Bendigo 'well-placed' to build more armoured vehicles as federal government announces missile funding

Federal Member for Bendigo, Lisa Chesters, said Bendigo-made Bushmasters and Hawkeis were examples of the elite-level manufacturing that local operations were capable of.

Just days after the release of a defence strategic review, the federal government announced a new package which included $1.6 billion for the delivery of mobile rocket systems - known as HIMARS - and precision strike missiles.

Also announced was $2.5 billion for guided weapons and explosives.

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Bendigo-based Thales has partnered with Kongsberg Defence Australia to build a hybrid Bushmaster, known as a Strikemaster, that could fire missiles 250 kilometres at naval targets.

So far no contract for Strikemasters have been awarded, however it could be linked to an army program known as LAND 4100 Phase B.

Ms Chesters said while the funding would accelerate acquisition of land based maritime strike capability, "no decision has been made on the preferred tenderer".

"The Government and the Department of Defence will work with industry to examine potential options," she said.

"We have a proud manufacturing history and the capability of building elite equipment that our Defence Force needs. The Bendigo-made Bushmaster and Hawkei are shining examples of this.

"The Bushmaster is a Bendigo success story and proof that we can provide the ADF with the armoured vehicles they need."

Ms Chesters said local manufacturers were "well placed to be competitive in any ADF tender process."

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Defence minister Richard Marles said the funding was a "game changer" for the Australian military, which was deemed not fit for purpose by the strategic review.

Talks were underway with major manufacturers about setting up facilities in Australia, Mr Marles said.

"What we've really seen in the war in Ukraine is the worldwide shortage of missiles amongst our friends and allies," he said.

"For us to acquire this capability for our country going into next five to 10 years, we're simply going to have to develop an industrial base in this country which can contribute to the manufacturing of guided weapons."

The minister reiterated defence spending would rise above two per cent of Australia's GDP, with $19 billion set to be spent during the next four years to implement the findings of the strategic review.

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Opposition defence spokesman Andrew Hastie said there were still risks with the review, which recommended a cutback in infantry fighting vehicles from 450 to 129.

"What we were hoping to see was an overall increase in defence spending, what we've seen instead is cost shifting and cuts to capability, specifically army land power," he said.

"That has consequences if we have to fight in a close combat scenario in our northern land or maritime spaces, or indeed in the Pacific island chain, you've got to have that capability and there's a risk not having it."

- WITH AAP

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