$5 billion tank deal means jobs for Qld

Tracey Ferrier
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Queensland has won a $5 billion contract to build super tanks for the Australian Defence Force

A Queensland-based defence contractor has been awarded a $5 billion federal government contract to build a new fleet of super tanks, but Prime Minister Malcolm Turnbull denies the decision was designed to shore up marginal seats in the state.

Victoria is fuming after the federal government backed a bid by Rheinmetall Defence Australia to build 211 Boxer CRV tanks at a new facility at Ipswich, west of Brisbane.

The state also was vying for the record Army contract and has accused the federal government of giving it to Queensland in the pursuit of marginal seats.

Mr Turnbull denied the allegation as he formally announced the project in Brisbane, saying the benefits of the project will be spread across the country.

He said the tanks contract is the largest single acquisition ever made for the Australian Army, and forms part of the government's plan to make Australia one of the world's top 10 defence exporters.

"We have had a big defence budget for a long time, but we have not spent enough of it in Australia," he told reporters at the Enoggera Army Barracks.

"We have not spent enough of it with Australian workers, with Australian steel, with Australian technology, building up the means to enable us to build our own capabilities and, indeed, export them to the world."

He says it will also create 1450 jobs across the country, with other spillover effects as the defence industry grows.

"These advanced manufacturing projects, the cutting edge of defence technology, they spread through the economy. That's why it's so important that we combine national security in the military sense with economic security."

But Victoria's Industry Minister Ben Carroll questioned why the work had gone to a state not known for manufacturing.

"We really do believe this has been based on marginal seats in Queensland and not the best interests of the nation," Mr Carroll told ABC radio on Wednesday.

"Victoria has always been the home of manufacturing, it's the cornerstone of our economy. It's not the cornerstone of Queensland's economy - far from it."

Queensland's State Development Minister Cameron Dick said the state government has worked hard to bring Rheinmetall to Queensland and secure the contract, which he said would create 600 jobs in the state.

"It is a new beginning for manufacturing in Queensland," he told ABC radio.

"We've been working with Rheinmetall for three years to secure this contract."

Mr Turnbull said Rheinmetall had designed a superior tank, and the company happened to have chosen Ipswich as its base.

"This is about lethality and survivability. This is about capability and protection," he said.

Rheinmetall's Ben Hudson says the company plans to use its Ipswich manufacturing base to tap into opportunities that could be worth tens of billions in the global military vehicle market.

"Our military vehicle centre of excellence may be based in Queensland, but it is a focal point for the national endeavour to deliver the capability," he said.