The Victorian premier has aimed an extraordinary salvo at the prime minister saying the federal government has “turned its back on Australia’s second-biggest state” by sending a $5bn defence contract to Queensland.
Malcolm Turnbull announced on Wednesday that the German contractor Rhienmetall had won the tender to build the army’s next generation of light armoured vehicles at Ipswich, in Brisbane’s blue-collar west, with the promise of 1,500 jobs.
Daniel Andrews said the decision had “broken what little remaining faith I had in Malcolm Turnbull and the Liberals”.
“In 2013, the federal Liberal government ‘dared’ the automotive industry to leave Australia,” he said. “Guess what happened? Ford, Toyota, Holden, gone. All of them Victorian-based, all of them leaving behind giant empty shells of factories where thousands once made their livelihoods.
“Four years later, it was in those very empty factories where we planned to locate our next emerging manufacturing industry: defence vehicles. Victoria was bidding for a $5bn contract to build those defence vehicles.
“We were best placed to build these vehicles that would defend our nation, but we couldn’t provide the electoral boost that would defend Malcolm Turnbull’s career.”
Victoria’s industry minister, Ben Carroll, told ABC radio on Wednesday the decision “has been based on marginal seats in Queensland and not the best interests of the nation”.
“Victoria has always been the home of manufacturing; it’s the cornerstone of our economy,” he said. “It’s not the cornerstone of Queensland’s economy. Far from it.”
Turnbull and the defence minister, Marise Payne, stressed the government accepted the best bid, one recommended by the defence department and backed by the country’s most decorated soldier, Ben Roberts-Smith, as the safest option.
“This is about Australia’s security,” Turnbull said at Brisbane’s Enoggera Barracks. “But it’s not simply or solely about capability in a military sense. It is about ensuring that we have, for the first time, a fully integrated national sovereign defence industry.”
Payne said the competing armoured vehicles underwent rigorous testing: “We’ve put them in the heat. We’ve put them in the cold. We put them in the wet. We put them in the dry. We shot at them, we tried to blow them up.”
But others are concerned the process has been too heavily dominated by interstate politics rather than the needs of the military.
Marcus Hellyer, a senior analyst at the Australian Strategic Policy Institute, said: “Overall it appears the government has made the right decision for the right [capability] reasons.”
He said the government’s pivot towards Australian-made military hardware had meant companies seeking manufacturing contracts were pushing economic rationale for their bids alongside pure military capacity and value-for-money.
“I would agree that the public discussion has been rather unhelpfully hijacked by state-level parochialism,” he said.
Gerry Wheeler, the head of public affairs for Australia’s largest defence contractor, Raytheon Australia, told parliament two weeks ago that interstate rivalry for defence industry spending bordered on “hysterical, if not destructive”.
“What has got completely out of hand is the way some … states have used parochial local media to prosecute their own individual cases to win federal government work with scant regard for the national interest,” he said.
He told the joint standing committee on foreign affairs, defence and trade that the project was an example where members of parliament should have talked about “capability, cost, risk and schedule”.
“Instead, the only discussion [was] about economic activity,” he said. “That may be very important, and it is. But that is crowding out the public discussion about what sort of defence capability the ADF is going to get.”
Wheeler also questioned the number of jobs touted from the project and suggested MPs were “peddling false hope”.
“You have one state saying that it will generate 450 jobs and a billion dollars worth of economic activity,” he said. “Another state is saying it will generate thousands of jobs and $5bn worth of economic activity.
“For the same project, generating the same number of … combat reconnaissance vehicles, how does that work? I just don’t think there’s a proper examination of these issues and there certainly isn’t a proper public discussion about the capabilities that the ADF is going to get through that project.
“The protection of our service men and women are the sorts of issues that we should be talking about rather than how many jobs a certain project is going to create.”
Australia’s defence budget is set to increase about 6% this financial year, to a total of $34.7bn. The government predicts an 80% jump over the next decade.