The current Government is no doubt caught between a rock and a hard place on this one, on the one hand the Def Min has made positive comments about seeing this project through to completion and has certainly been talking positive on creating the environment for a sustainable Naval shipbuilding industry (no doubt we have to wait and see what the DWP says about how they plan to achieve this), but there are other concerns too.
Those concerns are comments made by the Def Min in the last couple of days, see below:
Defence Ministers » Joint Media Release – Minister for Defence & Minister for Finance – Air Warfare Destroyer program still fixing serious legacy issues – 22 May 2015
The relevant paragraph is:
The most reliable estimates now suggest that the project will require an additional $1.2 billion to be completed, which will have to be funded at the expense of other Defence acquisitions.
And this one (don't need a subscription to read this one):
Cookies must be enabled. | The Australian
The relevant paragraph is:
“I’ve got a budget and if I spent it on one thing I can’t spend it on another.”
So what is the other capability (or capabilities) that is heading for the chop to free up funding for the completion of the AWD project? One can only guess!!
Despite what we all may or may not think of this current Government and the people in charge of it, I think it's pretty fair to say that up to this point Defence funding has done pretty well. Whilst we can all complain about various aspects of the last two Federal Budgets in a general sense, Defence has had an increase in funding two years in a row and the forwards estimates look pretty good too, and of course the commitment to get to, and stay at, 2% of GDP by the mid 2020's.
What the Def Min said (in my opinion) is fair, he has a budget to work within and if extra money has to be spent on one thing, well something else has to give, and that is despite increases in overall Defence spending. The bucket of money available for Defence is not endless, its not bottomless, and as a taxpayer, it shouldn't be endless and bottomless too!
And that's why I'm always in two minds about Naval shipbuilding here in Australia, sure I want to see a sustainable, and more importantly effective, Naval shipbuilding industry (a 'fair' premium for building locally is acceptable too), but still, at what cost? To me the needs of the RAN comes first, get the right equipment, on time and on budget, and if at times those 'needs' of the RAN are best served by an overseas acquisition, well so be it.
If we look at aircraft acquisitions for the RAAF (Navy and Army too), no one seems to bat an eyelid when the Government announces that tens of billions of dollars are going 'offshore' to be spent on the purchase of equipment such as: F/A-18F, EF-18G, F-35A, C-17A, P-8A, Triton, MH-60R, CH-47F, etc, direct for overseas production lines (sure we get a few crumbs back for our aerospace industries), but we all say, great FMS acquisition! Just the capability the ADF needed!
Don't get me wrong, I'm not against a viable, sustainable and cost effective Naval shipbuilding industry (even with a 'fair' premium attached to it too!), but I do get worried when far more money is being expended that was planned and when it appears likely that some other important Defence capability is going to get the chop, then I start to worry.
Does this mean the end of replacements for the LCH? Does it mean less capable and a lesser numbers of OPV's? Does it mean less capable and potentially lesser number of Collins and Anzac replacements? Or does it mean the RAAF doesn't get no's 9 and 10 of the C-17A's or that no more KC-30A's are procured? And what price does Army pay too?
Hopefully, when we see the new DWP, the Government does find a way to 'minimise' this explosion in cost for the AWD project and can still provide the RAN (and ADF generally) with all the capabilities that are needed and we don't look back and say "well that $10B sure bought us three very nice capable AWD's, but pity about the other capabilities that we had to forgo to help pay for them!"
Cheers,