Federal ministers Alan Tudge, Tim Wilson, Chris Crewther, Michael Sukkar, Kevin Andrews and senator Jane Hume converged on RUAG Australia's office at Bayswater on Wednesday for the announcement that, should BAE Systems secure the project, RUAG Australia will produce world-leading ballistic armour for the 225 Australian Army combat reconnaissance vehicles (CRVs).
Under the agreement, RUAG Switzerland will transfer the technology to RUAG Australia to enable the armour to be produced locally, a move that would boost Australia’s capability in advanced protection solutions. The arrangement would also allow for RUAG Australia to export the ballistic armour.
BAE Systems is competing against Rheinmetall to secure the project. BAE Systems has offered the AMV-35 with a commitment to build the vehicles in Victoria, while Rheinmetall has offered its Boxer CRV and has promised to build them in Queensland.
In the last week, BAE Systems has announced it has signed a memorandum of understanding (MOU) with the University of Melbourne, offering its students the opportunity to do graduate placements, internships and research and development (R&D) activities at its proposed state-of-the-art manufacturing and innovation centre at Fishermans Bend.
A new campaign by the state's Labor government was also launched recently, including billboards throughout Canberra aiming to promote the strengths of Victoria’s defence industry and record in manufacturing military vehicles.
The LAND 400 Phase 2 project has become highly politicised over the past few months, with accusations that the project will come down to pork-barrelling in marginal seats.
Victoria's acting Minister for Trade and Investment Ben Carroll said the state is fearful the decision will be based on political point-scoring rather than merit.
"We’re fighting hard for Victorian jobs – we have the skills and proven track record needed for this critical project," Minister Carroll said.
"This is an opportunity for Malcolm Turnbull to repair some of the damage his party caused when they abandoned Victoria’s auto workers.
"This decision should be made in the best interests of our defence force, our troops and our country. It should not be made in the best interests of Malcolm Turnbull’s political career."
The state government has also argued the recent dumping of Victoria's federal MP Darren Chester as infrastructure minister in favour of Queensland's John McVeigh has put the LAND 400 Phase 2 project at risk of being jeopardised by political interests.
"The Andrews Labor government has grave fears that Malcolm Turnbull’s dumping of Victorian Nationals MP Darren Chester paves the way for Victoria to be frozen out of the vitally important LAND 400 Phase 2 defence contract," Minister for Trade and Investment Philip Dalidakis said in December last year.
"The LAND 400 contract is crucial to our national interest and instead of being awarded on merit, it looks increasingly likely that it will go to Queensland as a naked pork-barrelling exercise designed to help save Coalition seats at the next federal election."
Victoria's defence sector is estimated to be worth $8 billion to the local economy every year, and is made up of about 20,000 people and more than 400 businesses.
Under the project, which is worth up to $5 billion, 2,000 jobs are expected to be created.
Pleased to join @AlanTudgeMP @TimWilsonMP @ChrisCrewtherMP @kevinandrewsmp @MichaelSukkarMP @SenatorHume to announce that RUAG Australia will manufacture world-leading ballistic armour in Bayswater Victoria as part of our #LAND400 bid pic.twitter.com/bqQYh00xxh— BAE Systems Australia (@BAESystemsAus) February 21, 2018