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SA risks becoming 'Ikea' state for defence

Business

UPDATED: South Australia’s new defence hub is a smokescreen and SA risks becoming an “Ikea state” where vessel modules will be clicked together, says SA Independent Senator Nick Xenophon.

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Hours after Adelaide was named the location for $230 million Centre for Defence Industry Capability, Xenophon told InDaily on the hub was to “placate” SA while other states closed in on the contract to build the vessels.

“We’ll be like Ikea,” he said.

“We will just become a place where we snap things together.”

Xenophon said SA’s biggest threat to securing the contract was from Western Australia, which had stepped up its defence-building prowess over the past six months.

“This is a smokescreen and without a contract we are in the same position we were in three years ago.

“It’s just to placate us.”

Earlier today Prime Minister Malcolm Turnbull unveiled plans for the defence centre in Adelaide to help small businesses to supply defence markets and open up export opportunities.

Turnbull, who will host a cabinet meeting in Adelaide on Tuesday, said South Australia would be at the heart of the government’s defence industry plans.

The PM was joined by Minister for Defence Senator Marise Payne and Minister for Industry, Innovation and Science, Christopher Pyne.

A key initiative of the 2016 Defence White Paper, the centre will bring together the private sector, Defence and AusIndustry to transform the relationship between defence and industry.

“This centre will ensure that the businesses, the innovators, the food growers of the future are able to connect with defence and defence is able to connect with them,” he told reporters in Adelaide.

“If you put your faith and your dollars behind Australian innovation, as we are doing … then you will drive the jobs.”

But Turnbull declined to say whether the navy’s new offshore patrol vessels would be built in SA amid concern about further job losses at shipbuilder ASC.

There are fears within government and industry that another state, such as Western Australia, will be chosen to build the vessels, leaving ASC with a lack of ongoing work to sustain its workforce before the future frigates build commences in 2020.

Defence Minister Marise Payne said the government was taking action to prevent jobs from being lost.

“We know there are serious issues and I treat them very seriously,” she told reporters.

“Any job loss is a matter of concern but what we have under way is a program of naval reconstruction for the Australian navy to address precisely that.”

Turnbull is in Adelaide for a three-day visit and will meet SA Premier Jay Weatherill on Tuesday evening.

with AAP

 

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