Hundreds of small Aussie businesses have suffered an enormous blow in government deal.
Hundreds of small Aussie businesses have suffered an enormous blow from the government’s shock cancellation of the French-Australian submarine deal.
Australian Industry Defence Network Chief Brent Clark informed a Senate inquiry that small businesses spent a mean of $200,000 every upgrading their capabilities for the now-cancelled navy submarine challenge.
“Our members are indicating somewhere around 200,000 in losses. Maybe even a little bit more,” Mr Clark stated.
“There were many Australian companies that invested to become part of the attack submarine supply chain. This investment was encouraged by the government.
“The businesses’ investment was based on the reasonable assumption that this program would run for decades.”
In September, Prime Minister Scott Morrison made the shock announcement that Australia would scrap it’s submarine program with the French instead of the AUKUS deal with the US and UK.
But on the Senate inquiry on Friday, it was revealed that the government’s plans to shred the French settlement had been months within the making.
Australian Nuclear science and Technology Organisation head Shaun Jenkinson stated he was first requested about his organisation’s potential to help an endeavour reminiscent of AUKUS by the government in early 2021.
“Initial conversations started in March and we had a number of consultations between then and the announcement,” Mr Jenkinson stated.
But the Australian businesses concerned within the unique submarine program together with the French government have been fully blindsided by Mr Morrison’s announcement in September.
“Many of them were gearing up for years to get into this program and now that’s gone,” Mr Clark informed the inquiry.
“The small and medium enterprise community are businesses that run on very tight margins. They need to know what is going to be happening today, and they need to know the whole time.”
Despite the losses skilled by native businesses, the federal government has provided no help to assist them climate this monetary blow.
Mr Clark urged the government to assist the businesses use the brand new capabilities they developed for the French program on different initiatives.
“Some are starting to have to let employees go that they hire specifically for this (French submarine program),” he stated.
“These companies need to be quickly prioritised in the supply chain of other potential programs. For example, the Hunter Class Frigate program.”
Mr Clarke stated it was crucial to Australia’s native business that a minimum of among the manufacturing for the brand new AUKUS program would happen on Australian soil.
“The government needs to ensure that this program is not simply an export opportunity for British and American companies,” he stated.
“It‘s not good enough to sit there and say, we don’t need to make a decision about this for five years because that’s when it’s gonna happen. These are real companies, and these are real businesses, and they have real need.”