Australian Prime Minister Malcolm Turnbull yesterday said that Australian military equipment manufacturers will be offered government-backed loans as part of a A$3.8 billion (US$3.1 billion) package to become one of the world’s top 10 defense exporters.
Australia in 2016 said that it would boost defense spending by A$30 billion by 2021, purchasing frigates, armored personnel carriers, strike fighter jets, drones and a fleet of new submarines — many of which would be built at home.
The country’s defense industry has struggled to obtain finance from traditional lenders that have been unwilling to fund the arms industry, so it has created the loan scheme for companies seeking finance to export military equipment.
Photo: AP
“Australia is around the 20th largest exporter,” Turnbull told reporters in Sydney. “Given the size of our defense budget, we should be higher up the scale than that.”
“The goal is to get into the top 10,” he said.
Australian Minister for the Defense Industry Christopher Pyne said the country would target sales to the US, Canada, Britain and New Zealand.
Australia’s annual defense budget was worth A$34.6 billion this year.
The scheme is also meant to arrest a slide in Australia’s manufacturing sector and provide some support for its economy, which has been hampered by record-low wage growth.
Australia saw a record number of jobs created last year, but its manufacturing sector has shrunk significantly following the end of domestic car manufacturing.
Employment in manufacturing peaked in mid-1989 at about 1.17 million, or 15 percent of the entire workforce at the time. That shrank to 877,000, or 7 percent, late last year.
Australia has seen a wave of new jobs, but companies are not keen on paying employees more, leaving wage growth near record lows in an unwelcome drag on consumer spending and inflation.
The country’s expansion plans come amid increased global demand for military hardware, led by China and Middle Eastern nations, prompting criticism of Canberra from aid agencies, who have said that Australia could make human rights violations worse if weapons were to be sold to the wrong buyers.
Analysts said Australia would need to significantly expand sales beyond its traditional partners to have any chance of fulfilling its ambition.
“There are possibilities, but I doubt US interest especially will go beyond niche capabilities,” said Euan Graham, director of the international security program at Australian think tank the Lowy Institute.
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