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Land 400 ADF Contract a must have for Queensland Manufacturing

July 5, 2017

The Land 400 Australian Defence Force Contract represents the shot in the arm that Queensland’s manufacturing sector vitally needs.

Queensland manufacturing was once the largest and most important industry sector for the Sunshine State.  It has now slipped to fourth in respect to both contribution to gross state product and employment.

Manufacturing’s contribution to the Queensland economy between 1989-90 and 2016-17 has decreased from 11.4 per cent to just 6.3 per cent and as a percentage of total employment has reduced from 11.9 per cent to 7.2  per cent over the same period.

Manufacturing currently has the lowest growth of all industry sectors and accordingly this trend of diminishing importance will continue for the foreseeable future.

The issue relating to Queensland manufacturing is really one of competitiveness.  Manufacturing is increasingly at a competitive disadvantage internationally due to higher operating costs in Queensland and Australia.

The Aussie dollar; our workplace relations framework including labour costs; high energy costs; and a woeful tax system place both Queensland exporters and import competing manufacturers in an increasingly difficult position as is clearly evident in the graphs above.

Let there be no mistake, Queensland’s manufacturing sector has the significant potential to contribute to the continued growth and diversification of our economy.  Innovation, advanced manufacturing, offshoring of tooling, tailoring to niche product requirements and meeting short timeframes are the necessitated future of this sector. 

At least when it comes to this ADF contract there appears to be less focus placed on price and more on national interest.  This is a godsend otherwise we would probably be building these AMVs and CRVs in some other 'bang for buck' country.

Queensland can capitalise on this opportunity through bipartisan political support.  If won our State’s manufacturing importance as a source of jobs, exports, investment and growth will once again start to ascend.

Quick facts:

  • Land 400 is one of the Defence Department’s biggest projects in history.
  • Under phase two, 225 state-of-the-art combat reconnaissance vehicles will be built, worth up to $5 billion gifting local manufacturers with a supply chain and maintenance work for about 30 years.
  • Approximately 150 vehicles will be based in Queensland to support brigades in Townsville and Enoggera. The winner of phase two is well placed to win phase three — the building of 450 infantry fighting vehicles and 17 manoeuvre support vehicles, worth up to $15 billion.
  • Queensland defence industry directly employs more than 6500 people across all sectors with $3.8 billion in revenue during 2015–16.
  • Queensland companies have expertise in the manufacture, modification, maintenance, repair, sustainment and overhaul of a wide range of vehicles. We also manufacture technologically superior communication systems in the state and develop force protection, combat training systems and composite components.
  • The Queensland Government through Defence Industries Queensland has established a Heavy Vehicle Network of over 150 companies in collaboration with the Industry Capability Network to promote Queensland's strong heavy vehicle capability.

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