Labor's South Australian senator Alex Gallacher took aim at the Liberal government's Future Frigate tender only requiring bidders to reach 50 per cent Australian industry participation.
"The Air Warfare Destroyer Program has achieved Australian contract expenditure in the order of 50 per cent across the whole program. While the Commonwealth acknowledges there are significant differences between the Air Warfare Destroyer Program and this project, the Commonwealth expects that this project will achieve the same or higher level of Australian contract expenditure," the tender document reads.
Senator Gallacher said businesses in South Australia are concerned by the target given the level of expenditure, accusing the government of setting a bad precedent for supporting local manufacturing in the case of the automotive industry demise.
"There should be scrutiny of that level of expenditure and there is concern in South Australia amongst small to medium enterprises, larger enterprises, about the government’s bona fides in respect to Australian content, and rightly so; this is the government that walked away from motor vehicle manufacturing in our state," Senator Gallacher said.
"I can speak for South Australia; the maximum amount of Australian content is a burning issue given the treatment of the manufacturing industry in that state. We have a once in a generation opportunity to rebuild out of the destruction you caused in the destruction of manufacturing motor vehicles and the demise of that."
Western Australian Labor senator Louise Pratt said the concerns over Australian industry are shared in the west, accusing the government of a lack of transparency in defence procurement projects.
"I rise to share the concerns of Western Australia industry in relation to the complete lack of transparency provided by the government in relation to local content," Senator Pratt said.
"Now what we know is that there are grave fears that Western Australia could be missing out on billions of dollars of work under this significant contract and that is because foreign bidders have not been required to partner with Australian industry."
Senator Pratt said the evidence presented by Austal CEO David Singleton at a Senate inquiry last year allowed for the foreign tenderers to exclude Australian shipbuilders Austal and ASC.
"As Austral chief executive David Singleton said, when the request for tender came out, he expressed concern that that was the end of engagement between us and the companies bidding on the tender. He said at the time there was something about the RFT that seemed to draw foreign shipbuilders away from continuing dialogue with ourselves," she said.
"So it strikes me that there is good reason for the Senate to be concerned about the failure to produce all of these documents. We know that the number of these companies … the government needs to be focused on choosing homegrown, world-class, steel shipbuilding industries here in Australia. As well as South Australia, I contend that Western Australia will get a raw deal if the federal government is not fair and transparent and makes good on its local content provisions."
South Australia will be the build site of nine Future Frigates, 12 Future Submarines and two Offshore Patrol Vessels, while Western Australia will house the construction of 10 Offshore Patrol Vessels.