Abbott to splurge on more military pork?

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ScreenHunter_2567 May. 23 14.25

By Leith van Onselen

I have noted previously how the Coalition has ear-marked tens-of-billions of taxpayer dollars to local defence manufacturing, including a $10 billion to $15 billion-program for 1,000 locally produced armoured vehicles, and locally designed and built submarines for around $40 billion. It has also flagged a multibillion-dollar warship project, and has committed billion for a squadron of Joint Strike Fighters.

Today, The Australian has reported that the Government intends to turn Australia’s warships into airforce carriers, costing the Budget millions in the process:

Mr Abbott has just announced the purchase of 58 JSFs for the RAAF at a cost of $12.4 billion, bringing the number on order to 72. They are all standard take-off and landing F-35As and not suitable for the navy.

The 27,000-tonne assault ships, officially designated Landing Helicopter Docks or LHDs, were intended to carry helicopters rather than fixed-wing aircraft.

Operating JSFs from them would require extensive modifications to accommodate the aircraft and their fuel, munitions and parts.

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I am not a military expert, and cannot comment on whether having airforce carriers is a worthwhile addition to Australia’s defence capabilities. But all this spending on military hardware does seem to run counter to the Coalition’s claims of a “Budget emergency” and its “war on entitlements”.

For example, in the case of armoured vehicle and submarine procurement, Australia could purchase proven, fit-for-purpose, military hardware from abroad at a fraction of the cost of developing similar technology locally. This approach could save taxpayers billions and would seem more consistent with its broader Budget expenditure program.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.