Japan willing to build Australian submarines locally

JAPAN has indicated it is willing to build the navy's new fleet of high-tech submarines in Australia.

The nation is one of three, along with Germany and France, who are looking to secure the lucrative defence contract.

The government-owned Australian Shipbuilding Corporation, based in South Australia, has been lobbying for construction to occur locally.

Last month the Federal Government announced an $89 billion plan to build the nation's next generation of warships and submarines.

The naval shipbuilding package included $39 billion to build new frigates and offshore patrol ships and $50 billion for the submarine fleet.

Australian Strategic Policy Institute chair Stephen Loosley said the Japanese announcement was timely, given it was made following the federal leadership change

He said it demonstrated Japan was serious about competing for the contact.

"Japan has decided in the post-Abbott period they will embark on a program of winning the Australian submarine contract," he said.

"If that means constructing the submarines in part or in whole in Australia, then they are prepared to do that to match the French and German offers which are already on the table."

Industry Minister Christopher Pyne said the announcement to build the submarines in his home state was music to his ears.

He said all three parties have now indicated they would prefer a domestic build.

"Sounds to me like all three bidders are picking up that we would like to spend $50 billion of defence industry money in Australia where it creates jobs, new technologies, innovations, all sorts of spin-off industries," he said.

"It would be great for Australia."

Opposition Leader Bill Shorten said Labor had always been committed to building submarines in Australia.