Thales hits back at claims local build cost taxpayers more

French defence group Thales has fired another round in its war with critics of buying defence good locally, with the release of a detailed economic analysis of how defence spending flows through to the national economy.

The company, which came under fire in an auditor-general’s report which said armoured vehicles similar to its Hawkei vehicle could be bought more cheaply overseas, commissioned economic analysts AlphaBeta Advisers to study payments by Thales Australia to its Australian suppliers over a three-year period.

AlphaBeta lead researcher Dr Andrew Charlton said greater understanding of the value and impact of Defence spending in the Australian economy was critical as the Government ramped up major acquisition programmes.

Charlton said: “Prime Defence contractors such as Thales are key to translating spend into effective supply chain and investment programmes because they provide a link between the Department of Defence’s investment and the many other Australian businesses in the supply chain, many of which may not be defence specialists.”

Minister for Defence Industry, the Hon Melissa Price said: “This analysis by Thales demonstrates how our investments are creating local jobs, and also building the critical defence capability we need to deliver a capable, agile Defence Force.

“We have been upfront with the prime contractors about their obligations to partner with Australian businesses, and Thales is leading by example.”

Thales has been in dispute with auditor general, Grant Hehir whose report, partially blacked out on the orders of the government, was critical of the cost of local purchases.

Thales applied for a Federal Court injunction against the national audit office over the report.

Thales Australia CEO Chris Jenkins said there was a substantial jobs and economic activity benefit from spending more of the defence dollar in Australia. It delivers thousands of jobs spread through hundreds of business across the nation.

“For more than 30 years we’ve been building a whole industrial ecosystem in Australia to support the ADF and exports, and it shows in this data in the broad range of industry sectors that are part of our Australian supply chain – from metal fabrication and engineering to professional and scientific services.

“This analysis provides strong evidence in support of the Government’s policy of requiring high levels of Australian Industry Capability (AIC) in its acquisition and sustainment programmes.

“In our case, the areas where we deliver Sovereign Industry Capability – notably Munitions and Small Arms, Protected Vehicles and Maritime support – are where the greatest benefit accrues to our Australian supply chain.”

Picture: Thales/Hawkei production line, Bendigo

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