The Australian military equipment manufacturers will be offered government-backed loans as part of a $3.8 billion AUD or $3.1 Billion USD package which will place Australia as one of the world’s top 10 defense exporters as said by Prime Minister Malcolm Turnbull on Monday.
Australia stated it would increase defense spending by $30 billion AUD by 2021, purchasing frigates, armored personnel carriers, fighter jets, drones and a fleet of new submarines, many of which would be built locally.
The defense industry has been struggling to gain the favor of traditional lenders that have been unwilling to fund the arms industry which became an obstacle in getting finance from them, so Australia has created a $3.8 billion AUD loan scheme for companies searching for finance to export military equipment.
Christopher Pyne, the minister for the defense industry, stated that Australia aims to make United States, Canada, Britain and New Zealand their target market. Australia’s annual defense budget was worth $34.6 billion AUD this year.
Australia’s plans of expansion emerged due to the increased global demand for military hardware, led by China and Middle East nations, stimulating the criticism of Canberra from aid agencies who appeal that Australia could render human rights violations worse if weapons were sold to the wrong buyers.
Analysts claim that Australia would need to expand sales significantly beyond its traditional partners to have any chance at all of fulfilling its ambition to expand the defense industry.