defence Council chair Paul Salteri, of Tenix, said he wanted to see a defined level of Australian involvement in future defence contracts.
ADI managing director Jean-Jorge Malcor said his company hoped to win a $350-$400million contract for Navy patrol boats being considered by the Commonwealth.
Hunter shipbuilders ADI and Forgacs are vying for the contract.
© 2002 Newcastle Herald