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The Hon Richard Marles MP
Deputy Prime Minister
Minister for Defence
The Hon Pat Conroy MP
Minister for Defence Industry
10 October 2022
The Albanese Government is moving to rectify significant and systemic issues in the delivery of crucial Defence capabilities.
Data from the Australian National Audit Office and advice from Defence shows a series of major Defence projects – with approved budgets totalling more than $69 billion – are facing significant schedule delays and budget variations.
Of these projects, at least 28 are a combined 97 years behind schedule and at least 18 projects are running over budget and at least $6.5 billion of variations from the approved budgets identified.
These projects include:
- $44 billion Hunter Class Frigate program – start of construction delayed by four years and a $15 billion increase in expected costs, hidden from the public by the Coalition government.
- $1.4 billion C-27J Spartan Battlefield Airlifters – which were delivered four and a half years behind schedule and are unable to fly into battlefields.
- $3.7 billion Offshore Patrol Vessel project – running one year behind schedule.
- $356 million Evolved Cape Class patrol boats – running nearly a year late.
- $970 million Battlefield Command System – three years behind schedule.
- Several Defence Satellite Communications projects worth $906 million – running between two and four years behind schedule.
This underperformance of Defence projects is due in no small part to the chaotic administration of the Defence portfolio by the former Coalition Government.
The Albanese Government recognises the dedicated work of ADF and Department of Defence staff, and our defence industry partners, on capability acquisition and sustainment.
Many Defence projects are complex undertakings at the cutting edge of technological, engineering and industrial capability and inevitably involve risk.
The problem under the former Government was that Defence Ministers failed to provide the leadership needed to effectively manage those risks.
That’s why the Albanese Government is moving to strengthen and revitalise Defence’s projects of concern process, by:
- Establishing an independent projects and portfolio management office within Defence.
- Requiring monthly reports on Projects of Concern and Projects of Interest to the Minister for Defence and Minister for Defence Industry.
- Establishing formal processes and “early warning” criteria for placing projects on the Projects of Concern and Projects of Interest lists.
- Fostering a culture in Defence of raising attention to emerging problems and encouraging and enabling early response.
- Providing troubled projects with extra resources and skills.
- Convening regular Ministerial summits to discuss remediation plans.
We are committed to ensuring Defence can deliver the capabilities ADF personnel need, when they need them; and in doing so, to improve the defence of Australia.
Quotes attributable to Deputy Prime Minister, the Hon Richard Marles MP:
“The Morrison Government’s investment in defence saw key projects blow out in both cost and time. Money was being flushed down the toilet while the former government regaled in how much they were spending on defence.
“We face the most challenging strategic circumstances since the Second World War – this, along with the serious pressures facing the economy mean we need to be more responsible about how we manage critical projects, particularly as we reach record spending within Defence as a per cent of GDP.
“It's not as though we can go onto the battlefield and overwhelm our adversary by waving a copy of the budget papers in their face.
“Given the current strategic circumstances we face, we need to be better focused on the quality of spending within defence to ensure we are providing our ADF personnel with the best capability.
“There will be prudent management of the defence budget because the Albanese Government understands this is the way we'll get submarines in the water faster, and get projects like the Offshore Patrol Vessels and the frigates back on track.
“In doing so, we are building a potent and capable Defence Force which will keep our country safe in the future.”
Quotes attributable to Minister for Defence Industry, the Hon Pat Conroy MP:
“Under the former Liberal Government, critical defence projects have been bungled, face long delays and have failed to deliver promised capabilities – from Battlefield Airlifters which can’t fly into battlefields to patrol boats built with sub-standard aluminium that was prone to rusting.
“The Morrison Government’s bungling has meant ADF personnel have not been getting the equipment they need to do their jobs and Australia risks gaps in its defence capability.
“The former Liberal Government had six Defence Ministers in nine years and under this chaotic administration of the Defence portfolio they cut promised defence investments, failed to deliver projects on time and delivered platforms which can’t do the job.
“The Albanese Labor Government will address this legacy by making reforms to improve the performance of defence capability acquisition projects.
“Establishing an independent projects management office to work closely with Ministers will provide a laser-like focus on fixing projects that are running into difficulties.
“The Albanese Government will also bring the Ministerial energy and oversight that was sorely lacking under the former government.”
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