Wannon MP Dan Tehan has described the loss of potentially dozens of new Ararat jobs as “disappointing” after the federal government overlooked Victoria for a major defence contract.
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Ararat manufacturer AME Systems will not gain millions of dollars in work and dozens of jobs through defence contractor BAE Systems after a bid for new armoured vehicles went to Queensland.
However, AME Systems could share in 170 jobs that will be created in Victoria by the winning contractor.
Federal Defence Industry Minister Christopher Pyne announced on Wednesday morning that the LAND 400 project’s $5.2 billion phase 2 search for a new armoured vehicle had gone to Rheinmetall.
Mr Tehan said regional Victorian businesses, including AME Systems, would still be involved in the “truly national enterprise” to build a new generation of combat reconnaissance vehicles.
“While it is disappointing that Victoria missed out, it is clear that Rheinmetall had the superior bid when it came to soldier safety and cost,” Mr Tehan said.
“That said, the Turnbull Government’s investment decisions are complemented by a comprehensive defence industry policy agenda to support a robust, resilient and internationally competitive defence industry.
“Rheinmetall although basing their manufacturing hub in South East Queensland will partner with more than 40 manufacturers Australia wide who will benefit from this decision. Included in these 40 manufacturers are regional businesses in Victoria.”
Ararat’s AME Systems was in line to fulfill a $20-million subcontract for electrical wiring harnesses that could have delivered dozens of jobs to the region if Victoria’s bid was successful.
Australia’s armed forces will adopt the Boxer CRV, made in Queensland, rather than BAE Systems’ 30-tonne, eight-wheel-drive AMV35 armoured vehicle, which would have been made in Victoria.
The majority of the AMV35 work would have taken place in Melbourne.
AME Systems is listed as a Victorian vendor, in a flyer released by Rheinmetall, to share in 170 new jobs and $635 million in spending with 11 other companies.
While visiting Ararat to announce funding for a new fire station, Victorian Deputy Premier James Merlino accused the federal government of making a “politically motivated” decision.
“This is devastating for Ararat, it’s devastating for regional Victoria,” he said.
“It’s a politically motivated decision that impacts on our economy, on job creation, including right here in Ararat.
“Victorian Liberal ministers and members need to stand up and say why this decision was made.”
Mr Merlino accused Prime Minister Malcolm Turnbull of being more interested in shoring up marginal seats in Queensland than in picking the best defence contractor.
Mr Tehan pointed blame at the state government.
“The question that needs to be asked is, why did Rheinmetall decide to base it's manufacturing in Queensland and not Victoria, why did Victoria let Rheinmetall go?” he said.
“Rheinmetall was selected because it will deliver our troops the best possible capability including increased safety, mobility and firepower.
“The decision is based on the clear recommendation of Defence and follows a comprehensive three-year tender and rigorous testing process.
“The process was designed to secure the best outcome for Defence, Australian Industry and the Australian taxpayers.”
State Ripon MP Louise Staley accused the state government of running an “ineffectual campaign” to secure to help secure the contract.
She also noted the lack of Labor MPs at an AME Systems LAND 400 promotional event in November.
State Industry and Employment Minister Ben Carroll said he “could not express his disappointment more” at the decision.
He said he would be campaigning for workers in Ararat to gain some of the 170 jobs earmarked for Victoria for parts of the project.
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