When Defence Becomes Its Own Worst Enemy


All is not well in Australia’s military-industrial complex.

The Australian Submarine Corporation, or ASC, is the company which built the six Collins class submarines under a licence from Swedish shipwrights Kockums. The boats, initially plagued by teething problems, eventually came to be considered among the quietest and most dangerous submarines in the world.

But now they’re struggling again, plagued by further maintenance difficulties. Earlier this month, the Navy announced that four of the Collins-class subs were being tested for the heavy metal contaminant cadmium. The cadmium scare is believed to be a key factor keeping at least three of the boats from being properly deployed, according to recent news reports.

Defence Personnel Minister Greg Combet told reporters that "it’s a serious issue and we are taking it seriously and ensuring that the safety of the submariners and maintenance workforce is our top priority."

"We are doing the sampling and testing at the moment on the subs and we will do all of the subs as soon as practicable to identify the extent of the hazard and the best mechanisms for cleaning it up and containing it in the future."

ASC’s board and management are apparently not getting on very well with Combet, who has had his work cut out trying to manage the enormous procurement and budgetary issues of Australia’s brisk arms build-up. In May, the CEO of ASC, Greg Tunny, quit after falling out with the Defence Materiel Organisation’s boss, Stephen Gumley. Gumley had ordered an external audit of the ASC’s performance in servicing the submarines, a move that prompted the ASC’s Chairman John Prescott to complain to Prime Minister Kevin Rudd.

As the former Secretary of Defence, Paul Barratt noted in April on his blog, "the problem for DMO is that all roads lead back to ASC. As well as being the Government’s submarine builder and maintainer, it is the design authority for the Collins class submarines — it has the last word on configuration management, maintenance regimes etc. Every change in the configuration of the submarine or the way it is maintained must be signed off by ASC."

And therein lies the crux of the issue for the Government. The problems of ASC are not just a headache for Greg Combet, in this Parliament. They are potentially a big problem for all future Australian governments. This is because ASC, as Andrew Davies explained in a 2008 Australian Strategic Policy Institute paper, is the only credible builder of Australia’s next generation of submarines, a $25 billion project that will be more costly even than our planned purchase of F-35 Joint Strike Fighters .

In the meantime, ASC is building the Navy’s other big ticket acquisition, the $8 billion Air Warfare Destroyers. These large and capable ships are the modern equivalent of battle-cruisers and will need to integrate highly sophisticated weapons systems like the AEGIS radar array and missile defence system. As Davies notes in his paper, "the Air Warfare Destroyers that result will be more expensive than others on the world market … Swapping from submarine work to other projects and back again may introduce significant inefficiencies."

Inefficiencies are par for the course in defence spending. Remember the Super Seasprite helicopter? This project was cancelled at a waste of $1.3 billion after 10 years. Despite being designed to operate from frigates, the helicopters couldn’t fly over water. The Navy is still searching for a replacement.

The problems inherent in building highly complex military hardware are legion. This is why analysts have consistently argued that the numbers budgeted for Australia’s ambitious White Paper goals simply don’t add up. Davies pointed out that "’the most comprehensive White Paper of the modern era has been followed by the least comprehensive Defence budget papers of the past decade." Barratt agrees, calling the notion that $20 billion could be wrung from forward Defence budgets "an impossible dream".

It’s worth noting that the original coiner of the term "military-industrial complex" was in fact a soldier himself: US President Dwight D Eisenhower, in a speech to the American people just before he left office. Having commanded the Allies in Europe against Nazi Germany and watched his nation build the greatest war machine in the history of humanity, Eisenhower expressed his misgivings over the potential for this new entity to get out of control from a position of considerable knowledge.

While the political consequences of the military-industrial complex have proved less far-reaching than many on the left have forecast, the decades since Eisenhower’s death have seen the steady and gradual capture of the Pentagon by the industrial corporations that supply it. The result, ironically, has been weapons systems so colossally expensive that even the United States is struggling to afford them.

Take the F-22 Raptor, called by Australia’s commander-in-chief Angus Houston (himself a former RAAF pilot) "the most outstanding fighter plane ever built". This superb dogfighter is more than a match for any other plane flying — so advanced, in fact, that the US still refuses to sell it even to close allies such as Australia and Japan.

The Raptor is also a case study in how high-tech military gear can set new standards in cost blowouts and inefficiencies. The Pentagon originally commissioned the F-22 in 1981 as a next-generation fighter plane to ensure air dominance over the Soviet Union. But, as noted US defence writer Fred Kaplan pointed out recently, "the first operational F-22 didn’t roll onto a runway until the end of 2005, after nearly a quarter century of delays, technical setbacks, and massive cost overruns. By that time, the Cold War was long over." The US ended up spending $60 billion to acquire a total of only 187 planes.

This led US Defence Secretary Bob Gates to cancel further orders for the F-22, pointing out that they have never been used in either Iraq or Afghanistan, suggesting that their air superiority role isn’t actually that necessary (indeed, no US serviceman has died as a result of an enemy aircraft attack since 1951). Gates has had to fight a massive battle in Congress against the many backers of the Raptor, which has components manufactured in nearly every state of the US, and strong backing therefore from many local politicians determined to be seen winning as big a slice of the defence budget for business in their electorate as they can.

In fact, so powerful have military contractors become, former US budget bureaucrat Gordon Adams argues that it was the decision of Lockheed Martin itself that finally sealed the F-22’s doom. Lockheed Martin has decided not to lobby strongly against the Raptor’s cancellation, and will instead ramp up for the far more lucrative proposition of the F-35 Joint Strike Fighter production, even though the F-35 is considered by most to be a far inferior plane.

Australia’s military-industrial complex may not be as big, but it is still significant. Victoria and South Australia played serious politics in their fight to be the building site for the Air Warfare Destroyer.

Indeed, South Australia is betting big on defence, as I observed early last year. As the auto industry continues to stagnate, Mike Rann and his government are banking on the big military contracts to renew the state’s manufacturing base. It’s a kind of "military Keynesianism" that will be familiar to historians of California and the Ruhr. But South Australia’s plans to become the "defence state" could run into serious trouble if Canberra’s puts its chequebook away.

After all, the looming problem, as ever in defence spending, is how to pay for it all. This shouldn’t surprise us. Arms build-ups have always imperiled the fiscal health of nations. Among other things, it was the decision by Louis XVI to embark on a massive naval arms race with Britain in the 1770s and 1780s that led to the bankruptcy of the French ancien regime. We all know what happened after Louis asked the estates general for more taxes.

Given all of Kevin Rudd’s other spending commitments, just how realistic are Australia’s military ambitions? As it stands now, no analyst thinks Australia’s Defence Capability Plan is credible. Until the expectations of our military match the reality of the funds available, expect to see plenty more problems for companies like ASC and other links in the procurement chain.

Ben Eltham is New Matilda's National Affairs Correspondent.