In the T-shirt making stakes Australia is all at sea but when it comes to building frigates the nation will carve out a competitive edge.
That's the message Defence Industry Minister Christopher Pyne emphasised at the start of his first meeting with a special naval shipbuilding advisory board in Canberra on Monday.
The board includes former US navy representatives.
In coming decades Australia will build nine new frigates, 21 Pacific patrol boats and a dozen offshore patrol vessels and submarines in South Australia and Western Australia.
The submarine project is worth $50 billion and is Australia's largest defence procurement project.
Mr Pyne talked up the federal government's innovation agenda and the importance of high tech manufacturing.
"We can't compete with certain countries around the world making T-shirts - our labour costs are simply too high," he told reporters in Canberra.
"We certainly can compete in making frigates and submarines and offshore patrol vessels."
The government has been keen to avoid a so-called "valley of death" - the lag between completed and yet-to-start shipbuilding contracts - as the air warfare destroyer project inches to a close.
But Mr Pyne played down the job losses from the end of that project, pointing to the 5000-strong workforce of engineers, scientists and specialists needed in the next five or six years.
Australia had been the sixth highest importer of defence equipment in recent years, he said.
"That's not a statistic we should be proud of - we want to change that."
