LAND 400 Project

Mrs VLAHOS (Taylor) (14:41): My question is to the Minister for Defence Industries. What steps is the South Australian government undertaking to maximise benefits to the South Australian economy from the recently announced $10 billion project to replace Australia's armoured vehicles?

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Defence Industries, Minister for Veterans' Affairs) (14:41): The issue of jobs and benefits from this project for South Australia will be important in and around the member for Taylor's electorate, and her ongoing support of the local defence industry should be recognised.

Last week the Minister for Defence, the Hon. Kevin Andrews, announced the first steps in the process for the LAND 400 project. The LAND 400 program includes design, engineering and manufacturing of the next generation of combat vehicles. The project will be the Army's biggest ever acquisition, of up to 800 fighting vehicles at a cost of around $10 billion. It is anticipated that at least twice as much will be spent sustaining these vehicles over the next 30 years.

This is an outstanding opportunity for South Australia's defence industry to grow its existing land vehicle manufacturing and through-life support capability, and to capture a significant share of this massive defence spend at a time when jobs will be lost in the automotive industry. A project of this magnitude would provide skilled manufacturing and trades jobs for many years to come, as well as economic growth across the state.

The state government is actively promoting South Australia as the preferred location for the LAND 400 project and other special land vehicle manufacturing for the Australian Army, and our approach has been threefold. First, there has been lobbying of the Australian government to support increased Australian content for the project. The Premier and I, along with key members of the Defence SA Advisory Board, including the chair, Sir Angus Houston, have directly engaged with the Prime Minister, the defence minister and other members of the National Security Committee of cabinet. Until such time as a final decision is made by the commonwealth, the state government will continue to fight to ensure that South Australia achieves the best possible outcomes as part of this LAND 400 project.

Secondly, we have engaged with likely contenders to promote South Australia as a logical location for their manufacturing, assembly and support operations. The state, at all levels, has engaged closely with the six most likely original equipment manufacturers and their potential Australian-based partners, with regular visits to their overseas facilities and hosting of company executives in Australia, with intensified activity over the past two years. Defence SA has commenced in-principle discussions with each potential tenderer regarding potential tailored state assistance through the bid, technology demonstration and production phases of this project. Staged requisite cabinet approvals will be sought as negotiations advance with each company.

Finally, the state government has developed the concept of a land combat system precinct to encourage current and future related elements of the Army's land combat system to be supported here in South Australia. The LAND 400 vehicles will be closely integrated with the Army's other war-fighting systems, including artillery aviation, communications, unmanned aircraft and intelligence and reconnaissance capabilities, all of which require continuous technological upgrade and ongoing systems integration.

In December 2013, to elevate and differentiate SA's LAND 400 proposal, the government launched the state's concept of the land combat systems precinct. The proposal uses LAND 400 as the genesis to bring together a single location of all the industrial defence elements needed to build, sustain, develop, upgrade and optimise the Army's combat systems in a continuous comprehensive and integrated manner.

Establishment of the precinct could involve over 2,000 workers, including some 700-plus long-term defence employees, and would ensure that SA is a natural home for LCS. This commitment from the state is important. What we need now is a commitment from the commonwealth to make it possible.