Federal defence industry funding positions SA as a national shipbuilding powerhouse

South Australia has consolidated its position as Australia's naval shipbuilding capital with more than $3.2 billion in active Commonwealth defence contracts at the ASC and Osborne Naval Shipyard, with the Defence department confirming SA will also be the primary site for AUKUS nuclear submarine construction when that program reaches full scale in the late 2030s.

The current contract work spans the Hunter-class frigates, which are being built at Osborne by BAE Systems Australia, and the Attack-class submarine program which is transitioning to the AUKUS framework. A third major contract — the maintenance and sustainment of the Collins-class submarine fleet — employs more than 2,000 people at the ASC Osborne facility and is confirmed to remain in SA.

Defence Minister Richard Marles said SA's defence industry was at the centre of Australia's most significant sovereign capability investment in 80 years. "What we are building at Osborne is not just ships — it is the industrial base, the workforce pipeline, and the skills ecosystem that Australia will need for generations," he said.

TAFE SA and the University of Adelaide have both established defence-specific training programs in response to the industry's workforce needs, with engineering, materials science, and advanced manufacturing qualifications attracting Defence Industry Scholarship funding.

Business SA estimated the active defence contracts generate approximately $1.9 billion annually in SA economic activity, a figure that will grow substantially as AUKUS program expenditure ramps up through the late 2020s and 2030s. The industry association is calling for an SA Defence Industry Strategy to manage and maximise the state's position in the Commonwealth's defence spending plan.

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