The total cost blowout for current major defence projects is nearly three times higher than that flagged by Labor last year, according to the auditor-general, with the projects’ combined cost nearly $18 billion over the original approved budget.
In October, Defence Minister Richard Marles accused the former Coalition government of financial mismanagement and a failure of leadership, seizing on defence department advice that suggested project overruns in the order of at least $6.5 billion.
But that figure is at odds with the auditor-general’s 2021–22 report on the country’s major defence projects, released Thursday, which found the approved budget for active major defence projects has swelled by some $17.5 billion as of June 30 last year.
Notably, the $17.5 billion in total cost overruns comes before either the recent $2.8 billion purchase of 40 Black Hawk helicopters or the plans to acquire eight nuclear-powered submarines under the Aukus agreement – which some analysts have predicted will attract costs within the vicinity of $80 billion – have been factored into the budget.
While the auditor-general’s report makes plain external pandemic-related pressures and exchange rate fluctuations explain a portion of the cost blowouts, it suggests the overruns are mainly due to delays associated with the defence department’s apparent indifference to accountability and transparency.
The report notes, for example, that the original budget for the joint strike fighter project has blown out by a net $13 billion, with more than $10 billion of that figure spent on acquiring additional aircraft with little apparent oversight. Similarly, the original 2005-06 budget for the now abandoned MRH90 helicopters increased by nearly $3 billion, with most of those costs tied to the purchase of extra and now redundant aircraft.
Against this backdrop, the report emphasises the department’s failure to act on a suite of parliamentary and auditor-general recommendations dating from 2014, all of which were focused on improving the lack of transparency and rigour that has long presided over defence equipment acquisition.
In the result, the report concludes that the long-standing governance issues and difficulties encountered in delivering “major projects on schedule” remain a challenge for defence.
“Defence’s management of platform availability has contributed to [delays] in some projects [while] projects with developmental content have also experienced significant delays,” it says.
“Defence has yet to implement a consistent measure of capability performance with a robust methodology applicable to material acquisition.”
In a much-publicised move last October, Marles pledged greater transparency over defence acquisitions, including monthly reports on delayed projects of concern, remediation plans and the creation of an independent regulator within the department.
Notwithstanding that, however, Thursday’s report said the government had, for the first time in the report’s 15-year history, failed to supply the auditor-general with all relevant forecast data for the purposes of the report.
Not only did the unprecedented move prevent the auditor-general from detailing the extent of delay attending current defence projects, it also undermined the purpose of the review, which is to afford some level of parliamentary scrutiny over defence spending.
According to the report, some of the data wasn’t supplied on account of certain projects not having a settled forecast date, while defence simply decided against publishing data with respect to three other projects, including the $3.6 billion offshore patrol vessel project.
It’s not immediately clear why defence declined to provide this data, given Marles himself conceded last year that several major defence projects were facing considerable schedule delays.
Beyond this, the report also sounded alarm around the management of underperforming projects, including the MRH90 helicopters, noting at least two auditor general recommendations to improve the way in which defence handles these problems were yet to be implemented.
“There was no evidence that defence [has] established a clear basis or criteria to ensure a consistent approach to entry to and exit from the projects of concern or projects of interests lists, and no evidence of an evaluation was provided to the ANAO,” the report said.
The report indicated the next annual review would assess the extent to which the government implements its flagged transparency and accountability reforms around expenditure.
Trump and Biden both subscribe to the view that we should escalate our Defence spending on behalf of Yank priorities…we pay their defence contractors.Marles is a cypher for all this.Shameful
same as it ever was…same as it ever was
I guess the question is why we would have expected anything different.
Never learning from Lying Nasty Party history, one would expect a Labor Government to have learnt something.
Those so called “wars” which were in fact all GOP “inspired” US military adventures. No declaration of war has ever been been made. Neither here in Australia by the Parliament of the C of A , nor in the USA by the US Congress.
