Chris Pyne’s salary rises to $175bn

Recall from defense expert Brian Toohey two years ago:

…everything is wrong about the Turnbull government’s decision to build 12 extremely large submarines in Adelaide.

…The government’s refusal to go with an off-the-shelf design will cost more billions, because the first of new submarines won’t be operational until after 2030 and the last until almost 2060.

This means the decrepit Collins class submarines will have to be kept going for more than 20 years beyond their planned 2025 retirement date – necessitating new capital spending and very high maintenance and operating costs that will soon pass $1 billion a year.

Bizarrely, the Turnbull government has decided that the Adelaide shipyard, which built the six Collins submarines, will now build 12 much bigger submarines and nine frigates that will be far larger than the existing Anzac class, which has served the nation well.

The new frigates will be even bigger than the three air warfare destroyers that the shipyard is building now. These are late and over budget, yet the government trusts this shipyard to build submarines costing $50 billion and frigates about $35 billion.

Where were Scott Morrison and Mathias Cormann when this decision was taken? The government’s estimates of the added costs of local construction shows it will take more than $20 billion more simply to try to win a couple of Coalition seats in Adelaide.

$20bn extra for Chris Pyne’s seat? Phewy. Try $175bn, at the AFR today:

The Turnbull government’s hopes of getting Senate backing for a fresh wave of company tax cuts continue to sink, with a key crossbencher warning they are becoming unaffordable because of the ballooning cost to build and operate 12 new submarines.

Centre Alliance Senator Rex Patrick – one of the key swing votes the government is wooing – told The Australian Financial Review it was “impossible” for him to agree to the plan to slash the corporate tax rate for businesses with a turnover of more than $50 million a year while the final price tag for the submarines remained unknown.

Seizing on official figures obtained through the Senate committee process as well as independent analysis, Senator Patrick, a former submariner, said the cost of building and sustaining the 12 French-designed submarines may ultimately reach $200 billion over their life.

Go Straya.

Comments

  1. The main threat in the future is going to be boats of third world male illegal immigrants. What’s the best ship to intercept those and pull them back to Indonesia?

    • That’s a pretty silly way to look at it. Just make these people legal (“students”, “goat herders”, “chauffeurs”, “hospitality professionals”, whatever) and you don’t have an illegal immigrant problem. Just a doubt of diversity and prosperity.

  2. adelaide_economistMEMBER

    Good to see Senator Rex Patrick doing his best for the State that elected him. Regardless, the rumours strongly suggest that whatever configuration our future naval defence spend takes a hefty part of it will be spent (a) overseas [the backtracking on local work began on day one and continues] and (b) in other States, especially the more politically valuable WA.

    FWIW I don’t disagree with the submarine cost issue but let’s also be real. The decision about a replacement needed to be made about a decade earlier than it was and every government just flubbed it deliberately to avoid making a decision. Even buying ‘off the shelf’ wouldn’t get them here much sooner now unless we are living in fantasy land where littoral submarines are of any use or where we pretend the Americans will sell us nuke subs, give us a great price on them (lol) and build them quickly too! Right up there with the people still moaning about why we didn’t buy the F22.

    Oh and finally – at the rate this country is selling itself (in every way) to China, I honestly don’t see the point anymore in investing money in any major platforms since the only plausible enemy we have is China and we’re happily handing the country over to them – financially, politically, culturally and demographically.

    • Ronin8317MEMBER

      On that subject, we can just buy our submarine from China!! I’m sure the Chinese government will give us a wonderful deal, including a cushy retirement job for My Pyne.

    • Donald Trump would sell Australia nuclear powered subs, he’d threaten to sell them to Taiwan too if given half the chance. He’s big on supporting home grown manufacturing.

  3. Come on, these ships have to have a few Sydney apartment blocks on the back and a John Symond Aussie Home Loans store.

    30yrs to build 12 submarines with money we don’t have is not a deterrant to anyone.

    • cos we don’t like nuclear.

      The ones we are buying are designed for French nuclear reactors. We converting them to run off diesels and batteries, not even the more modern quiet Swedish Stirling Engines, but WW1 technology.

      • Get a clue, Even the Swedish Subs use MTU diesel engines for the main propulsion system. The Sterling engines are a bit of a joke really, they require Liquid Oxygen to run and still leave you needing to exhaust the combustion gases.. These days I’d be looking at doubling down on the LiIon batteries and forgetting all about exotic external combustion engines. If you really need to charge the batteries while under water than Hot Fuel cells are the go, and the very best were designed by CSIRO.pity we had to get the German’s Italians to make them. No moving parts means Fuel cells are actually silent whereas Sterling engines well they’re not silent but they’re also not as noisy as old oil burners.
        Oh and did I mention that Fuel Cells use Hydrogen as a fuel, so guess what the exhaust product is, Hint: H2O

  4. Brian Toohey is an old fool who knows didly squat about the defence of Australia.

    So we buy off the shelf, from a builder in the northern hemisphere. Besides another nation now having complete blueprints for our most expensive weapon that it can give to anybody, consider this:

    – so if something goes catastrophically wrong, say during a war, we are either sailing our wounded vessels across to the north Pacific, probably past the hotly contested second island chain, OR, we are sailing it across the Indian Ocean and hoping for the best from about the Arabian Sea to somewhere near Sicily. Because that is where we would be taking our vessels without the know how and facilities to really fix them.

