I reported in brief yesterday that Treasurer Joe Hockey had revealed that the contract to build Australia’s next generation of submarines would not be put out to a competitive tender because the Government doesn’t “have time to go through a speculation process”. I also argued that it further undermines the Government’s claims of fiscal superiority:
Let’s be clear. The submarines contract is likely to be worth at least $20 billion. The submarines are also unlikely to be delivered for another decade. So how can Hockey credibly claim that “we don’t have time” to put the contract out to a competitive tender?
A competitive tender is the only way to ensure that Australia gets the best submarines at the best price. In refusing to undergo due process, the Coalition has thrown any Budget credibility that it had left out the window.
Today, criticism of the Government’s decision has emerged from all corners.
Australia’s foremost naval shipbuilder, John White, told the group it would take 10 to 12 years to design and build a new submarine to meet Australia’s requirements on a fixed-price basis.
“Based on Dr White’s advice and Admiral Barrett’s testimony, the Ai Group Defence Council national executive is of the view that sufficient time is available to have a project definition study of a number of options — European and Japanese — to meet our nation’s new submarine requirements,” Mr Willox said.
“We urge the Prime Minister to consider such a tender process before formally deciding on the government’s plans for Australia’s new submarines.”
Mr Willox said that for the government to commit to buying a submarine without such a study would carry substantial risks. The study should seek options for the submarines to be built locally and abroad.
Andrew Davies from the Australian Strategic Policy Institute, said a competitive tender would “drive the price down and the efficiency up”.
He questioned the government’s argument that there will be a “capability gap”, in which Australia risks having no submarines at all, if too much time is spent choosing the next model of boat.
The life of the Collins Class can be extended beyond the late-2020s, he said – a fact the government had acknowledged until recently.
And the Labor Opposition:
Opposition defence spokesman Stephen Conroy said only a competitive tender process would ensure that the new submarine fleet was the best possible and that it was delivered at the best price for taxpayers.
The Abbott Government would do well to heed the above advice, put the submarine contracts out to tender, and let the Australian Submarine Corporation and shipbuilders in Japan, Germany, France and Sweden, fight it out for our business. To proceed without a competitive tender would be shortchanging Australian taxpayers, along with the navy.
