In 2002 the Howard Government made the decision to purchase up to 100 Joint Strike Fighters (JSF) from the United States of America, making it the largest single defence purchase in the history of Australia. Now, a decade on, the JSF program is struggling to deal with major flaws in capabilities and the project is at least 5 years behind schedule. And to top it all off, the original cost of the jet has gone from $40 million each to almost $130 billion dollars per aircraft.
The troubled JSF program was the subject of a Four Corners documentary on Monday night which shows that the problems surrounding the construction of the plane are continuing. When it all boils down, the same questions are being asked about the program that have been for years now. But the questions become even more relevant with every mishap and every delay in the delivery of the Joint Strike Fighter.
The overriding question is: Should we have purchased the fighter jet when we did? But the situation involving the procurement of the JSF is far more complex. Another important question is: Should we have put the purchase of new aircraft out to tender? The final very important question is: Would a tender process have improved the situation?
There is absolutely no question that the decision is a budgetary disaster, with the cost per aircraft ballooning by about $90 billion dollars. We have had to purchase 24 Super Hornets as interim aircraft while we await the delivery of the F-35. Due to domestic budgetary constraints we have delayed delivery of twelve of the aircraft, but those delays will be trumped by the design delays.
In short, the government should not have made the F-35 procurement decision when they did. The decision to purchase was made too early and, according to a former Defence official interviewed by Four Corners, based on a reportedly persuasive conversation former ADF Chief Angus Houston had with a defence official from the United States of America. The government should have waited until there was more concrete information on the aircraft. Word of mouth is not particularly strong grounds for making decisions about buying new military capabilities.
The question of a tender process is both simple and complex. It is simple in the sense that a tender process would have been the most prudent option for what was the most significant single defence purchase made by an Australian government.
A formal tender process would have given Australia options, even if the JSF still turned out to be the most sought after option after competitive bidding. More importantly, there would have been greater oversight of the decision-making process. Competitive bidding would have also driven down cost somewhat and that would have been helpful given the cost blowout over the last decade.
But the shambles that is the F-35 purchase might not have been avoided under a competitive bidding regime. What we are dealing with is, above all, a manufacturing and design problem. There is absolutely no guarantee that competition in the bidding process would have meant the absence of flaws in the aircraft’s design. In fact, we can be certain that a bidding process would have had no impact on the design of the plane.
The distinct lack of process is striking when it comes to the Joint Strike Fighter. Even without knowing what the documentary revealed, we should acknowledge there have been problems with the procurement of the JSF. We should have started a tender process leading up to the 2002 decision which still could have been made. We would have saved some money, but could have easily encountered the same problems unless we had bought an aircraft already under production.
The funny thing is, for all the extra money and time, we should still end up with a very advanced air capability at the end of the drawn out process – providing the technology is not superseded.
Today the Opposition Leader revealed a broader outline of defence policy for an incoming Liberal National Party Coalition Government, some of it firm commitments, some of it aspirational. That’s the thing about administrations of the right side of the political spectrum, there’s always space in the budget, no matter how tight or how far in deficit the fiscal position is. It’s all about appealing to the need to feel secure, that we’re being looked after and protected by a strong government from nasties within and external to the country. Of course a firm level of defense is always required, but conservative governments like to go a bit further to say the least.
First, in terms of looking after those who have been in the Australian Defence Force, rather than in terms of security, the Coalition, after fairly prominent debate has decided it necessary to “properly” index military pensions. This would happen in the first year of an Abbott Government and, if based on the template of the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill, would cost about $1.7 billion over 4 years.
In terms of existing spending commitments, Mr Abbott today said in his speech to the RSL National Conference that within 18 months of taking government, the Coalition would look at a timetable for the acquisition of the troubled Joint Strike Fighter. This is not something to rush into and is a project area where other nations are being increasingly cautious.
One of the first defence capability purchases that the Coalition would make would be a fleet of unmanned aircraft. Mr Abbott said that these capabilities were necessary, especially to provide surveillance over business projects 0n the North West Shelf as well as searching for those pesky asylum seeker boats.
Despite the pledge to immediately purchase drones, Mr Abbott today announced that submarine capabilities are the “probably the most urgent big procurement decision” the government needs to make. These would replace the Collins Class fleet purchased under the Howard Government. Presumably the announcement of submarine construction, to be based in South Australia, means that the Coalition would continue, at least in part, with Labor’s $40 billion pledge to build 12 new submarines
To get a broader look at the needs of the ADF, again, the Coalition would, within 18 months of taking office, proceed with another defence white paper. That means just a year to 18 months after the 2013 defence white paper is released, there will be another one. Surely that one is likely to say exactly the same thing as the one released in 2013. Defence capabilities simply don’t change and evolve that fast, though security challenges can, but this is unlikely, especially with the winding down of the Afghan conflict and future challenges, a term used very loosely, like the rise of China and India firmly in mind.
Finally, there’s an aspiration to grow the defence spend by 3% yearly, once the budget is back in order, surplus, to keep on top of perceived defence materiel and other needs of the broader defence organisation.
So where’s the money coming from? Well, supposedly room will be made in the frontline capabilities budget by making changes, a purge of backroom bureaucrats. This might make some savings, but would in no way go anywhere close to the budgetary savings necessary to accommodate such significant and ongoing funds.
So what else would have to go from the federal budget? Health? Education spending? Maybe that big paid parental leave scheme the Coalition holds onto? Well, most of the priorities are aspirational, so perhaps these departments can take some solace, at least that defence spending might not result in a cull of their staff and programs.
The freed up spending from the planned return of combat troops from Afghanistan though will provide some not insignificant room in the budget of a future government. As a consequence, some of these aspirations might become a reality.
There’s always more money for defence, of course.