Defence minister Richard Marles has declared Defence procurement a “complete mess”, citing a raft of mid-range over-runs ahead of the Budget, but fully cleared the Department of Defence of any mismanagement in the series of alleged bungles.
Marles on Monday declared that his office will impose six new measures to bring defence procurement under control, including an ostensibly new independent project management office, monthly updates to his office, early warning indicators on troubled projects and an increased focus on “changing culture” and more ministerial summits.
The new updates will not be made public.
Marles declared a new era of “activist management” was in force after a decade of “hopeless mismanagement” under the Coalition and that he would seek to rein in cost blowouts and delays across all projects.
“We are confident we can get those projects back on track,” Marles said, only to be immediately qualified by defence industry minister Pat Conroy, who said it was “very hard” to get projects that had lost momentum back on time.
“We are going to try very hard” Conroy said.
Project specifics and figures proved elusive, with both ministers using the cover of the Defence Strategic Review and the Budget to avoid getting into details.
The topline backgrounding fed to the ABC is that “at least 28 Defence major projects are running a cumulative 97 years late, including 18 running over budget, with at least $6.5 billion of variations from approved cost levels.”
On those numbers, the average blowout comes to just over $300 million, or a variation of around 5.5%, inclusive of COVID supply chain disruptions and currency fluctuations, suggesting that the previous government’s neglect may well have been more benevolent than pernicious in budgetary terms.
Carefully avoiding use of the word crisis, Marles unloaded on the former government, saying that it was “totally focussed on press releases, hoopla and vaudeville,” saying that the Leader of the Opposition, Peter Dutton “needs to answer” for what has happened.
However Males, courageously, said that the mess his government has now discovered was “not the fault of Defence.”
“Defence is an excellent department,” Marles said, expressing confidence the bureaucracy could manage defence procurement well.
Collared by questions as to whether the builder of the Navy’s Hunter class frigates, BAE, was responsible for delays and advice that the ships would be essentially off the shelf rather than a custom build, Conroy put the boot squarely into the former government.
“The last government lied,” Conroy said.
“This was not defence, this was the ministers of the day,” Conroy said, adding that there had been interference in the procurement process for the vessels.
Marles said there would now be “leadership” in defence procurement.
Meanwhile, the parliamntary rpobe into defence spending is continuing with Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) inviting written submissions to a new inquiry into Australia’s Defence contract arrangements in September.
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