Shipbuilders buoyed by long-term plan

South Australia's naval ship-building industry finally has wind in its sails, and submarines may be just over the horizon.

Shipbuilders have welcomed the federal government's announcement of a $40 billion, 20-year continuous naval ship-building program that will centre on Adelaide.

And Premier Jay Weatherill says the state is now better placed to build Australia's next generation of underwater vessels.

Mr Weatherill believes the move to a continuous build of warships to cover the Navy's future needs has strengthened Adelaide's case to be the home of submarine construction.

"We've always said that it's necessary to have both surface ships and submarines as part of a naval shipbuilding program," he said.

"(This) creates the continuity and jobs that workers here in this state and around the nation want."

In a major boost to SA's flagging labour market, Prime Minister Tony Abbott said construction of new frigates would start in 2020, lifting SA's ship-building workforce to about 2500.

"The fundamental thing we have done today is to ensure we don't just have a ship-building Australia, but a fleet-building Australia," Mr Abbott said.

"We've got major ship-building facilities here in Adelaide - this is where the bulk of the work will be done."

Shipbuilder ASC, which is based in Adelaide, said the announcement recognised the state's defence shipbuilding capability.

"ASC has long been an advocate for a continuous build of naval warships to minimise the effects of the stop-start nature of the industry," the company said in a statement on Tuesday.

"By building naval ships and submarines in succession it is possible to apply the lessons learnt and lower costs and increase productivity with each successive vessel built."

ASC is now building Air Warfare Destroyers for the Navy and is poised to take on future construction work under the government's plan.

South Australia's peak defence industry body, the Defence Teaming Centre, said a long-term shipbuilding plan would promote investment in technology in the industry.

But chief executive Chris Burns said uncertainty still remained over whether future submarines would be built in Australian shipyards.