Victoria and South Australia have joined forces to press for urgent federal funding to save military shipbuilding jobs as the industry enters the so-called "valley of death" between work orders.
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Premier Daniel Andrews and his SA counterpart, Jay Weatherill, announced on Thursday they had struck a formal agreement committing the two states to a higher level of co-operation to help deliver "much-needed certainty" to the defence sector.
"It is now vital that we get a consistent pipeline of work, or jobs will go and industry will leave," Mr Weatherill said.
It comes days after BAE Systems, the operator of the Williamstown shipyards in Melbourne's west, told a Senate inquiry it had slashed 150 subcontractors and 13 permanent staff. Hundreds more jobs are on the line in coming months.
The company, which employs more than 800 people at Williamstown, said it was assessing the viability of the shipyard because federal government work orders were quickly drying up.
The new accord between the two state governments calls for federal funding in the May budget to provide a "continuous build of naval ships". It also calls for new patrol boat projects to be fast-tracked and a revision of supply ship contracts to allow local builders to tender.
But Defence Minister Kevin Andrews said the accord proved the premiers would "prefer to play politics" with the future of the defence industry rather than work constructively with the federal government.
"If the premiers actually cared about the future of the defence industry in Australia, they would have lobbied the former federal Labor government, who over their six years did not commission a single naval vessel from an Australian shipyard," he said.
"Years of neglect by the former Labor government has left naval shipbuilding in a precarious and uncertain state."
He said the premiers had failed to acknowledge significant Defence Department investments already being made in their states, with at least $4.6 billion in SA and $3.8 billion in Victoria over the forward estimates.
The Victorian government and the Australian Manufacturing Workers Union have stepped up calls for the federal government to act amid fears hundreds of employees will be out of work if the Williamstown shipyard closes down.
Boilermaker Peter Betts, who has worked at Williamstown for five years, said morale was rock-bottom and most employees were waiting for the axe to fall with large-scale layoffs.
"Another 17 contractors were let go just today [Thursday]," he said.
"The job I'm currently working on, the Air Warfare Destroyer project ... we've probably got four months at best left."
Mr Betts, 30, of Altona, said he had given up hope that his job was safe.
"The reality is there's no hope at all ... even if they were to fast-track something it would still take a year before we got steel to start manufacturing.
"There will be heavy layoffs and it doesn't matter what the government does. I think both Labor and Liberal are to blame."
AMWU assistant national secretary Glenn Thomson said the union would work collaboratively with the Victorian and SA governments to ensure long-term viability of the maritime defence industry.
He said a company like BAE Systems "needs certainty in order to make commercial decisions".
