Australia and Singapore will boost economic and defence ties, and collaborate on innovation, under a deal that updates a free trade agreement signed more than a decade ago. Under the agreement announced on Friday, both countries will implement measures to boost trade and investment, while Singapore will pay $2.25 billion to upgrade defence facilities at Shoalwater Bay and Townsville, for use by up to 14,000 troops for 18 weeks each year.

Singapore, which lacks its own space for military training, has long used Australian facilities and under existing arrangements can train up to 6000 troops for six weeks a year. The agreement builds on the Comprehensive Strategic Partnership which was signed last year, and will modernise the Singapore-Australia Free Trade Agreement (SAFTA) which was signed in 2003.

Prime Minister Malcolm Turnbull said the enhanced strategic partnership included commitments to open markets and trade, greater opportunities for Australians trading and working in Singapore, and included a massive investment in defence infrastructure in Australia.

Singapore is Australia’s fifth-largest trading partner, with $28.5 billion in two-way trade.

‘But the business environment has changed considerably since the free trade agreement was first signed over a decade ago so we’re updating trade rules in the SAFTA in goods, services and investment to reflect contemporary business needs, to reduce red tape and increase trade,’ Mr Turnbull said.

The upgrading of the agreement will make it much easier for thousands of Australians to live and work in Singapore, he said.

Mr Turnbull said the freshly sealed agreement would trigger significant investment in Queensland and deepen ties between the two nations.

‘It is a very, very significant commitment to investment in north Queensland,’ he said.

Australia and Singapore have also agreed to promote innovation and entrepreneurship, while research and scientific bodies will work more closely.

The deal also includes new arrangements for Singaporeans travelling to Australia that will give them access to 10-year visas.

Trade Minister Steve Ciobo said the deal was consistent with the coalition’s national economic plan ‘to drive jobs and growth’.

‘We’ve got a long-standing relationship with Singapore. This agreement will actually help to forge people-to-people links, business links, trade ties, as well as defence links with the nation of Singapore,’ he said.