The Abbott-led government is on a collision course with the Australian shipbuilding industry over two of the navy’s most important fleet renewal projects. It is becoming ever more likely that the Royal Australian Navy’s next generation of submarines will be an off-the-shelf purchase from Japan after the government ruled out an open tender, saying there was not enough time for such a process.

The cost of ten state-of the-art Japanese Soryu class submarines to supersede the current Collins class is estimated to be around A$20 billion compared with A$36 billion for an Australian-designed and -built replacement. Any deal with Japan would signal the end of submarine construction in Australia.

The government’s intention to have new submarines built overseas was clear following remarks by the Defence Minister that he would not trust the government-owned shipyard, Australian Submarine Corporation (ASC), to build a canoe. ASC is responsible for the Hobart class Air Warfare Destroyer programme.

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