{"id":376,"date":"2012-07-30T09:32:02","date_gmt":"2012-07-29T23:32:02","guid":{"rendered":"http:\/\/www.aspistrategist.ru\/?p=376"},"modified":"2012-08-02T11:59:18","modified_gmt":"2012-08-02T01:59:18","slug":"what-are-we-to-make-of-the-new-defence-capability-plan","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/what-are-we-to-make-of-the-new-defence-capability-plan\/","title":{"rendered":"What are we to make of the new Defence Capability Plan?"},"content":{"rendered":"

Having announced its intention to publish a new Defence White Paper in the first half of 2013, the government has now taken the curious step of issuing a new Defence Capability Plan (DCP). That is, a new schedule for the approval of defence acquisition projects over the next four years. What\u2019s curious is that a new DCP is normally the outcome of a Defence White Paper, rather than a precursor.<\/p>\n

What\u2019s more, given the short time since the substantial cuts to the defence spending in the May budget, the new DCP is at best a quick and dirty shoehorning of existing projects into the much-reduced funding envelope that\u2019s available over the next four years. Moreover, how can the government be developing a new Defence White Paper but already know what capabilities it wants to pursue over pretty much the entire life of the document?<\/p>\n

Logically, there are three possibilities; either the new DCP is worthless, the next White Paper is pointless, or both. Let\u2019s hope that it\u2019s the first of those options. The worst outcome would be a White Paper that ex facto<\/em> justified the hastily cobbled together DCP.<\/p>\n

In the meantime we have a new DCP to pore over. I\u2019ll leave it to others to divine the implied shifts in strategy which the projects that have been included and excluded might imply\u2014I\u2019m not sure that strategy has much to do with Australia\u2019s capability planning at the best of times. Instead, here\u2019s my statistical analysis of the planned throughput of projects.<\/p>\n

Under the two-pass process introduced back in 2003, defence projects are considered (at least) twice by the government; so-called \u2018first pass\u2019 and \u2018second pass\u2019 approval. At first pass the priority for the capability is confirmed, along with the range of options to be considered; at second pass an option is selected and given final approval. In the latest DCP, 25 of 111 projects are listed as having a combined or simultaneous first and second pass approval.<\/p>\n

Because the DCP provides only multi-year bands for when project approvals are scheduled, it\u2019s necessary to analyse the schedule using a statistical approach. Fortunately, with so many projects that gives a reasonable average result, so it\u2019s possible to calculate the number of approvals required each year to deliver the plan.<\/p>\n

The graph below (click to enlarge) shows the average number of projects planned and achieved for second pass approval since 2004\u2014that is, the number of projects that have been green-lighted to commence. Two things are apparent. First, there have been continuing delays to the program; the actual number of projects approved in previous years has consistently been below the number planned. This matters because it means that the defence force will have to wait longer than planned for the equipment it presumably needs, and often means that ageing equipment has to soldier on longer than planned. Second, the number of approvals planned between 2013 and 2015 substantially exceeds recently achieved rates of approval.<\/p>\n

\"\"<\/a><\/p>\n

Let\u2019s now look at how first pass approvals have been going. As shown below (click to enlarge), the picture is even less encouraging. On past experience, there is little chance of the envisaged rate of approvals being achieved. (There are no planned figures are available for 2004-05 and 2005-06 because the first-pass milestone was introduced after the 2004 DCP was published.)<\/p>\n

\"\"<\/a>However, in putting together the graphs above, combined approvals have been counted as both a first- and second-pass approval. It may be that there is less work required when a combined approval occurs, meaning that the task ahead is less difficult than it might first appear. But whatever solace we take from that point must be tempered by the knowledge that there is a White Paper due in 2012\u201313 and an election in 2013\u201314, and past experience shows that such events seriously delay the approval of projects.<\/p>\n

So where does that leave us? It will be interesting to compare the first post-White Paper DCP with the one just released. Unless there are significant differences between the two documents, the White Paper will have been an irrelevant waste of time\u2014akin to the cheap magician\u2019s trick of telling you the number you first thought of. At the very least, let\u2019s hope that the new schedule of project approvals is more realistically aligned with past experience than what\u2019s just been released.<\/p>\n

Mark Thomson<\/a>\u00a0is senior analyst for defence economics at ASPI.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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