The criticism is contained in the Australian Strategic Policy Institute’s annual review of the federal defence budget, and comes a week after the Federal Government announced its $89 billion naval shipbuilding plan – an event that sparked another series of political squabbles between Canberra and South Australia.
Ironically, the analysis itself may add to the political arguments. It says the shipbuilding plan hints at a delay to the start of the future frigate project, which would mean that jobs at ASC in Adelaide would “dwindle to a couple of hundred people in the period immediately prior to 2022”.
The institute’s budget brief, prepared by senior analyst Mark Thomson, argues that the Federal Government’s current plans will “only strengthen Australia’s defences slowly” and more urgent action is needed in the face of gathering global security storm clouds.
“In case you’ve missed it, the world is going to hell,” Thomson writes.
“In January this year, a report from the normally staid US National Intelligence Council pointed to ‘deep shifts in the global landscape that portend a dark and difficult near future’.”
The same report warned that the next five years would see rising tensions within and between countries, coupled with a slowing of global growth and an increase in complexity. The shifts could lead to the end of American dominance and, perhaps, the rule-based international order that emerged after World War Two.
“Yet we continue as if it’s business as usual, squabbling about whether defence industry jobs will be created in one electorate or another,” Thomson says.
“Current plans will only strengthen Australia’s defences slowly. For example, the first of our aptly named ‘future submarines’ won’t enter service until the early 2030s, and we won’t have twelve boats until the early 2050s.
“We need to do more, and we need to do it now.”
He questions whether the “jobs and growth” approach to defence policy has gazumped a focus on security.
“The worst part of surrendering defence policy to the political imperative of ‘jobs and growth’ is that we’ve taken our eye off the ball at what might be a critical time.”
Thomson says that while the naval shipbuilding plan, announced in Adelaide last week by the Prime Minister Malcolm Turnbull, contained some useful information, there were also “many unknowns that will only be resolved by future decisions”.
Some of the scheduling information “did not make sense” and there was “a hint that the future frigate project will be delayed”.
“On the critical question of contractual arrangements, we remain in the dark.
“Finding a way to drive value-for-money in the monopoly shipyards that are being created is a key challenge that government is yet to address.”
The plan confirmed that the Commonwealth would own the naval shipbuilding infrastructure in South Australia and Western Australia – the two biggest beneficiary states.
Under the plan, Adelaide will host the future submarine project, beginning in 2022-23, as well as the future frigate project, beginning in 2020. The offshore patrol vessel project will start at Osborne in 2018, before transferring to WA after two years when the frigate program begins.
However, Thomson’s report says the shipbuilding plan casts doubt on the start date for the frigates.
He says the in-service date for the first frigate – 2027-30 – is four years later than the date cited in the RAND shipbuilding report, which formed the basis of the government’s plan, despite the RAND report also giving a 2020 start date.
He suggests the 2020 start date was a johnny-come-lately idea to avoid the so-called “valley of death” at ASC.
“It looks as though the rumoured late start to the frigate program has been quietly slipped into the plan,” Thomson says.
“A delay to the start of the frigate program wouldn’t be surprising. As recently as mid-2014, Defence’s own planning documents show an intent to commence construction in 2022 – with the intervening period fully used adapting the chosen design to carry the designated Australian radar. A 2020 start date was only imposed in August of that year, with the goal of averting the dreaded ‘valley of death’ at the ASC shipyard in Adelaide.”
He warns that if the project’s start is indeed delayed, jobs projected in this period will “disappear”.
“Clearly a 2022 start date would mean that the ASC shipbuilding workforce would dwindle to a couple of hundred people in the period immediately prior to 2022.”
A spokesperson for Defence Industry Minister Christopher Pyne said “the Government’s plan is on track and we are determined to keep it that way”.
“ASPI has provided a very detailed report and the Government will be looking at it closely,” he said.
“The Turnbull Government is committed to the largest expansion of Australia’s military capability since the Second World War, and of course it will be challenging.
“We are determined to build up our defence industry and increase out sovereign capability as this will ensure we are best placed to meet the global challenges our country will face for decades to come.”
Turnbull last week described the shipbuilding plan as “the largest single Commonwealth investment in any single state”, which would ensure thousands of jobs in high-tech industry, including 5000 direct shipbuilding jobs and 10,000 in sustainment.
The “continuous” shipbuilding program will produce 12 submarines, nine frigates and 12 offshore patrol vessels, as well as 19 Pacific patrol boats to be given to neighbouring countries.
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