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F-111 Project



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FOR PRESS

i 0 O C T 1968 β ι ι φ Ο Statement by Hon. Alien Fairhall, M.P. Minister for Defence.

F-lll PROJECT.

Exploiting the absence of a Government majority in the

Senate, the Opposition seeks to discredit the F-lll Project and to

embarrass the Government in what is a purely political exercise.

The demand for more information and the complaints which accompany

it were completely predictable.

The Prime Minister has made it clear that the Government

will not table classified military information. He has also pointed

out that, in the overall documentation of the Project, there are

papers which must remain confidential as between Governments, having

reference to matters domestic to the United States and to that

country's relations with other Governments* Quite prAperly# these

will not be disclosed.

Let me put my own views on this situation a£ elearly a.t

I may.

The Australian/American Alliance, which the Opposition

claims to value, is characterised by the most extraordinary mutual

confidence and trust. If v/e were to accede to the demand for

publication of information confidential between our Governments,

merely to assist the Opposition's deep political attack, one must

expect an end to other than formal and hard business type arrangements

as between Australia and the United States for the future. In the

light ef likely future military developments in eur sphere of interesl

such a course would be as imprudent as it is unnecessary.

The documentation available, and the detailed explanation

which the Government is prepared to offer with it, will satisfy

anyone seeding to make a purely objective appreciation of the Project,

I do not propose to follow the Leader of the Opposition

into purely political argument. I rather want to deal with the

facts as I know them and as the tabled documents establish them,

for here we: are dealing with a major project involving the future

defence of ,this country.

There have been technical difficulties and they continue -

so there have been with every aircraft ever built. There have been

losses in the early stages of flying. This situation has, unhappily,

been common to almost every new military and, indeed, most civil

types· The losses of F-lll in the first 10,000 hohrs of flight were

below those of the last series of United States miljitary aircraft.

Up to 15,000 hours o- " flight, F-lll continued its ejarlier good record.

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If one begins, from the heavily qualified "estimate"

of 1963 of $125K., the cost of the Project has continued to rise.

So also have the costs of every developmental project, and nowhere

with greater justification than in the F-lll concept of a military

weapons sys*fcem which has virtually hurdled what would normally be

a generation of technological development.

The House has listened with diminishing patience to the

Opposition's attack upon the Government over this matter since 1963

to the present time. It fascinates me even to think what the Labor

Party, themselves, might have done in office.

In October, 1963# the Leader of the Opposition was firm

and clear in his demand which I quotet

"The Labor Party believes that the Canberiras should be replaced immediatelyt1 1

and then later:

"We (the Labor Party) would acquire a small number of replacements, possibly the Vigilante or the Phantom, to fill the bill until the TSR2, or some other suitable plane, is available in four or five years' time."

The Government agreed with the need to replace the. Canberras, but

exercising a practical judgment on the circumstances at the time,

saw no immediate demand which would warrant our passing up the

possibilities of the best aircraft likely to be produced in the

reasonable future, in favour of one which barely met our requirements

It goes without saying that Labor's programme would have

cost perhaps SUS200M. and, on the Leader of the Opposition's own

statement, they would now be seeking to replace obsolete aircraft.

With what? There is nothing anywhere to support a possible

Opposition claim that they could have made a better contract.

In 1963, the F-lll concept was so far ahead of current

experience, in all fields of military aviation, that a tremendous

programme of research and development was completely unavoidable.

Does the Labor Party suggest they might somehow have got

a fixed price contract in the light of this research programme of

unpredictable length, depth and cost? Impossible' .

The Opposition complains because there is no provision

for cancellation in the contract. But does the Opposition suggest

that this country could honourably, undertake even a minor share in

s research and development programme of this kind and opt out at any time without penalty?

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I haven't the slightest doubt we could negotiate our way-

out of the contract at this stage if circumstances called for it,,

as the United Kingdom is now doing. There must, inevitably, have

been a heavy cost penalty and we would be left without strike

reconnaissance capacity we need.

Will the Opposition suggest it could now buy F-lll at anj

less than we are paying for it, or would they then go on into a

dangerous future with the kind of limited strike reconnaissance

capacity which the Leader of the Opposition, himself, eondemned in

1963? ’

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Let me now draw some comparisons between Australia and tl·

United Kingdom.

Coming into the Project when so much of the research and

development work had been done, the United Kingdom was able to .

negotiate a stated price subject, nevertheless, to escalation for the

increased costs of labour and material after a stated date in 1965.

The same terms were forthwith available to us and we would therefore

pay the same price for F-lll as did the United Kingdom.

Could there be any more powerful endorsement of Australie

judgment than that the United Kingdom cancelled their own TSR2

developmental project - then at the point of flight trials — in favc

of F-lll? Their endorsement of our judgment continued when they

accepted range and payload and performance of the aircraft as adequE

to justify its deployment into South-East Asia.

Only economic pressure forced the United Kingdom to eance

the project to the tune of lamentations from the Minister for Defern

over the loss of this strike reconnaissance capability.

If we are condemned for selecting F-lll, for putting

confidence in its builders, for assessing it as suitable for our

purposes, and for paying $5 *95h. a copy for it, then so too must the

United Kingdom Government be condemned..

Now let me draw some comparisons with the United States.

; Today, Australia has the nearest one will ever get to a

fixed price on a project of this kind. The Memorandum of Understand

and the technical arrangements, give us equal priority with the Uni­

States in delivery, undertakes that our aircraft will be engineered

and inspected to the same standards as for the United States itself,

The United States deployed the aircraft for operation in South-East

Asia and clearly accepts it as suitable for this theatre.

