The government will aim for more than 70 per cent Australian content in new submarines, Defence Minister Marise Payne says.
That will include high grade steel produced in Australia, as used in the navy's six Collins submarines.
The government is now launching contract negotiations with French shipbuilder DCNS, with work to finalise the design expected to run for about five years, the first steel to be cut about 2022-23 and the first submarines in the water by about the end of next decade.
New submarines will roll off the production line in Adelaide at the rate of one every two years.
Shadow defence minister Stephen Conroy called on Senator Payne to mandate a minimum 70 per Australian content as it negotiates the contract with DCNS.
Senator Payne said DCNS was asked to produce a plan for Australian involvement as part of the competitive evaluation process.
"The government will make the quantity as high as it possibly can," she told a Senate estimates committee hearing.
"I will be asking the department to aim higher than that (70 per cent)."
Some content definitely won't by Australian, including the computer combat system and weapons which will come from the US.
Head of the Future Submarine Program Rear Admiral Greg Sammut said Defence was in preliminary discussions with Australian steelmakers, as was DCNS.
"Australian steel is going to be used in construction of the submarines," he said.
DCNS has expressed a preference to construct the complex submarine nose section at its Cherbourg yard but Adml Sammut said Defence needed to examine capacity of Australian industry to construct all parts.
He said it would be advisable for the same type of Australian steel to be used throughout.
Required steel amounts aren't large, with the pressure hull accounting for around 30 per cent of the 4500-tonne weight. Steel used for construction of Collins subs came from Wollongong specialist steelmaker Bisalloy.
Senator Conroy accused the government of refusing to commit to a minimum 70 per cent Australian content.
"We've heard promises about submarines before, we are hearing promises about local content, we're hearing promises about where the steel will come from. When faced with a chance to write it into a contract, this government runs away," he told reporters.
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