In the course of an interview between ABC chief political correspondent Sabra Lane and Defence Minister Stephen Smith on Radio National’s PM program yesterday afternoon, the following exchange took place:
SABRA LANE: The Government says its spending on Defence will be increased to 2 per cent of GDP when the financial circumstances allow, got any rough idea as to when that might be?
STEPHEN SMITH: I'm not putting a timetable on it.
SABRA LANE: But you've got respected analysts like Peter Jennings who say it just shouldn't be left to chance you should be able to give people an idea of when that might be.
STEPHEN SMITH: Well I don't want to shop Peter, but Peter was intricately involved in a former life with the detailed working of the 2009 white paper, he was one of the people who thought that you could map out for Defence a guaranteed share of spending with dedicated growth paths from 2009 through to 2030 - over 21 years. Well life is not like that and the global financial crisis taught everyone that life is not like that.
I have news for the Defence Minister. When you are dealing with defence procurement and capability development, life is exactly like that, or at least it needs to be, because acquisition of a complex defence platform takes twenty years or more. In order to manage such projects and be in a position to enter legally binding contracts between the Commonwealth of Australia and the supplier, the Department of Defence needs to know how much money it is likely to have over the relevant timescale:
- Planning for a replacement for the Oberon Class submarines began in the late 1970s, the winning design was announce in 1987, and the submarines were built between 1990 and 2003: major capital investment over a quarter of a century.
- Planning for the replacement for Collins began not later than 2007. These boats will enter service in the 2030s.
- Australia signed up to the Joint Strike Fighter program in 2002. The first tranche of 14 aircraft will be delivered no earlier than about 2017-19, and it will be well into the 2020s by the time we have full capability. Meanwhile we will have to make a stop-gap purchase of Super Hornets.
All of these procurement projects require very substantial complementary expenditure on facilities, crews and crew training.
The fact is that if Governments want Defence to manage its procurement, facilities investment, through life support and training programs efficiently and effectively, it needs to give the Department reasonable predictability of funding. This is not a year-by-year business.
See the full interview at Sabra Lane - Stephen Smith interview, 3 May 2013.