That is SOP of the Lying Nasty Party Ming the Mendacious and The Lying Rodent© Senator George Brandis both of whom wasted the blood and treasure of the C of A with lies in marching lock step on those US military adventures.
And all to what end…hardly the defending of Australia?
Back to history….
“Die Geschichte hat noch nie etwas anderes gelehrt, als dass die Menschen nichts aus ihr gelernt haben.”. Georg Frederich Hegel: Early 19th Century
History has never taught anything other than that people have learned nothing from it:
“Er hat vergessen, hinzuzufügen: das eine Mal als Tragödie, das andere Mal als Farce.” Karl Marx: mid 19th Century
He, (Hegel,) forgot to add this: first as tragedy, second as farce:
“Those who cannot remember the past are condemned to repeat it.” Georges Santayana. Early 20th century
The Viet Nam Farrago in 1955 when Eisenhower deployed the Military Assistance Advisory Group to train the Army of the Republic of Vietnam. This marks the official beginning of American involvement, as recognised by the Vietnam Veterans Memorial.
The Afghan Imbroglio, finshed after 20 plus years was initiated by the previous GOP encumbrance in the White House Dubya The Faux Texan and NeoCon Sock Puppet.
Closely followed by The Iraq Fiasco, which clearly led to The Da’esh Disaster. which further more led to Da’esh fighters moving into Afghanistan, adding yet another group of Islamist to the toxic mix in that country.
“Die Geschichte hat noch nie etwas anderes gelehrt, als dass die Menschen nichts aus ihr gelernt haben.”. Georg Frederich Hegel: Early 19th Century
History has never taught anything other than that people have learned nothing from it:
“Er hat vergessen, hinzuzufügen: das eine Mal als Tragödie, das andere Mal als Farce.” Karl Marx: mid 19th Century
He, (Hegel,) forgot to add this: first as tragedy, second as farce:
“Those who cannot remember the past are condemned to repeat it.” Georges Santayana. Early 20th century
Another great German aphorism.
“Einmal ist keinmal, zweimal sind einmal zu viel.”
Once is nothing; twice is once too often.
I don’t believe DoD is solely responsible for cost blow outs, as wretched as its performance has been. Politicians make decisions based on perceived electoral advantages, the building of submarines in SA a conspicuous example.
Lot of truth in that. Much of what is called ‘defence spending’ is nothing of the sort. It is attempting to buy votes in marginal seats, at an incredibly expensive price for each vote, while simultaneously doing huge damage to Australia’s defence capability by diverting its funding from buying vital equipment and resources. (Australia is far from alone in suffering this affliction of course, the USA’s system for pork-barreling defence funding exposes our shenanigans as amateur and half-hearted.)
As long as we let the US run our defence policy & occupy key staff positions this will continue & escalate.
Labor are too scared to do anything because of what happened to Whitlam.
For a brief moment when Jan 6th occurred, I thought ‘At last, Americans are doing it to themselves’. If there is any chance of our current government ever showing some ‘real spine’, now is the time to do it and stand up to the USA.
Makes one wonder if that old suggestion that bend over and kiss your arse goodbye is the best defence posture. All that money, all that incompetence. What a bunch of muppets they must be in Defence!
Are the ones in Defence the muppets? They seem to be having a very good time with everyone else’s money and they are never held to account. Surely the muppets are the ones letting them continue this decades-long spree?
The appalling incompetence is a learned experience from the Pentagon. With them, US$800+ billion in budget and nobody knows where it goes. We have US retired military embedded in Defence as advisors, on over US$400k pa. Hence the inane BS about China and their non-existent aspirations. The previous defence paper indicated non-nuclear subs are adequate for DEFENCE, capable of efficient inshore land defence, which the wasteful nuclear subs cant do. Gutless governments allow this incompetence. Defence are sailors, FFS, not project managers. I am one. No project of mine would be so poorly accountable.
Yet all we can manage to save Medicare from catastrophe is 0.25bn pa in extra funding!!!