“National disgrace” submarine debacle blows out to $90 billion


The Department of Defence has told a Senate estimates hearing that Australia’s new submarine fleet is now expected to cost $89.7 billion. This is a 12% increase on the previous estimate of $80 billion in November.

Defence says the revised forecast takes into account factors such as foreign exchange rates and inflation when expenditure on the submarines project actually begins. Work on the first of 12 submarines is not slated to begin for several years, and the first vessel will not go into active service until at least 2034:

Defence told Senate estimates that the cost of the 12 Attack-class boats in 2016-17 dollars was unchanged at $50bn. But the “out-turned” cost of the French-designed boats — the cost when the money will be spent — is now estimated at $89.7bn… [And] it doesn’t include the whole-of-life cost of about $145bn of sustaining the boats…

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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.