    – In the event that we make it that far, we are now, apparently, putting our faith in three nations in particular: Germany, Japan, and France. There were the nations on the original short list. Each has a chequered history in warfare, and each is a so so ally with their own entrenched interests. Germany and Japan are prone to isolationism, and France very much has its own global interests and is more than willing to throw a ‘friend’ under the bus if need be.

    We are a middle power and regional hegemon with significant global interests and a requirement for sea lanes to remain open AT ANY COST. No ifs or buts. Having another power hold such an important aspect of our self defence in its hands is simply unacceptable. Its bad enough that we are so reliant on America, without then also being reliant on a third part…..who may, in the future, clash with our integral American ‘friends’.

    I don’t want any replies about nuclear. Its a non starter for many billions of reasons and it ignores why it is we want this sub capability and what the point of submarine warfare actually is. Unless you are advocating Australian develops the trinity of nuclear deterrence, we do not need nuclear subs.

    • astrolinMEMBER

      Can you name a time when Australia has purchased a completed weapon system from one of our allies such as the French in this case and they have supplied the blue prints and designs to a potential enemy? It’s not only your assessment of Toohey’s standing on the subject that is novel, so is your understanding of how arms deals work.

      • astrolinMEMBER

        “”France very much has its own global interests and is more than willing to throw a ‘friend’ under the bus if need be”” – France’s global interests in our region are partly made up of defending its colonies Tahiti and New Caledonia. That would involve being in partnership with Australia, there’s no bus in sight.

      • In case you hadn’t noticed, we are going through a re-configuring of the global order. If you knew anything about anything, you would know that the pleasantries we have experienced previously are most definitely behind us.

        It is illuminating that you so casually skipped over the conflagrations of the 20th century. Was it not good for your ‘argument’? France fell during WWII, it removed itself from NATO during the height of the Cold War, it decided to maintain its empire at all costs in the 1950’s, it conflicted with us and our US allies during the 2nd Iraq War, etc. It makes all kinds of bad decisions. And you are telling me its a good idea to be 100% reliant on this nation for a period of 40 plus years for probably our most important piece of military kit? France has had three republics in the time we’ve been a nation! Get a grip.

        I also challenge you to work out how the comment section functions before you decide your thoughts need airing.

    • astrolinMEMBER

      “”Germany, Japan, and France. There were the nations on the original short list. Each has a chequered history in warfare””” – what? Can you name a country that doesn’t? No country has won every time and what’s France’s defeat in the Franco Prussian war got to do with the worth of its weapon’s designs some 150 years later anyway?

  5. A lack of an income guarantee allows politicians to give massive handouts to foreign firms under the guise of jobs and these jobs are given to 457 visa staff anyway.

    $100 billion is enough to give the dole to twice as many Aussies for 10 years.

  6. We couldn’t build cars, the local semiconductor industry was trashed in the 70 I was told, we can’t build solar panels, or cars, but we can build subs. I would mind if we built a broad basket of goods. And this i’ll blow out just like the NBN. Nothing makes sense in this country.

  7. SchillersMEMBER

    The coalition government has said the Collins submarines will remain in service and “potent and agile” until their replacements arrive in 22 to 42 years time.
    Minister Pyne surprised by announcing a new formula for keeping the old subs afloat, with periscopes raised and ready for action.

    “It’s called Niagara.”

  8. As with the JSF, there really was very little choice.

    We wanted diesel – electric, and so the options were extremely limited. No option was great, and we probably picked the best of a bad lot given we were not willing to consider nuclear.

    Most of our military equipment comes from USA. However the USA only make and operate nuclear subs. They last made diesel-electric subs back in the 1950’s. The last of this class was retired about 30 years ago, so the USA has no current experience even operating these. So USA was out.

    Several countries make diesel-electric subs – France, Japan, Germany, Sweden, China, and Russia. Thats about it. So buy the design from someone else and make them locally under licence. I guess this is good for jobs, and it does also mean we have some domestic maintenance / repair capability rather than transporting long distances through potentially insecure waters.

    Or we could design and make our own. Very high risk with guaranteed over-budget and delays, and likely under-specced as a compromise to try and limit time and cost blowouts.

  9. Jumping jack flash

    Despite what ppl say about “teh blooprints”, I can’t exactly see the problem with simply buying OTS and making a small change.

    Buy the OTS nuclear ones from Russia/China/US/France/whoever, take out the nuclear part, and then fit an OTS diesel engine into them.
    Surely that should be enough of a change to void the OTS blooprints that could be sold. Shouldn’t cost anywhere near an extra 100bn either for a handful of diesel engines. (considering the OTS subs cost somewhere around 100bn)

    The company I work for was able to find a reconditioned boiler that ran on biomass from darkest Vietnam, so surely our desire for putting diesel engines in things, rightly or wrongly, could similarly be satiated from the depths of some 3rd world country somewhere that also likes diesel engines in things. Maybe they should try looking for diesel engines on Gray’s Online or something?

    It’s amazing what you can find when you look in the right places. Bargains, everywhere.

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