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RED LIGHTS FLASHING ON COALITION DEFENCE MISMANAGEMENT

January 20, 2020

More than half of Australia’s most important defence projects are facing flashing red signals warning of delays in delivering the equipment and systems that Australian Defence Force personnel need to carry out their missions.
 
Defence’s latest Capability Acquisition and Sustainment Quarterly Performance Report, obtained under Freedom of Information, shows 22 of Defence’s 41 Key Acquisition Projects are at risk of significant schedule delays.
 
Under the report’s traffic light rating system, the 22 projects have been given a red rating for whether they will achieve Initial or Final Operational Capability on schedule, indicating that Defence is monitoring the projects for significant or escalating issues which are putting their on-time delivery at risk.
 
Another two of the 41 projects have an amber rating, indicating they face emerging risks.
 
Under the Morrison Government’s revolving door of Defence Ministers, the problems in Defence capability acquisition projects have been getting worse.
 
The report shows that three large projects were moved from green to red ratings between the March and June quarters of 2019: 

  • The $9.1 billion Air Warfare Destroyer project, which is facing a delay of 40 months in achieving final operational capability
  • The $1.44 billion project to acquire 10 new C-27J Spartan battlefield airlift aircraft to replace the RAAF’s retired Caribou fleet, which is facing a 24 month delay in achieving final operational capability
  • $50.7 million in upgrades to the Jindalee Operational Radar Network system which provides military surveillance of the northern and western approaches to Australia.

 
The report also has bad news on Defence’s activities to supply, maintain and sustain its key capabilities.
 
It shows that 15 of Defence’s Top 30 Sustainment Products had red ratings for costs, indicating they incurred budget overruns in 2018-19.
 
It is very worrying that in a single three-month period, Defence projects worth $10.6 billion have had their schedule rating move from green to red.
 
This means critical ADF platforms, our destroyers, battlefield transport aircraft and early warning radar system, are at high risk of delays.
 
The Defence Minister is clearly asleep at the wheel when she allows 15 sustainment products with a combined annual budget of $1.8 billion to exceed their budget.
 
This represents half of the most significant platforms in ADF service blowing out their budgets.
 
Of the 41 most critical acquisition projects, 54 per cent are experiencing significant schedule delays or are at risk of delay – and when projects finally enter service they are likely to have budget blow-outs in sustainment.
 
This is the latest evidence of how Australia’s national security interests – and the ability of our soldiers, sailors and air crews to do their jobs – are being undermined by the Morrison Government’s mishandling of major defence projects.

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