Tony Abbott accused the country of failing to build or design any new models for the past two decades. He made the comments on Friday as his government invited France, Germany and Japan to compete to build new submarines on Friday.
“The last Australian submarine came off the production line in about 2001…the last Swedish submarine came off the production line in 1996, so it’s almost two decades since Sweden built a submarine,” said Abbott.
Swedish defence company Saab has previously expressed a strong interest in building the submarines alongside Adelaide-based Australian shipbuilder ASC.
The firm has defended its work, saying it is about to embark on building Sweden's next-generation submarine and has the core skills needed for the market.
“Saab has delivered six submarines since 1996, the latest of which was commissioned in 2013. All involved significant numbers of design and production engineers with the same skills used in any new submarine build process," Gunilla Fransson, the head of Saab defence and security, said in a statement initially published by the UK's Guardian newspaper.
"Saab is also currently approaching the end of a detailed design phase for Sweden’s next generation submarine and is about to enter into the production phase.”
Saab took over as Sweden's flagship submarine manufacturer in 2013, after buying Kockums, which was previously owned by a German parent company ThyssenKrupp Marine Systems (TKMS). The move followed claims that TKMS had deliberately attempted to stall progress at Kockums because the larger firm also owned German submarine maker HDW, a direct competitor.
As tensions between Sweden and TKMS grew, Swedish goverment agency Swedish Defence Materiel Administration (FMV) even carried out a dramatic raid on the Malmö shipyard belonging to TKMS.
It was claimed that the raid was prompted by fears that information about a new engine being built there could end up in the wrong hands after talks of a potential submarine deal between the government and TKMS came to an end.
Sweden is one of the few countries in the world currently developing a next-generation submarine, and Saab has previously said that "a partnership would provide Australia with an opportunity to have an advanced submarine which meets Australia’s unique requirements."
Australia is looking to build 12 submarines that feature similar long-range features to those already used by the Australian navy, but with superior stealth and sensor performance.
On Monday Defence Industry Minister Martin Hamilton-Smith said the South Australian government would appeal for Saab Kockums to be re-included in the process.
“We are extremely concerned that the Swedish model, without adequate explanation, has been excluded," he was quoted as saying by The Australian newspaper.
“This all goes to creating the perception that this entire process is not truly competitive, is not truly open and is somehow rigged. Why has the Swedish option been excluded when we have, in the water now, six of the most lethal submarines on the planet…you can’t claim to be having an open process when you rule people out before they’ve even had the chance to reach the start line."