Australia sees skyrocketing defense costs and long project delays

(Bloomberg) – Dozens of major Australian military equipment acquisitions are billions of dollars over budget and years behind schedule, the defense minister said, while warning that the country is facing its “circumstances most difficult” since the Second World War.

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Richard Marles, who is also deputy prime minister, said 28 major projects were behind schedule, including Australia’s new Hunter-class frigates and P-8A Poseidon jets. There was also a cost overrun of at least 6.5 billion Australian dollars ($4.1 billion) in 18 projects, Marles told reporters in Canberra on Monday.

As a result, Marles said he expects defense spending to reach 2.2% of gross domestic product over the next decade, up from 2% the previous fiscal year – and higher. than other Western countries, including Canada, France and Italy.

“Given the current strategic circumstances we face, we need to focus more on the quality of spending within defense to ensure that we provide our Australian Defense Force personnel with the best capabilities,” Marles said.

Tensions between Canberra and Beijing have escalated rapidly in recent years, resulting in military clashes between Australian and Chinese armed forces in the South China Sea and off the Australian coast.

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The army has repeatedly encountered difficulties with its plans for the purchase and maintenance of equipment. Problems with a fleet of MRH90 Taipan helicopters led Australia to request 40 Black Hawk helicopters from the US government to replace them, at an estimated cost of $1.95 billion.

While the sale was approved by the State Department in August, Marles told the Australian Broadcasting Corp on Monday. that the government was still deciding whether to proceed with the purchase.

Marles blamed the spike in costs on the previous government and pledged more transparency on defense procurement, including monthly reports on delayed projects and the creation of an independent regulator within the Ministry of Defense. .

Australia faced “the most difficult circumstances since the Second World War”, he said.

Australia’s defense spending is set to increase further, with the AUKUS nuclear submarine pact and an announced rapid expansion of military personnel not yet factored into spending.

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