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The government’s decision to put the LAND 400 Phase 3 program on hold is a “blow” to the defence industry, according to the federal opposition.
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Last week, the Albanese government announced it would delay the selection of a preferred tender for the $18 to $27 billion LAND 400 Phase 3 project — aimed at procuring and supporting up to 450 next-generation infantry fighting vehicles (IFVs).
A final decision will now be subject to recommendations handed down by the Defence Strategic Review (DSR) in March.
The government had previously committed to selecting a preferred tender before the end of 2022.
According to shadow minister for Defence Andrew Hastie, the government has dealt a “blow” to the defence industry.
“It’s disappointing for many small and large businesses, and their workforces, that have been preparing and investing in anticipation of a decision,” he said.
“…Labor government’s delay in the decision means many businesses will have to wait until March next year to know whether they are successful in tendering or not.”
Hastie said the decision has added to the uncertainty surrounding Australia’s defence modernisation strategy.
“Over recent months, the opposition and the defence industry have been calling on the government to provide clarity and certainty about the timing and direction of LAND 400 Phase 3,” he added.
“…Given the DSR will have significant impacts on Australia’s defence industry, the Opposition calls on the government to improve its constructive engagement with the industry.”
Two contenders for the LAND 400 program remain, Rheinmetall Defence Australia (RDA) and Hanwha Defense Australia (HDA).
RDA, which has committed to basing its manufacturing operations in Queensland, is proposing its Lynx IFV.
HDA, which has formed a cross-state partnership with local firms in Victoria and Tasmania, is proposing its Redback IFV.
Both vehicles have completed a two-year Risk Mitigation Activity (RMA).
The opposition had also previously expressed concern over the broader implications of the DSR.
According to the Terms of Reference, the DSR would include considerations of the “priority of investment” in Defence capabilities.
Led by former chief of the defence force, retired Air Chief Marshal Sir Angus Houston, and former Labor defence minister Stephen Smith, the review aims to “identify and prioritise” the estate, infrastructure, disposition, logistics and security investments required to “provide Australia with the Defence force posture required by 2032-33”.
This would involve considering “all elements of the Integrated Investment Program” and issuing recommendations for “the program’s reprioritisation” in response to recently announced “large-scale projects”, including the nuclear-powered submarine procurement program under the AUKUS agreement.
Hastie had urged the Albanese government to provide assurances regarding key defence projects to avoid further delays in capability delivery.
He also criticised the appointment of former minister Smith, who he claims presided over scraps to defence programs and $5.5 billion in cuts to spending.
[Related: LAND 400 P3 call postponed, subject to review ]
