Shipbuilding key driver of South Australia's economy

A KEY sector driving economic growth in South Australia is entering the stage where preparation transforms into visible action. The Techport Australia shipbuilding complex at Osborne on the Port River is ready for work to begin cutting steel for the air warfare destroyers.
Millions of dollars have been spent on the complex. Mostly this has been out of view, building the huge concrete apron where the ships will be assembled, a 213m wharf and dredging for the massive shiplift. This is big-scale industry generating hundreds of jobs - and there's lots more to come. The first of three destroyers, HMAS Hobart, is due to be completed by 2014 with the HMAS Brisbane and HMAS Sydney to follow. By then, Techport will be gearing up for the next major contract, the new generation of submarines.
Building the submarines in Adelaide was a federal election promise by the Australian Labor Party which must be honoured. With the air warfare destroyers behind it, ASC will be favoured to build the submarine work though still will have to win the contract on merit.
While unconventional conflicts such as Afghanistan are likely to dominate military deployment in the near term, Australia cannot afford to lose its place as a significant player on the conventional stage. The Federal Government's Defence White Paper, due out later this month, is expected to say Australia must be cognisant of the rise of China and the potential for tension with the U.S. as the two grapple with being the most powerful nations this century.
Australia, as a good friend of both countries, will want to help soothe any tensions but needs to come to the table from a position of strength. That is why the Federal Government will keep up spending on big-ticket items such as destroyers and submarines.
For SA, this vindicates the strategy of successive governments to make Adelaide a centre of excellence in naval shipbuilding. It began with the Bannon government's drive for the Collins-class submarine project. It was revived through SA Cabinet members of the federal Coalition government, such as Robert Hill, supporting the destroyer contract and has been taken further by the Rann Government's facilitation of the industry.
The work has created high-value jobs and helped buffer the manufacturing sector from the financial downturn - welcome outcomes for the state economy.
Foley's land  tax challenge
TREASURER Kevin Foley, now committed to the job for the long haul, faces a tough decision on the land tax issue.
The long-running and well-organised campaign to lower the impost is gathering pace, rather than ebbing away. Yet Mr Foley is wrestling with sinking revenues and the need to stimulate the state economy when he delivers the Budget in June.
The Motor Trade Association, for example, wants more than $100 million land and payroll tax cuts, warning jobs will be lost in the automotive sector if these do not occur.
It will almost certainly be the toughest Budget Mr Foley has had to prepare in his seven-year stint as Treasurer.