Japan wins $10 billion bid to build Australian Navy's frontline warships and replace Anzac-class fleet
The upgraded Mogami frigate by Japanese shipbuilder Mitisubishi Heavy Industries won the tightly-fought bid against the German MEKO A-200 by Mitsubishi Heavy Industries in what Defence Minister Richard Marles said was a 'very significant moment' in the bilateral relationship with Tokyo.
The move was the 'biggest capability acquisition decision' the Government had taken since announcing the 'optimal pathway' in 2023 to deliver the AUKUS nuclear-powered submarine program, he said.
The frigates will replace Australia's Anzac-class ships and modernise the 'oldest service combatant fleet that the Navy has been operating since the end of the Second World War,' he added.
Mr Marles and Defence Industry Minister Pat Conroy insisted the decision was based on costs and obtaining the 'best platform' in a timely manner to fill capability gaps identified by the strategic defence review in Labor's first term in office.
'It's going to be really important in terms of giving our Navy the capability to project an impactful projection is at the heart of the strategic challenge,' said Mr Marles.
The frigate, which is currently in service in the Japanese Maritime Self Defence Force, is a next generation vessel capable of launching long-range missiles and with a range of 10,000 nautical miles — 4000 further than the current Anzac-class brigades.
'It has a highly capable radar, a highly capable sonar. In that sense, it is genuinely a general-purpose frigate capable of engaging in air warfare and undersea warfare,' said Mr Marles.
The vessel carries a crew of 90, compared to the 170 currently required for the Anzac class, he said.
'It's a much bigger ship which is able to operate with a much smaller crew, and that's a reflection of how modern this ship is.'
Mr Conroy said that 'in terms of cost, capability, of meeting our schedule of delivery, the Mogami-class frigate was the clear winner.'
He added that it was the only option that met the Government's timeline of the first frigate being delivered in 2029 for service in 2030 and was also considered to best meet the operational needs of Australia's regional environment.
Mr Conroy said a newly announced strategic shipbuilding agreement with Austal Limited would secure a continuous pipeline of shipbuilding work and create thousands of jobs at the Henderson precinct in Western Australia.
This would allow Mogami production to be transferred to Henderson after the first batch of three frigates were built in Japan, said Mr Conroy.
The frigate decision would 'transform our Navy into a more lethal and bigger navy. This will reassure our allies, deter our adversaries, and make Australia safer,' he said.
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First Guardian collapse could spark major change in financial compensation
Thousands of Australians who are at risk of losing their nest eggs may have a chance at getting some money back after the federal government ordered a review into a key compensation scheme. First Guardian Master Fund collapsed earlier this year, leaving thousands of Australians in the lurch and unsure if they will ever see their money again. Since 2024, Australians who lose money from a failed or collapsed financial company can claim up to $150,000 through the Compensation Scheme of Last Resort (CSLR) – a scheme that offers compensation to people in relation to complaints about personal financial advice, credit intermediation, securities dealing or credit provision. However, Assistant Treasurer and Financial Services Minister Daniel Mulino has ordered a review of the scheme, as it only offers limited funding and may not be able to cover all the losses when a company crashes. Currently, the scheme puts a cap of $20m on each of the four listed areas. Mr Mulino said the CSLR was in need of a review and was considering imposing a special levy to meet a significant shortfall, with the Financial Services Council (FSC) saying the scheme's costs had blown out by 840 per cent on initial estimates. 'The CSLR pays compensation to claimants where an eligible determination issued by the Australian Financial Complaints Authority (AFCA) remains unpaid,' Mr Mulino said. In July, the CSLR operator revised the scheme's cost to $75.7m, of which $67.3m was attributable to the personal advice sector in 2025-2026. 'This exceeds the $20m limit on levies that can be applied to the advice sub-sector to fund the claim,' he said. 'This has triggered the option available to me as the responsible minister under the CSLR legislation to raise a special levy to pay for the excess costs. 'I have asked Treasury to consult on all statutory options available to deal with this matter. 'The paper seeks feedback on a broad range of options to inform my decision.' FSC chief executive Blake Briggs welcomed the scheme's review, promising to work 'constructively' with Treasury. In a statement, Mr Briggs argued the government scheme needed to be brought under control and made sustainable before imposing the special levy. 'The industry welcomes the minister's engagement on the CSLR special levy,' he said. 'In considering whether and how to determine a special levy, the minister should have regard to the risk of entrenching further moral hazard into the scheme through underwriting investment losses, the financial sustainability and viability of sub-sectors, and spreading the cost as widely as possible to minimise the burden on any one sector.' He said the minister should 'prioritise responding to the outcomes of Treasury's review of the design of the scheme', which was established to 'assess the scheme's framework, scope and sustainability on an ongoing basis'. 