The government is considering a plan for continuous construction of new warships, creating long-term shipyard jobs and with ships in service for shorter periods before replacement.
Defence Minister Kevin Andrews said for that to occur, shipbuilders would need to lift their game - productivity is well below international standards and needs to improve for the industry to survive.
Defence Teaming Centre chief executive Chris Burns said efficiencies would come if shipbuilders were assured of ongoing work. The DTC is the defence industry association of South Australia.
Addressing the Australian Strategic Policy Institute future warships conference, Mr Andrews said the government was in the early stages of an ambitious program to procure up to 40 new ships and submarines over the next two decades.
That includes replacements for the navy workhorse, the eight Anzac frigates which start retiring from the middle of next decade.
The government is now developing a naval shipbuilding plan. One option is for continuous construction, replacing the existing stop-start system characterised by long troughs between contracts.
Mr Andrews said that approach was expensive, provided no long-term certainty for workers and didn't enable industry to make investments to improve efficiency.
He said a continuous build program would require defence to carefully manage acquisitions. New warships would remain in service for less time than their predecessors.
The first of the Anzac frigates, HMAS Anzac, was launched in 1994 and will retire about 2025 - a service life of some three decades, long by international standards. US warships typically serve about two decades.
Mr Andrews said the government recognised the significant value of a skilled naval shipbuilding industry which could not be allowed to disappear.
But compared with the US, Australian taxpayers paid 30-40 per cent more for Australian-built ships.
"As it currently stands, it is too high to enable a continuous build strategy to be adopted," he said.
Launching a campaign to promote public support for domestic construction of new defence equipment, Mr Burns said Australian industry had the capacity to build military hardware to international standards and provide value for money.
He said it was great to hear the minister talking of a continuous build program but that still needed to be part of a 30-year national plan for new submarines, frigates, patrol boats and supply ships.
A video produced for the campaign features Labor defence spokesman Stephen Conroy and independent senator Jacqui Lambie talking up the benefits for Australia.
Mr Burns said the science was saying Australia kept its warships too long.
"It might be better to have a shorter lifetime and rotate ships out early," he said.
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