Australia’s biggest defence projects have suffered another $1.2bn budget blowout in 2018-19, with the cost of the 26 projects rising by a total of $24bn compared with what was originally announced, the auditor general has found.
The auditor general’s office released its 2018-19 report into the nation’s major defence projects on Monday afternoon, having found the cost of the initiatives, including the joint strike fighters, had increased to $64.1bn.
The F35 project was the biggest increase, at nearly $14bn, after another 58 aircraft were added. But another 26 projects needed contingency top-ups in the last budget, although only the MRH90 helicopter project was considered “of concern”. It had first been flagged in 2011 for a “contractor issue”.
The 26 projects chosen for review had all been subject to “second pass approval”, which means the government had made the decision to move ahead with “a fully defined and costed capability”, essentially serving as the midway point of the project.
But slippage – the term used to explain the difference between the original government-approved date and the forecast date – had increased to a cumulative 108 months, or nine years, in the last financial year.
The total schedule slippage was placed at 691 months, or 57 years, when compared with the original schedule. The average slippage was put at 2.7 years. Across the life of the projects, the initial budget has increased by $24.4bn.
The Labor shadow minister assisting for defence, Pat Conroy, said the report pointed to continued “mismanagement” of defence projects.
“Thanks to the Morrison government’s mismanagement, these projects are now cumulatively delayed by over 57 years,” he said.
“The revolving door of defence ministers and weak leadership shown from Linda Reynolds and Melissa Price is clearly contributing to these project blowouts.
“This has the potential to have a real impact on the ground for the ADF. These delays mean our troops are not getting the equipment they need, meaning they are forced to use increasingly outdated weapons, ships and planes that are costing more and more to maintain.”
Last year, the crossbench senator Rex Patrick called for changes in how defence undertook its acquisition process in order to cut down on delays.
“Billions upon billions of dollars are being wasted as defence takes on unnecessarily risky acquisitions,” he said.