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We need to understand our dependence on allied help

for our own security in the ^South-East Asian area of the future,

lie need· effort, if that should be needed. We are fortunate to

have been able to make such satisfactory financial arrangements

and special provisions covering logistic support for the aircraft

and other aspects of Australian defence. But the fact is that,

if we are wrong in our assessment of the value of the aircraft,

or of its applicability to our likely military problems, then

so too is the United States of America. .

Thus, the United States and the United Kingdom - two

of the world's most militarily experienced"nations - have endorsed

our judgment about the aircraft, have accepted the price and the

performance, and understood that such difficulties as there are,

are all but inseparable from the introduction of new aircraft of

this kind.

Let me now survey the history of the Project. From

1959 onward, the Department of Air was concerned about the

increased inability of Canberra to penetrate modern enemy

defences and the selection of a suitable aircraft to replace

Canberra was a matter of long study. In 1963 an RAAF Mission

went abroad to examine possible replacements, including TSR2

in the United Kingdom, and TFX - as it then was - in the United

States. .

Their advice to the Government in August of 1963 was

that, of aircraft evaluated, it was clear that TFX should meet

the Air Staff requirement in almost every respect and, if

considered in isolation, should be the logical choice of

aircraft with which to replace the Canberra.

There has been comment about the alleged undue haste

with which the Government made up its mind. There might have

been room for reproof if the Government had given inadequate

study to the replacement, but this is clearly not the case on

the record.

But a decision having been made, firmly based on

RAAF advice, the Minister for Defence went overseas to consult

the United States. The result was set out in the Memorandum of

Understanding, which accepted that there could not be a fixed

price on a developmental project, that Australia would pay only

the average estimated unit cost of development and production

based on a total production run, and that cost would not be

determined until the time of delivery of our 24th aircraft.

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. For those who constantly, hark back to the initial figure

of &125M. for the Project, may'I remind them of. Paragraph 2 of the

Memorandum of Understanding; .

"The Secretary of Defense advised the Minister of Defence that the. general order of magnitude of this total program cost, based on a production run of 15Θ0 aircraft, is currently estimated to be approximately &125M."

The use of the word*' "general order of magnitude", "estimated" and

"approximately" must immediately establish that the Government well

understood the potential for increased costs in the Project. Any

reference to $12511. as the original price is the most complete

nonsense. t.)

. The technical arrangements developed in support of the

Memorandum of Understanding set out the conditions under which the

aircraft would be produced and sold.

They provided that the aircraft and equipment would be

fabricated to the same documentation and quality standards as are

the counterparts for the United States, that the United States

Government would use established Department of Defence contracting

procedures, and that production or work for the Government of

Australia would be placed on the same terms as contracts for the

Government of the United States.

Does anyone charge that this is inadequate protection for

Australia, in the light of American experience?

The Memorandum went on to establish that deliveries would

be made on a priority basis equal to that of the United States, and

to appoint an Australian Projects Manager so that every aspect of

production should be under Australian surveillance.

The United States Government undertook that raw. materials,

components, intermediate assemblies, and end items would be inspected

to the same extent, and in the same manner, as are the counterparts

for the United States1 own programme.

Having regard to the experience of the United States and

their immeasurably greater stake in the Project, does this indicate

laxity on the part of the Australian Government?

The United States accepted.continuing responsibility aftei

delivery to secure correction or replacement if items were found not

to be manufactured in accordance with the documentation and, again, v

were to have equal priority with the United States in the provision

of support equipment. But I underline that quantities will be

determined by mutual agreement,· based on the Australian operational

concept of unit deployment. .

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Time will not permit an excursion into the financial

arrangements. Other Members of the Government will do that. I pause

merely to say that, on request, Australia was given the fixed upper-

limit provision, equivalent to that in the United Kingdom contract.

Our financial commitment for the fly-away aircraft was limited to

the same figure as that of the United Kingdom - $5·95Μ. a copy -

subject only to escalation in the costs of labour and materials and

modifications, in a manner which has been given to the House on any

number of occasions.

To the unprejudiced mind, the picture is therefore clear.

The Opposition agreed with us in 1963 that we needed

superior strike reconnaissance capacity in the Australian Air Force.

There is nothing in the strategic assessment for the future which

could give any confidence to a decision now to be without it.

The Government accepted, in F-lll, the kind of concept

and the reasonable expectation of its production which would give us

the capability we needed, That judgment was confirmed by the United

Kingdom and the United States. ·

We entered into a financially open-ended arrangement

because the essential research and development component of the

programme rendered any other kind of arrangement impossible. We

secured the nearest thing possible to a fixed price, as early as that

was practicable.

Our aircraj-t will be built and inspected to the same

standards as those of the United States itself. Our deliveries will

be on a priority basis equal to theirs. The financial arrangements

covering the purchase have been the subject of generous United States'

assistance at favourable rates of interest.

The final decision to authorise the then Minister for

Defence to sign the Memorandum was quickly made, but the decision

that this was the right aircraft for Australia's need was made only

after intensive study, and on the recommendation of the Government's

techniccal advisers in the Royal Australian Air Force.

Αέ to the aircraft itself, its price compares favourably

with that of any modern aircraft, even for civil use. But if due

allowance is made for the tremendous, military power inbuilt into F— 111

with its weapons systems, it must be accepted as reflecting today's

costs of modern defence equipment on land, at sea, or in the air.

And with prospects of widespread change in the disposition

of military power in our sphere of interest, he would be a foolish -

rather than a brave - man who suggests that we cannot afford adequate

military preparedness no less in the air than elsewhere.