Waste and ineptitude shows defence is out of its depth

The Australian Department of Defence spends hundreds of billions of taxpayer money on equipment supposedly aimed at protecting the nation.

But they simply don’t have the skills to carry out the task, and so most of the money is wasted.

Buried in parliamentary documents is this dramatic conclusion reached not by commentators like myself, or my colleague Greg Sheridan, but rather the Australian National Audit Office. They have studied the inner workings and planning of defence department officials and conclude:

“Further training and oversight may be required of Defence officials involved in high-level planning and advising on major capital acquisition projects, at all levels.”

I would put it more harshly. The fact that we have untrained people who are completely out of their depth making decisions of this huge magnitude is a scandal that makes the waste and ineptitude shown in the Robodebt and NDIS debacles appear minor affairs.

While there has been some extracts from the audit office defence report published, I am grateful to Ewen Levick of Australian Defence Magazine for highlighting the audit conclusions.

My readers first saw the poor training and ability of defence equipment officials on display in the Joint Strike Fighter F-35 aircraft disaster.

Former Prime Minister Scott Morrison during a visit to BAE Systems Australia.

For around two decades, Australia’s top aircraft knowledge group Air power Australia has been explaining to defence officials that the JSF-F35 would cost Australia air superiority in the region and would simply be a cash cow for Lockheed Martin. And that’s exactly what happened, but the disaster is revealed not in Australian reports but in the US disclosures.

A similar set of disastrous errors took place with French submarine contact, where we were completely outmanoeuvred by the French.

When defence minister, Peter Dutton had the courage to reverse the submarine mistake but did not have the courage to reverse the F-35 and frigate disasters. And of course there are helicopters and a range of smaller disasters made by top current and past defence officials whom we now know were simply untrained and unable to make the right decisions in these enormous equipment purchases.

It’s not made easier for them by the interference of their political masters, who have a similar knowledge and ability gap.

The nation was hopeful the current defence minister Richard Marles would have the ability to realise that his predecessors since Kim Beazley and Robert Ray had all been misled by untrained officials.

Marles may have Beazley/Ray abilities, but the prime minister has been absent for such long periods that Marles has been acting PM for an unprecedented number of days which made it impossible for him to tackle the defence mess, and he appears to have been “captured” by his untrained advisers.

Former Minister for Defence of Australia Kim Beazley attends the Remembrance Day ceremony at the Australian War Memorial. Picture: Martin Ollman/NCA NewsWire

When PM Anthony Albanese had talks with Chinese President Xi Jinping, I am sure, but the Chinese leader was too diplomatic to point out that the Chinese latest warship was vastly superior to our frigates, and it was available in 2023 not in the 2032 and beyond. The Chinese J20 aircraft can fly much higher and faster for longer distances than our JSF-F35.

Service people on both the aircraft and frigates are unlikely to survive any battle against superior equipment.

And so the audit office report on the frigate disaster must be seen not just as a shocking waste of capital but a great danger to human life.

The Audit Office reveals that the Department of Defence has admitted that it ‘did not conduct an effective limited tender process’ for the design of the $45bn Hunter class frigates.

The contract expenditure to date has not been effective in delivering on project milestones, and “lack of design maturity” had resulted in a fresh 18-month delay to the project, with the first of the nine Hunter-class vessels intended to replace the RAN’s Anzac-class frigates now expected to be delivered in mid-2032 rather than early 2031.

Levick reports that the Secretary of the Department Greg Moriarty has admitted that Defence’s own tender processes resulted in risks that are now being realised, and quotes these remarks from Moriarty.

“There was no consistent expression of the goals and purpose of the procurement. Planning for the procurement fell into a process of disjointed advice to government that did not include deliberate steps to maintain clear coherent goals and a procurement method commensurate with the scale, scope and risk of the procurement.

“The absence of formal documentation means that there is no evidence to demonstrate that the shortlisting activities and decision were commensurate with the scale, scope and risk of the decision.”

“The focus on achieving capability requirements displaced sufficient attention to the risks as well as the consideration of the tenders against other criteria, which information was assessed and documented as part of the process.”

According to the original Audit Office report, Defence’s Capability and Investment Committee had decided in February 2016 that Italy’s FREMM multipurpose frigate and Spanish shipbuilder Navantia’s modified F-100 were considered the most viable designs and that either the UK’s BAE Systems Type 26 or the French variant of the FREMM design should be progressed as a third option for the competitive evaluation activity.

Stunningly, the audit office reveals that records of the rationale for the selection by the Defence Secretary (the decision-maker) of the BAE Type 26 design as the third option to be recommended to government had not been retained by the defence department.

So not only did our defence officials make a completely incompetent decision, but couldn’t be bothered writing down why they had made the decision.

(My understanding is that one of the reasons why this happened was that under the Coalition government we bought the frigates from England to help gain a free trade agreement.)

The current stated cost is $45bn, but maintenance and operations will take that cost well above $150bn, probably to $200bn.

While we might be allowed some mechano-style assembly operation in Australia, all the parts and know how are in Britain and there’s no boost to Australian industry – the reverse of what’s required by an isolated nation like Australia.

The British frigates will not be able to keep up with the American fleets. They have too few missile firing points and there’s only room for one helicopter, and their aim to detect and destroy submarines will not be effective against the nuclear submarines which will now dominate our region.

Although Marles has done an excellent job as deputy PM, he should consider stepping down and tackling the defence equipment disasters and start on the process of teaching defence people how to do the job.

That will take years, so we need to recruit the best defence knowledge in Australia outside current chiefs and attract the very best people we can find around the world who understand defence equipment purchasing and negotiating.

The newcomers need to start the task by looking at what is actually required, given the investments being made in the region. And remember our current untrained people are making nuclear submarine decisions.