Costly submarine blunders

The wasteful incompetence of the Coalition Government was there to be seen this week, but you would have to look behind lots of flags, jingoism, and brass to see it.

The move by Australia to ditch the French-designed diesel-electric submarines in favour of nuclear-powered ones is an unspoken admission of eight years of bungling.

Three years were lost dithering about trying to decide what was the best way to go in in replacing the Collins Class submarines. Then in 2016 the Turnbull Government made the wrong decision.

Or more correctly, three related wrong decisions. The first was not to use nuclear propulsion. That led to the second decision which was to build from the ground up. And the third mad decision was to build the submarines in Australia.

Now five years has gone as we go back to drawing boards.

And even now the idiocy continues. We are still going to build the submarines in Australia. Australia has little or no nuclear experience other than digging up uranium ore and sending it overseas or allowing the British to do above-ground atomic bomb testing on land stolen from Indigenous people. Plus a small medicine-related nuclear reactor at Luas Heights.

Going nuclear was as obvious eight years ago as it is now. Nuclear subs can stay down longer and are faster and quieter – the very things you need and the very things any competent military adviser would tell a government.

But doing it in Australia, even with US and British help, only makes sense if viewed through the prism of marginal-seat politics. From 2013, with South Australia teetering on the brink of becoming a rust belt because of a collapsing unsustainable car industry ,the Coalition (with a South Australian Defence Minister, Christopher Pyne, at the helm pushed for an expanded ship-building industry in South Australia to take up the slack.

The other political fear was that going nuclear would be a turn-off for many voters. But that fear is probably outdated and is untested.

However, nuclear is one issue, building them here is another. If we really must have these submarines, we should have (and still should) buy them off the shelf, most likely from the US. 

Australia was going to build 12 diesel-electric Attack Class submarines at a cost of at least $90 billion – more than double the original estimate, and cost estimates only go up. Building nuclear ones here will no doubt cost more. We have not been told.

But we could buy 12 Virginia Class nuclear propelled submarines from the US for a total of about $40 billion.

The Collins Class experience was that it took years of perfecting to get a full complement of submarines running. The same extra cost and delay were also a feature of the first five years of the Attack Class program. And no doubt the same will have with the nuclear ones.

We have now spent billions on the Collins replacement and have virtually nothing to show for it. And we will, no doubt, get a hefty cancellation bill from the French.

That bill, together with all the work wasted so far, is going to run to several billion dollars. The Government won’t be telling us how much voluntarily or any time soon. But it will come out eventually through parliamentary committees, freedom of information, the budget process and investigative journalism, despite the Government doing its best to cover up.

One of the astonishing things about this decision is the surprise. The secrecy of the nuclear deal and the dressing it up as part of a new tri-lateral security arrangement simply did not leak, yet to organise it, it must have meant hundreds if not thousands knew about it before the announcement. 

There were a few hints that the Government was dissatisfied with the French Naval Group and what it saw as a lack of progress. But the Naval Group says it has fulfilled everything required of it. I cannot see it doing anything other than claiming the maximum cancellation fee that it can.

And most likely the Australian Government will pay over the odds to get the claim out of the way as quickly and as silently as possible.

This decision should not just be seen as a wonderful new security arrangement to prove that we are standing up to China, or creating a wonderful new industrial capacity. Rather it should be seen as a tacit admission that the whole submarine replacement project has been a costly blundering debacle since the Coalition came to office in 2013.

Turnbull’s words when he announced the decision in 2016 ring hollow now: “The competitive evaluation process has provided the government with the detailed information required to select DCNS [now the French Naval Group] as the most suitable international partner to develop a regionally-superior future submarine to meet our unique national security requirements.”

Pah.

The other thing about this massive spend is that of all government spending, military spending has about the lowest beneficial multiplier effect. If you want a package to build Australian industry, military spending is about the worst way to go about it.

A better way is to get your military hardware as cheaply as possible and spend the savings on more worthwhile and productive things.

The money building a defence industry in South Australia has been a monumental waste.

The bizarre thing is that despite decisions like the submarine one in 2016 and the $13 billion failure to properly monitor JobKeeper, the Coalition still claims that it is the better economic manager and that Labor is the party of wasting taxpayers’ dollars.

And here the Coalition goes again – opting to build military hardware in Australia. Has nothing been learnt?

The smartest thing a Coalition Defence Minister ever said was David Johnstone’s 2014 comment about whether the Adelaide-based Australian Submarine Corporation should build the Collins replacement. He said: “I wouldn’t trust them to build a canoe.”

Crispin Hull

This article first appeared in The Canberra Times and other Australian media on 18 September 2021.