When John Faulkner took over from Joel Fitzgibbon as Defence Minister last month, he must have realised this would be one of the biggest challenges of his political career.
During the Howard years, the senior powerbroker from the ALP’s Left faction made a name for himself forensically cross-examining terrified bureaucrats in Senate estimates hearings. In government, Kevin Rudd drew on this experience and gave him a special brief to improve open governance procedures, including freedom of information laws. The jury is still out on whether the Rudd Government will indeed be more open than John Howard’s, but Faulkner certainly made an impressive start.
Now the man with the boldest glasses since Yves Saint Laurent has been given the toughest portfolio in government. As we’ve argued a number of times here at newmatilda.com, Defence is almost a government in itself. The Defence Department is the nation’s largest employer and largest landlord. It manages a bewildering array of complex acquisition projects and of course maintains a massive range of assets and equipment — everything from low-tech rifles and grenades to cutting-edge signals and intelligence technology. And, of course, Australia is still fighting a war in Afghanistan.
But Defence also has some of the nation’s worst accounts. If it were a corporation, it would have long been mired in an Enron-style accounting scandal. Defence’s books are a mess; the Commonwealth Auditor has regularly refused to sign off on their veracity over the past decade. Acquisition projects routinely run years and billions of dollars over budget; some prospective acquisitions, like the Navy’s cancelled Super Seasprite helicopter, failed basic tests such as flying over water.
After promising beginnings, Joel Fitzgibbon soon proved out of his depth in Defence, militarily as well as politically. Faulkner is a different kettle of fish. And he has another of the Rudd Government’s savviest operators, Greg Combet, to assist as his junior minister. Even with a couple of hard-nosed political operators in charge, however, managing Defence is always tough.
The release of yesterday’s Defence Capability Plan shows why. This $60 billion document purports to explain how taxpayers’ money is going to be spent for the next four years. It claims 5000 jobs will be created across 110 major projects.
It’s a daunting list of spending programs. Big-ticket purchases in the plan include the Navy’s three new Air Warfare Destroyers, down-payments on 72 F-35 Joint Strike Fighters for the Air Force, and new artillery for the Army. Also on the list are upgrades for the C-130 Hercules transports, a replacement for the P-3 Orion maritime reconnaissance planes, various battlefield data and communications projects and first-stage funding to build a "future submarine" to replace the Collins class boats.
What’s new about this Defence Capability Plan is its time-frame and detail. Previous plans stretched over 10 years and gave much less detail; this plan spans only four years and provides more information. The result is closer to a detailed list of government acquisition plans, whereas the old plans were more like a vague wish-list of future platforms which grossly underestimated spending requirements.
Even so, the new Defence Capability Plan shares many of the Defence’s age-old problems. To begin with, it’s a plan to buy the wrong things. Informed by the recent White Paper, the Defence Capability Plan sets out to purchase weapons systems and platforms that Australia probably won’t need in future conflicts, or that are ill-adapted to the real threats our nation faces.
Take a look at the three biggest items on the shopping list: the Joint Strike Fighters, the Air Warfare Destroyers and the future submarines. Each of these weapons systems is effectively a high-stakes bet on the shape of future conflict, as they will be of little use in the kinds of small wars Australia is currently fighting and is most likely to be involved in through the next generation. The role of submarines has historically always been about sinking merchant shipping, not defending sea lanes; the Joint Strike Fighter is likely to be far less effective at its stated role as a fighter-bomber than a much cheaper flight of pilotless drones (and no match at all for air superiority planes like the F-22 Raptor or the latest generation of Russian-built Sukhois), while the Air Warfare Destroyers will be almost useless at doing what they’re supposed to do, which is to defend a naval expedition from missile attack.
Can Australia afford these new toys at all?
It’s a question worth asking given the scale of the Rudd Government’s deficit spending over the next few years. Unlike the cash-splash elements of the stimulus package, defence acquisition spending generates proportionately less economic growth; much of the money goes straight to big US defence firms like Boeing and Lockheed Martin. The latest Treasury papers have stated that Defence will be quarantined from Labor’s plans to hold Government spending at only 2 per cent growth after 2011–12; but even with tens of billions of dollars budgeted to flow to Defence for acquisitions and expansion out to 2018–19, the numbers still don’t add up. Chief financial officers at other public institutions like hospitals and universities would be astonished to discover that on budget night, Defence couldn’t even explain its spending projections or where its billions of planned "savings" would come from.
Even in this new Defence Capability Plan, many projects still have costing estimates of figures such as "$100–$500 million" — in other words, there are billions of dollars worth of wriggle-room across the whole plan. Historically, of course, projects rarely come in at the lower end of such estimates, and all too often exceed even the upper projection. A recent example is the RAAF’s Wedgetail radar planes, which are running years behind schedule owing to problems with Boeing’s plane and the software for the radar domes.
It’s a sobering thought that Australia’s long-awaited paid maternity leave scheme will cost just $146 million annually, yet is being delayed until January 2011 because of budget pressures. $146 million is a rounding error when compared to the Defence Capability Plan.
It’s hard not to conclude that under John Faulkner and Kevin Rudd, just as under Brendan Nelson and John Howard, guns are more important than mothers.
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