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Defence capability plan must not become $51 billion blueprint for project mismanagement.



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Robert McClelland MP Shadow Minister for Defence Federal Member for Barton

20 June 2006

DEFENCE CAPABILITY PLAN MUST NOT BECOME $51 BILLION BLUEPRINT FOR PROJECT MISMANAGEMENT

The release of the new Defence Capability Plan is a much needed revision of Australia’s defence capability requirements.

The pressing need to reconfigure the DCP has been evident for a long time. The expert Australian Strategic Policy Institute (ASPI), last year observed in their post-budget Cost of Defence report that:

“The mounting delays to the approval of projects in the defence capability plan are rapidly rendering the current version of the plan obsolete. Our strategic priorities remain unresolved.”

Extending 3 percent real annual increases in Defence funding will allow greater certainty for our Defence industry. But if we continue to see billion dollar project bungles like the Seasprite helicopters; the M113 Armoured Personnel Carriers and the FFG Frigates even the 3 percent increase will be insufficient to cover the major acquisitions that are planned for the coming decade.

Federal Labor remains concerned about the Government’s ability to effectively manage a series of feature projects in the new DCP. These include:

• acquiring the essentially developmental MRH-90 helicopter whose European NH-90 equivalent has suffered delivery delays and capability problems;

• a $2.2 billion snap decision to buy C-17 heavy lift aircraft that bypassed much of the in-built procedures to ensure due diligence and cost effectiveness;

• new enhancements to our ANZAC class frigates after massive mismanagement of the FFG Frigate upgrade whereby only one of the four vessels has been received and has failed tests for weapons, software and underwater sonar systems;

• unresolved technical and maintenance issues for Hawk fighter trainers potentially impacting on achievement of required flying hours; • potential cost and structural refurbishment problems arising in the F/A-18 Hornet upgrade program to maintain fleet capability until delivery of the

Joint Strike Fighter;

• risks to Army networking projects when the Government manifestly fails to recruit and retain adequate numbers of personnel;

The Capability Plan outlines the military equipment purchases Australia intends to make over the next decade.

Unless the Government addresses systemic project mismanagement in Defence our capacity to achieve the new plan must be in question.

Further information: Tom Cameron 0417 147 932