Defence Minister David Johnston today said a five-year plan by the Abbott Government to maintain Mulwala and Benalla munitions plants will underpin about 550 jobs in rural Victoria and New South Wales.

Senator Johnston said the decision will allow negotiations to be finalised on a program worth more than $350 million, ensuring Australia will continue to have an Indigenous munitions industry.

Accompanied by the Federal Member for Farrer, Sussan Ley, the Defence Minister made the announcement on new Domestic Munitions Manufacturing Arrangements (DMMA) during a visit to meet workers at Mulwala.

“This is great news for the Mulwala workers and their colleagues down the road at Benalla,” Senator Johnston said.

“Entering into the new interim arrangements for continuing operations at Benalla and Mulwala means the facilities will be able to retain about 550 direct manufacturing jobs in regional Victoria and New South Wales.

“Maintaining a skilled and competent workforce has been a constant challenge for munitions manufacturing in Australia due to the relatively small munitions demand spread across a number of munitions types,” the Defence Minister said.

The new agreement means Thales, the operator of the Mulwala and Benalla plants, will be able to proceed with confidence in the production of world leading explosives technology.

“I understand from my briefing today with Thales that a high-grade propellant manufactured from this plant is used to fill Australian Defence Force (ADF) cartridges to achieve world class accuracy and lethality,” Senator Johnston said.

The announcement was also warmly welcomed by Ms Ley as a key measure that would help provide economic stability in regional economies.

“Obtaining some clarity on the future of the Mulwala and Benalla plants has been a critical priority for me since the Coalition was elected,” she said.

“It goes without saying, this is a vital decision which provides immediate certainty for hundreds of local workers, their families and our local economy.”

Thales Australia currently manufactures propellant and high explosives at Mulwala, NSW and munitions at Benalla, Victoria.

Benalla also manufactures small arms ammunition including 5.56mm, 7.62mm and 12.7mm (.50 calibre), and 20mm ammunition. Consideration is being given to extending production to 81mm mortar bombs and filling 155mm artillery projectiles.

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