{"id":39438,"date":"2018-05-21T12:30:57","date_gmt":"2018-05-21T02:30:57","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=39438"},"modified":"2018-05-21T14:49:14","modified_gmt":"2018-05-21T04:49:14","slug":"anao-report-misses-the-target","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/anao-report-misses-the-target\/","title":{"rendered":"ANAO report misses the target"},"content":{"rendered":"
<\/figure>\n

The ANAO report Naval construction programs\u2014mobilisation<\/em><\/a> released on 14\u00a0May is a worthy attempt to summarise the issues that must be addressed as Australia ramps up its huge acquisition program for offshore patrol vessels, frigates and submarines. However, it falls way short of the mark\u2014not for lack of trying but because it hasn\u2019t taken into account the key driver of why we\u2019re even having the discussion.<\/p>\n

The central issue it misses is that the government has to be involved in things such as workforce planning\u2014even shipyard design\u2014because it chooses to retain ownership of the business at the heart of it all, namely ASC. In most other countries, including the\u00a0US, Britain, Germany and Sweden, these matters would largely be for the private sector to manage, with the politicians and bureaucrats staying well clear.<\/p>\n

ASC started life as a private-sector consortium, which went through a number of shareholder changes after being created in 1987. The big one occurred when John Howard\u2019s Coalition government decided to nationalise it in\u00a02000, kicking out the Swedish designer of the Collins class through the use of FIRB rules. From that day on, ASC has legally been owned by whoever is the finance minister.<\/p>\n

It had been the Coalition government\u2019s plan to re-privatise ASC in conjunction with the Air Warfare Destroyer contract, but that didn\u2019t happen because of the 2007\u00a0change of government. New ALP finance minister Lindsay Tanner had a good try in late\u00a02008 but was overruled in cabinet after just a few minutes of discussion when Kevin Rudd\u2019s national security advisor whispered in his ear: \u2018Washington won\u2019t like that, PM.\u2019<\/p>\n

Tanner\u2019s case was that for naval shipbuilding, the private sector has been shown to be at least 10%\u00a0more efficient than government-owed dockyards.\u00a0 For him, the attraction wasn\u2019t the pittance to be gained from the sale of ASC\u2014it was the huge savings the nation would make on future contracts, just like the $89\u00a0billion worth we are now looking at.<\/p>\n

Government involvement in naval shipbuilding unfortunately didn\u2019t end there\u2014and the alliance contracting format for three air warfare destroyers (AWDs) saw the Department of Finance\u2013owned ASC teamed with the customer\u2014the Department of Defence\u2014with each forming one-third of this new entity.<\/p>\n

Effectively, the government was contracting with itself to deliver a commercial outcome. The consequences have been extraordinarily costly including the serially delayed AWDs and a submarine fleet that, on a per\u00a0boat basis, is easily the most expensive in the world to maintain.<\/p>\n

Back to the ANAO report\u2014it\u2019s tinkering at the very margins of the problem. Yes, it has highlighted the level of risk involved in the future frigates. But even in this it\u2019s misguided, nominating the integration of the Aegis element of the combat system as high risk\u2014which it isn\u2019t\u2014while largely ignoring the inherently greater complexity and dangers of the future submarine project.<\/p>\n

However the Department (read: the government) has already replied, saying that revitalising the naval sector is a nation-building exercise, and therefore it\u2019s necessary to throw vast amounts of money at it without much accountability because the end justifies the means.<\/p>\n

At least the frigates are based on platforms that are either at sea or, in the case of the British contender, under construction. SEA\u00a01000 has years to go before it reaches a similar level of maturity.<\/p>\n

What should have happened was the construction of a fleet of new generation Collins-class submarines by a privatised ASC. That is the approach that has been taken by every other nation wishing to develop a submarine enterprise: use the experience and knowledge gained on the first ones to move on to a new class.<\/p>\n

As the Royal Navy\u2019s Trafalgar and Swiftsure classes led to Astute, the US Navy\u2019s Los Angeles and Seawolf classes led to Virginia, and from Japan\u2019s Soryu came Oyashio\u2014Australia should have done exactly the same. Australia doesn\u2019t need to build a submarine enterprise from scratch because we already have one.<\/p>\n

No political party has shown any interest in renationalising the aerospace sector after the Government Aircraft Factories were flogged off in the\u00a01980s. No one in their right mind would wish to renationalise the military land sector, which was first transformed into Australian Defence Industries and then sold to Thales in\u00a01999.<\/p>\n

But here we are in\u00a02018, with government ownership of the key part of the naval sector an unchallenged fact of life. As for the argument put to Kevin Rudd that the Americans wouldn\u2019t like it\u2014what other sovereign nation would cave in to the imaginary pressure exerted by another country into the structure of its defence industry?<\/p>\n

And as for the\u00a0US not being prepared to release sensitive technology\u2014that nonsense argument is quickly dealt with by looking at another close ally, the\u00a0UK. Their defence companies have no difficulty getting access to the most sensitive technologies and, besides, they\u2019re listed on the stock exchange, not run by a bunch of Whitehall bureaucrats.<\/p>\n","protected":false},"excerpt":{"rendered":"

The ANAO report Naval construction programs\u2014mobilisation released on 14\u00a0May is a worthy attempt to summarise the issues that must be addressed as Australia ramps up its huge acquisition program for offshore patrol vessels, frigates and …<\/p>\n","protected":false},"author":188,"featured_media":39439,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[1429],"class_list":["post-39438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-future-frigate"],"acf":[],"yoast_head":"\nANAO report misses the target | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/anao-report-misses-the-target\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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