Ted O'Brien (Fairfax, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Defence Industry. Will the minister update the House on how the recent announcement to acquire 211 combat reconnaissance vehicles will not only deliver the best capability to our military but also create jobs around Australia?

Christopher Pyne (Sturt, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

I thank the member for Fairfax for his question. Recently, the Prime Minister, the Minister for Defence and I announced the largest acquisition in the Army's history: a $15.7 billion vehicle acquisition, the combat reconnaissance vehicles, which will protect our soldiers, offering them the best safety and the greatest lethality in the battlefield. It is a step change for the Army in its capability.

After a very long process between Rheinmetall and BAE, Rheinmetall won the contract for that massive acquisition, so we are supporting our capability. It's $15.7 billion over the life of the project—$10.2 billion of that will be spent in Australia; $5.2 billion will be spent in acquisition—of which $2.8 billion will be spent in Australia.

When the tender was first started, the two bidders expected to do five per cent Australian industry content. By the end of the process, they'd announced 55 per cent Australian industry content in the acquisition phase, and 70 per cent Australian industry content over the life of that project. That is $10.2 billion being put into our economy, growing jobs and growing investment. Forty businesses in the supply chain of Rheinmetall will be beneficiaries because of this government's decision to back Australian industry, high technology and advanced manufacturing.

In Queensland alone, it's worth $1.8 billion in acquisition, 330 jobs and 1,450 jobs overall, and will involve companies like Allplates, DGH Engineering, Frontline Manufacturing, G&O Kert, GCI Group, Hetech, IntelliDesign, NIOA and Penske. In Victoria—of course, because all these projects are national projects—they will get $635 million in the acquisition phase alone, creating 170 jobs and involving companies like Nezkot, Supacat, Tectonica, AW Bell, Cablex, Albins, ANE, APT and Extel. The list of Australian businesses is endless, because this government is backing Australian business in defence, growing their jobs and growing our economy. We will get to two per cent of GDP on defence spending a year in advance of what we had promised.

By stark contrast, under Labor they took our defence spending to the lowest level since 1938—since the last year of appeasement—at 1.56 per cent. That was the contrast. This government is delivering capability, jobs and growth in the economy. That side is using defence as something they can cut in order to give more money away.