There are three additional limitations to consider. First, Defence’s figures include a substantial number of jobs carried over from previous projects. That obscures the all-important ^[5] issue of how aggregate employment numbers will change. Carryover is especially significant for sustainment—a problem that also applies to recent official announcements ^[6] on job creation for military vehicle assembly.

Second,  the annual averages for shipbuilding are based on the implicit and untested ^[7] assumption that companies constructing the Pacific patrol boats and the offshore patrol vessels will secure equivalent follow-on work in the medium to long term.

Third, Defence said at the October hearing that its estimates of indirect jobs contain supply chain jobs only. Relevant economic modelling suggests those figures also incorporate a substantial consumption-induced employment effect, at least for larger build projects (see table 2). Consumption-induced jobs add to employment across the economy—but not in naval shipbuilding and sustainment.

Table 2: Ratio of direct to indirect jobs in naval shipbuilding and sustainment

If those three limitations hold, I estimate additional or ‘new’ jobs will account for around one-third of the total number of jobs that naval shipbuilding and sustainment are expected to support in the period ahead. That support covers an estimated 15,000 jobs, ^[13]measured on an annual average basis. The remaining two-thirds consists of numbers for jobs carried over from previous Defence projects, in serious doubt or created in non-defence areas of the economy. All those figures are maxima since they exclude the impact on national employment of the economic costs ^[14] associated with paying for and resourcing ^[15] projects.

There was also some confusion at the October hearing about a total job figure for the future frigate build of 6,300 attributed to former minister Christopher Pyne. That figure is substantially higher than Defence’s current figure of 4,000. The department claims ^[16] that the difference between the two figures is attributable to the Pyne figure including consumption-induced employment.

An alternative, and perhaps more likely, explanation is that the 6,300 jobs relate to 2028—the project’s first year at peak production—and that Defence’s figure of 4,000 is an annual average ‘smoothed’ across peak and non-peak levels of project activity. The problem of Defence juxtaposing annual average data and peak annual data extends to the department’s testimony in October that direct jobs for the future frigates of 1,500 (an annual average figure) will approach 2,500 (a peak annual figure) by 2028.

Finally, taken at face value, Defence’s estimates paint a picture of job creation that’s counterintuitive: the future frigate build generating many more jobs than the much larger future submarine build (see table 3).

Unfortunately, that’s difficult to assess without additional data including an indication of each project’s Australian content. The assumed levels of domestic content underpinning Defence’s job estimates for most build projects weren’t presented at the hearings and haven’t been disclosed elsewhere.

Table 3: Comparison of job creation for future frigates and future submarines