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Small businesses pay the price for French subs deal

Helena BurkeNCA NewsWire
Australian Industry Defence Network Chief Brent Clark said small Aussie businesses spent an average of $200,000 upgrading their capabilities for the now-cancelled French submarine project.
Camera IconAustralian Industry Defence Network Chief Brent Clark said small Aussie businesses spent an average of $200,000 upgrading their capabilities for the now-cancelled French submarine project. Credit: istock

Hundreds of small Aussie businesses have suffered a huge blow from the government’s shock cancellation of the French-Australian submarine deal.

Australian Industry Defence Network Chief Brent Clark told a Senate inquiry that small businesses spent an average of $200,000 each upgrading their capabilities for the now-cancelled military submarine project.

“Our members are indicating somewhere around 200,000 in losses. Maybe even a little bit more,” Mr Clark said.

“There were many Australian companies that invested to become part of the attack submarine supply chain. This investment was encouraged by the government.

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“The businesses’ investment was based on the reasonable assumption that this program would run for decades.”

In September, Prime Minister Scott Morrison made the shock announcement that Australia would scrap it’s submarine program with the French in place of the AUKUS deal with the US and UK.

But at the Senate inquiry on Friday, it was revealed that the government’s plans to shred the French agreement had been months in the making.

Australian Nuclear science and Technology Organisation head Shaun Jenkinson said he was first asked about his organisation's ability to support an endeavour such as AUKUS by the government in early 2021.

“Initial conversations started in March and we had a number of consultations between then and the announcement,” Mr Jenkinson said.

But the Australian businesses involved in the original submarine program along with the French government were completely blindsided by Mr Morrison’s announcement in September.

“Many of them were gearing up for years to get into this program and now that’s gone,” Mr Clark told the inquiry.

“The small and medium enterprise community are businesses that run on very tight margins. They need to know what is going to be happening today, and they need to know the whole time.”

Despite the losses experienced by local businesses, the federal government has offered no support to help them weather this financial blow.

Blue collar workers in industry - welding and metal cutting
Camera IconAustralian Industry Defence Network Chief Brent Clark said small Aussie businesses spent an average of $200,000 upgrading their capabilities for the now-cancelled French submarine project. Credit: istock

Mr Clark urged the government to help the businesses use the new capabilities they developed for the French program on other projects.

“Some are starting to have to let employees go that they hire specifically for this (French submarine program),” he said.

“These companies need to be quickly prioritised in the supply chain of other potential programs. For example, the Hunter Class Frigate program.”

Mr Clarke said it was imperative to Australia’s local industry that at least some of the manufacturing for the new AUKUS program would occur on Australian soil.

“The government needs to ensure that this program is not simply an export opportunity for British and American companies,” he said.

“It‘s not good enough to sit there and say, we don’t need to make a decision about this for five years because that’s when it’s gonna happen. These are real companies, and these are real businesses, and they have real need.”

Originally published as Small businesses pay the price for French subs deal

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