Defence Minister warns France over local work on $80b subs program


Relations between the Federal Government and the French company designing Australia’s future submarines have hit a new low, with the Defence Minister declaring she will hold the group to account on its local industry commitments.

Key points:

  • The chief executive of Naval Group questioned the capability of Australian suppliers in an interview with The Australian
  • Defence Minister Linda Reynolds said the Government would “hold Naval Group to account for the commitments they signed on for”
  • Defence Industry Minister Melissa Price has previously said there is no specific percentage requirement of Australian industry content included in the contract

The Minister’s blistering attack followed comments from France-based Naval Group questioning the capability of local suppliers, and suggestions Australian businesses may not get half of the value of contracts under the $80 billion program.

Naval Group Australia chief executive John Davis told The Australian newspaper on Thursday that the company “didn’t know the Australian market before we joined the program”.

“Now we have a much deeper insight, and we recognise there is a lot more work to be done than we anticipated,” he said.

A furious Defence Minister Linda Reynolds expressed her disappointment at the comments and said she would discuss the Government’s expectation of strong Australian industry involvement when she met her French counterpart in Europe on Friday.

“I am disappointed by the comments attributed to Naval Group Australia on the Future Submarine Program as they do not reflect the strong collaboration between Naval Group and Australian industry on this program of national significance,” Senator Reynolds said in a statement.

“Our Government will hold Naval Group to account for the commitments they signed on for to work with Australia’s world-leading defence and shipbuilding industry.”


In 2016, Naval Group (then known as DCNS) beat rival bids from Germany and Japan. (ABPH Joanne Edwards)

The Defence Minister is scheduled to meet her French counterpart Florence Parly tomorrow during the Munich Security Conference, where she says she will “continue discussions on this ongoing commitment”.

Senator Reynolds said “the maximisation of Australian industry involvement through all phases of the submarine program” was outlined in the Government’s Strategic Partnering Agreement with Naval Group, signed last year.

Australia’s submarine requirements explained With the winning bidder for Australia’s next fleet of submarines announced, attention turns to how it will meet Australia’s high-endurance requirements.

Under earlier questioning in Parliament, Defence Industry Minister Melissa Price said there was no specific percentage requirement of Australian industry content in the contract with the French company.

“The actual proportion of Australian content on the submarines will be determined as the design of the submarine is completed,” Ms Price told Parliament.

In 2016, Naval Group (then known as DCNS) beat rival bids from Germany and Japan to build 12 new submarines for the Royal Australian Navy over the next three decades.

Last year the ABC revealed Australia would be forced to make multi-million-dollar compensation payments to France if the submarine program was terminated.