Page 29 - Australian Defence Magazine - June 2018

Future shipbuilding programs will be a massive drain on Defence coffers for some time.
BUDGET THOUGHT BUBBLES
KATHERINE ZIESING | CANBERRA
After attending Budget lock ups for well over a decade, here is a list of highlights that stood out reading the documents this year.
• The Department is no longer report- ing contractor/consultant/service provider figures. In essence, it’s too hard given the fluid nature of the business, ADM understands.
• Sustainment for a fleet of 36 Super Hornets and Growlers is $414 mil- lion (the second most expensive platform to maintain after the Col- lins class submarine) and sustain- ment of 71 Hornets is $190 million. The Classic Hornets are climbing the bathtub curve towards retirement in December 2021 and there are twice as many of them as the newer 4.5 Gen aircraft. Even accounting for spiral upgrades to the Super Hornet fleet (aircraft hardware, software and the addition of new weapons), they’re still dollar intensive plat- forms. If sustaiment costs for Super Hornet are an indicator for possible JSF sustainment costs, there is go- ing to have to be some horse trading in the future to fund that adequately.
• The JSF program office is going to need to spend about $2 billion a year between now and IOC to meet the spending profile outlined in the Bud- get papers and capability timeframe outlined. They’re on track to achieve that this year.
• First significant spending appears on OPV, Hawkei and Future Frigate.
• Navy’s LADS capability will be retired from 2020-2021. What will fill it?
• Unit available days for the amphibious afloat and sup- port capability are depress- ing reading but do not take into account the new AORs.
• AWD sustainment has de- buted in the Top 30 sustain- ment projects at $163 million even though only one is in the water for Navy. “The majority of the contracted costs spent in 2018-19 will be on the FMS case, purchase of spares and support services, along with Managing Contractor costs. The Managing Contractor (BAE Systems) were appoint-
ed in December 2016 and are work- ing with the DDG SPO to establish the support capability for the DDGs,” ac- cording to the Budget papers.
• The VIP fleet flying hours remain the same for the forward estimates. ADM understands that new fleet ar- rangements are set under a lease deal and are just looking to be an- nounced at a politically opportune time. The current working assump- tion is that more capability will be introduced with the new arrange- ment and will be cost neutral.
• The MRH90 has been introduced into 6 Aviation Regiment in support of Special Operations, Army and Navy operations. This includes the de- velopment of a replacement Cargo Hook, Fast Roping Rappelling and Ex- traction System and Gun Mount. The final production aircraft was accept- ed into service in July 2017, bring- ing the total number of aircraft to 47 at a common baseline. Operational Contingency Load 3 was declared by Army on 12 February 2018. Focus will continue to be on the provision of the capabilities required to enable achievement of the remaining opera- tional milestones in the lead-up to Fi- nal Operational Capability in 2021.
• The Huon class are being managed for obsolescence this financial year in the lead up to a life extension pro- gram under Sea 1179.
Even accounting for the loss of the ASD headcount, the drop will have a notewor- thy affect on how the department does business. The Budget papers themselves offer no insight into the thinking behind this move apart from ‘reshaping programs to align the workforce with the priorities outlined in the 2016 Defence White Paper’ or ‘Machinery of Government’ for those who speak public service lingo. There is also a glaring omission of contractor or PSPs levels in the Budget papers this year.
Information missing that ADM was also looking forward to is the list of scheduled First and Second Pass approvals for the upcoming financial year. Reasons cited for the department of the information were vague and not forthcoming along the lines of ‘it is not appropriate to release a list of what the NSC is considering’.
We do however recap the list from last year to see if Defence and government have
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