'If the industry is going to bear the costs of the $47m special levy, the industry needs assurance that the scheme will not continue to blow out year on year,' he added. 'Already we have seen the scheme blow out by 840 per cent from Treasury's initial estimate of $8.1m per year to $75.7m. 'It is simply not sustainable to have an indeterminate and growing liability being imposed on the parts of the sector doing the right thing to pay for the sins of others.' CSLR chief executive David Berry told NewsWire the scheme could 'only compensate where inappropriate or conflicted advice has been confirmed about a relevant financial product via an AFCA determination'. Regarding the collapse of First Guardian Master Fund, Mr Berry confirmed three claims had been received by CSLR, 'with all three currently going through the information gathering process ahead of eligibility assessment'. Customers who are unsure if they are eligible are urged to contact AFCA to submit their claim. 'At this early stage, the CSLR is not in a position to speculate on the volume or dollar amount of potential claims that the scheme may receive related to the First Guardian Master Fund,' he told NewsWire. About 6000 Australians invested $590m into First Guardian, which was established in 2019 as a management investment scheme. Investors were advised to roll over their superannuation into a retail super fund, then invest their money into First Guardian. Customers said they were unaware their funds were being transferred to First Guardian Master Fund despite the details being written in the company's legal documents. FTI Consulting liquidators Paul Harlond and Ross Blakely, who released their preliminary report into the fund, said they 'intend to undertake further investigations', including the determination 'whether any breaches of the Corporations Act or any other laws have occurred by any party … or any other circumstances exist, which may give rise to a potential claim by investors'. The liquidators said they were 'seeking compensation on behalf of members of the fund for losses suffered', which could be as high as $446m. However, members have been warned they may never see their funds again. FTI Consulting's assessment found the 'overall recoverable value of the investments is likely to be considerably less than their combined book value' and a 'substantial shortfall of recoverable assets to outstanding investor funds will therefore likely arise in the liquidation'. In the report, the liquidators said 'a large proportion of investors in the (First Guardian Master Fund) invested through investment platforms', adding the recovered funds may not be as high as hoped. ' … the liquidators consider the value of the assets may have been overstated in the accounts,' the report read. 'It is very likely that some of the funds' assets/investments are not recoverable or will not recover their full ascribed value. Indeed, significant shortfalls to book values are expected.' The liquidators said it would take more than a year to complete their investigation and wind up the business due to the 'complexity and number of outstanding matters' in the liquidation. Corporate watchdog the Australian Securities and Investments Commission (ASIC) confirmed it was launching an investigation into the fund. The watchdog also confirmed it had launched an investigation into Falcon Capital Ltd managing director David Anderson, who allegedly funnelled funds from superannuation members into his failed property developments and craft breweries. Mr Anderson's assets have been frozen and his passport has been seized as Federal Court-appointed liquidators and investigators sort through financial records. The watchdog alleges $5.6m was deposited into Mr Anderson's ANZ account between June 2022 and September last year 'without any legitimate basis for payments in that amount being apparent to ASIC or disclosed to investors'. ASIC also alleges Mr Anderson used $16,000 to make mortgage payments on his $9m home overlooking the Yarra River. Mr Anderson's legal representative, Dan Mackay of Mackay Chapman, told the ABC last week 'there have been no findings of fact or law by any court or tribunal, nor by ASIC'. 'Mr Anderson will fully exercise his rights in response to allegations which may be made against him at the appropriate time in the appropriate forum,' Mr Mackay said. An ASIC spokesman said its 'first priority has been to preserve any remaining assets of the scheme so they can be recovered for investors'. 'Following concerns raised by ASIC, the Federal Court appointed liquidators to Falcon Capital and ordered the wind up of First Guardian and its related funds in April. The court also restrained David Anderson, a director of Falcon, from dealing with his assets and appointed a receiver to his personal property,' he said. 'ASIC's investigation suggests that potential consumers were called and referred to personal financial advice providers who advised consumers to roll their superannuation assets into a retail choice superannuation fund and then to invest part or all of their superannuation into First Guardian. 'While ASIC's investigation is ongoing, the Federal Court has made interim travel restraint orders against Falcon Capital director David Anderson on ASIC's application. 'The court also made interim orders freezing the assets of another Falcon director, Simon Selimaj, and restraining his travel. Those orders are in place until 27 February 2026.' No charges have been laid. To those impacted, the spokesman said he understood 'the circumstances surrounding First Guardian are distressing for those affected' and it was 'one of ASIC's priorities to investigate what has happened'.
