Audit office urges department to crunch the numbers again on the $89bn program

This article is more than 2 years old

This article is more than 2 years old

The tight timeframe on building Australia’s nine new Navy frigates has the potential to embarrass the government, the auditor’s office has warned.

It’s also worried the Defence department has given second-tier approval for the offshore patrol vessels project without knowing maintenance costs or finalised commercial arrangements.

The Australian National Audit Office is urging Defence – in line with a 2015 undertaking – to crunch the numbers again on the national naval shipbuilding plan and advise the federal government if it needs a top up.

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But the Defence Department is refusing to double-check that $89bn is enough to cover the program over coming decades.

“Offsets are recommended to government if there is a shortfall between the funding requirement and existing provision,” the department said.

Twelve new submarines, nine frigates and two new offshore patrol vessels are set to be constructed in Adelaide, while Perth will host the building of 10 offshore patrol boats and 19 Pacific patrol boats.

The report, released on Monday, also pointed out Defence’s workforce plan to address labour and productivity requirements across the naval construction programs was late.

It was due to be finalised last December but as of mid-February was still a work in progress.

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In addition, the report found a slated Naval Shipbuilding College for South Australia had blown out by 2.5 times the original cost estimate of $25m.

“Ongoing operational costs for the college have not been considered but will need to be met from shipbuilding project budgets,” it said.

Labor’s defence spokesman Richard Marles has seized on the report.

“The Liberals’ obsession with prioritising announcements over our national Defence capability needs has been panned (in the audit report),” he said.

“Competent ministers who cared more about building and ensuring our national defence needs than getting their names in the paper would not have let this happen.”

