Henderson Defence Precinct: Opportunity meets workforce risk

On 24 August 2026, the Australian and Western Australian Governments announced the selected site and boundary for the Henderson Defence Precinct, a major milestone for the AUKUS submarine program and continuous naval shipbuilding in Western Australia. Backed by an initial $12 billion Commonwealth commitment, the precinct is projected to support around 10,000 direct jobs and generate substantial construction and infrastructure work over the next two decades. But with defence tipped to become WA’s second-largest industry after mining, businesses across the supply chain face a tightening labour market as the sector competes head-on with resources for skilled workers.

The announcement

The Australian and Western Australian Governments have confirmed the site and boundary for the new Defence Precinct at Henderson, south of Perth, marking a significant step in the delivery of Australia’s AUKUS commitments. The site layout identifies the preferred location for naval shipbuilding and sustainment activities, and for the sustainment of Australia’s future conventionally armed, nuclear-powered submarines.

The precinct will host construction and maintenance of key Australian Defence Force capabilities, including the Royal Australian Navy’s future general purpose frigates and the Australian Army’s landing craft, alongside contingency docking and depot-level maintenance for nuclear-powered submarines operated by Australia, the United States and the United Kingdom. Facilities are expected to include graving docks, a modern surface fleet sustainment yard and expanded shipbuilding capacity, complementing the Osborne Naval Shipyard in South Australia and existing operations at HMAS Stirling.

The site selection follows a $12 billion initial Commonwealth funding commitment announced in September 2025, with early independent planning suggesting total infrastructure costs across the precinct could reach around $25 billion. The program now moves into a concept design phase, involving further engagement between the Commonwealth and WA Governments, local industry, traditional owners and community stakeholders. Defence has already appointed Bechtel Infrastructure Australia Pty Ltd to lead master planning, with AECOM Australia Pty Ltd engaged to undertake site characterisation studies across the Cockburn Sound region.

A significant infrastructure and construction opportunity

The confirmed site layout is a clear signal for a substantial pipeline of construction, engineering and infrastructure work. Beyond the core defence facilities, the development is expected to generate demand for early and enabling works, marine and civil construction, housing, schools, transport upgrades and utilities to support the workforce and communities that will grow around the precinct.

The scale of the commitment, and the Commonwealth and WA Governments’ stated intention to move at pace through the concept design phase, means businesses positioning for subcontracting, supply chain and delivery partner roles should engage early. Existing prime and delivery partners, including Austal, Civmec and BAE Systems, already operate within the surrounding Australian Marine Complex, and the precinct’s build-out is likely to create further opportunities as major contracts for design, construction and site works are progressively released.

Both governments have indicated a focus on minimising disruption to existing local business operations, including non-defence industry, as delivery progresses. Businesses currently operating in or adjacent to the precinct footprint, including in the resources and marine services sectors, should watch the concept design and consultation process closely, as boundary and land use decisions may affect existing leases, access and operations.

The workforce constraint: competing with the resources sector for talent

The other side of this opportunity is a genuine and growing workforce constraint. The WA Government has been explicit that its ambition is for defence to become the state’s second-largest industry within a decade, trailing only mining and resources. That means the Henderson build-out, together with related AUKUS and naval sustainment activity, will be competing directly with an already resource-constrained WA labour market, and in particular with the resources sector, for the same pools of tradespeople, engineers, project managers and technical specialists.

This is not a hypothetical risk. Reporting around the announcement has highlighted federal government engagement specifically directed at protecting WA’s resources sector from disruption caused by AUKUS-related activity, reflecting recognition at a policy level that the two sectors will be drawing from the same labour and contractor base. For employers, this raises immediate questions around workforce planning, retention strategy, remuneration benchmarking and the use of skilled migration, apprenticeship and training pathways to expand the available labour pool rather than simply compete for it.

From a construction and project delivery perspective, businesses tendering for or planning around Henderson-related work should factor labour availability and cost escalation risk into program timing, contract drafting and workforce mobilisation planning from the outset. Enterprise bargaining strategy, sponsored visa planning, and coordination with the tertiary and vocational education sector flagged by Defence as part of the precinct’s long-term workforce pipeline will all be relevant considerations as the concept design phase progresses and delivery contracts begin to be let.

Legal considerations to watch

As the precinct moves from site selection into concept design and, eventually, delivery contracts, a number of construction law issues will become live for businesses in the supply chain. These include how risk is allocated in head contracts and subcontracts over a project of this scale and duration, security of payment and adjudication rights under WA’s statutory payment regime, and the particular features of Commonwealth and Defence contracting, including probity requirements, personnel security clearances and export control considerations given the AUKUS and nuclear-powered submarine content. Extension of time and variation risk will also warrant early attention given the project’s likely multi-decade delivery horizon, as will the interaction between construction timelines and any native title agreements or environmental approvals affecting the precinct footprint.

On the employment side, the competition for labour between the defence and resources sectors raises practical issues beyond general workforce planning. These include the terms on which enterprise agreements are negotiated in a tight labour market, the potential relevance of restraint of trade and non-solicitation clauses as employers seek to protect their workforce from being drawn to competing projects, and how skilled migration pathways can genuinely expand the available labour pool rather than simply redistribute a fixed one. Defence security clearance processing timeframes are also a practical constraint distinct from general labour scarcity, and work health and safety obligations will need to account for the additional complexity of nuclear safety and radiological protection requirements associated with the submarine sustainment component of the precinct.

These issues will need to be worked through as the concept design phase progresses and further detail becomes available on contracting structures and workforce initiatives. Businesses should begin turning their minds to them now, particularly in relation to bidding strategy, workforce planning and contract terms for any work connected to the precinct.