The Turnbull government will unveil a $3.8 billion loan scheme to help Australia join the world's top 10 arms exporters

Image © Commonwealth of Australia/ Department of Defence/ Supplied

The Turnbull government will open a $3.8 billion loan scheme to close “market gaps” for Australian defence companies seeking finance to boost shipments of weapons and other exports into the US, UK, Canada, Indo-Pacific and Middle East.

Prime Minister Malcolm Turnbull and his defence and trade ministers will announce details of the industry assistance scheme on Monday, which includes an extra $20 million to run a multi-year export campaign and enhance the ability of small and medium sized companies to compete globally.

The government aims to lift Australia’s defence exporting sector into the world’s top ten from 13th, despite it being a relative minnow alongside the nation’s big mining, education and tourism exporters, with between $1.5 billion and $2.5 billion in defence sales a year.

“It is an ambitious, positive plan to boost Australian industry, increase investment, and create more jobs for Australian businesses,” Mr Turnbull will say.

The funding support comes as the Turnbull government’s defence force spending hits a record $200 billion and amid ever-growing concerns about the shifting balance of power in the Asia-Pacific region.

Deputy Prime Minister Barnaby Joyce on Sunday indicated that the rise of China’s military might was a greater threat to Australia than terrorism.

“Obviously China has had immense growth in its military capacity,” Mr Joyce told Sky TV. “I don’t think China’s about to invade anybody – nor would I suggest that for one second.

“But a fact is a fact; they’ve extensively grown their military capacity and we have to be aware of that.”

“Obviously terrorism has the capacity to do some atrocious things… but they don’t have the capacity to take over a nation or completely wipe out our defence forces.”

“It’s a statement of the bleeding obvious that any nation that has the capacity to over-run you is always the greater threat. Whether they’re going to do that is an entirely different question”.

Measures to be announced on Monday include the creation of an Australian defence export office that will work alongside Austrade in identifying opportunities for new sales and help companies gear up.

The loan facility will be administered by Efic, the government’s export credit agency, which is overseen by Trade Minister Steven Ciobo.

“This will help Australian companies get the finance they need to underpin the sales of their equipment overseas,” Mr Turnbull will say.

“It will provide confidence to Australian defence industry to identify and pursue new export opportunities knowing Efic’s support is available when there is a market gap for defence finance.”

Mr Turnbull – who showcased last month to Japanese counterpart Shinzo Abe an Australian-made Bushmaster military vehicle made in Victoria by Thales – will say there are already dozens of success stories. These include Hawkei vehicles, Austal ships and CEA’s radar products.

“This strategy sets the conditions for even more success and more defence industry jobs in the future.”

This article was originally published by the Australian Financial Review. Read the original here, or follow the AFR on Facebook.

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