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Did we just spend $1 trillion dollars to buy Malcolm Turnbull a job?

When the Coalition released their Defence white paper in February this year, they recommitted to Tony Abbott’s arbitrary goal of raising defence spending to 2% of GDP by 2023 and outlined a very large defence materiel spend over the next two decades.

This became very important in Turnbull’s election campaign as it was the only thing he could point to when asked for specifics to back up his Jobson Grothe slogan. Promises were made, particularly in South Australia where the Xenophon team posed a real threat, and Turnbull assured us we were investing in a whole new defence industry for Australia.

But at what cost?

Mark Thomson, senior analyst at the Australian Strategic Policy Institute and widely regarded as the country’s leading independent defence budget expert, has calculated that the increase will push total defence spending to more than $1 trillion over the next 20 years, accounting for inflation.

“They’ve committed an awful lot of money out there. Even if they wanted to renege on the 2 per cent, they’re probably going to come bloody close to it anyway,” Dr Thomson said.

Those promises included new planes, an upgrade to the Army’s Steyr rifle, new offshore combatant vessels, new frigates, a new grenade launcher, a replacement armoured vehicle fleet and initial work on the new fleet of 12 submarines.

“The [submarine] design work is going to cost a pretty penny,” Dr Thomson said. “You add to that the Joint Strike Fighter, the P-8 [surveillance aircraft], there’s a very sizeable investment budget out there that is going to help them … ramp up towards the 2 per cent.”

Based on last year’s budget, it would take an average of 4.5 per cent growth a year to 2023 to reach the 2% target. However, the target has many critics, including Dr Thomson, who says it is an arbitrary way to project defence spending. Former chief of army David Morrison also expressed doubt about its usefulness before he retired.

“Picking an arbitrary number like 2 per cent of GDP will almost certainly not give us the optimum allocation for preparing Australia for the raft of economic and strategic risks ahead,” Thomson said, suggesting it would delay a return to surplus.

On Monday, the Productivity Commission released its annual trade and assistance review which quantifies the level of assistance governments give to Australian industry. It was highly critical of the big defence spend.

“Paying more for local builds, without sufficient strategic defence and spillover benefits to offset the additional cost, diverts productive resources (labour, capital and land) away from relatively more efficient (less assisted) uses,” the report says.

“It can also create a permanent expectation of more such high-cost work, as the recent heavily promoted ‘valley of death’ in naval ship building exemplifies. Such distortion detracts from Australia’s capacity to maximise economic and social wellbeing from the community’s resources.

“The recent decision to build the new submarines locally at a reported 30% cost premium, and a preference for using local steel, provides an illustrative example of how a local cost premium can deliver a very high rate of effective assistance for the defence contractor and the firms providing the major steel inputs.”

The commission says close attention to future evaluation of the effectiveness and efficiency of the revised defence industry support program is “paramount”.

Today, Australia has 58,000 personnel in its defence force and that will grow to 63,000. There are also 18,000 public servants looking at threats, guiding policy and planning for security.

When the experts are telling you that this huge spend is unproductive, one has to wonder.

Did we just spend $1 trillion dollars to buy Malcolm Turnbull a job?

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  1. Turnthetide

    If it means protecting our country then yes it is worth it.

  2. Kaye Lee

    Protecting the country from what?

  3. Kaye Lee

    I can’t figure it out. That’s why I asked. Could submarines or jet fighters have saved Curtis Cheng?

  4. Glenn K

    We are an extension of the American military/industrial complex, and we are getting ripped off and played for patsies.
    Turnthetide – you go figure that one out! Australia does not need such a large offensive capacity, unless of couse we need to fullfill our lapdog role to the USA (and for very dubious benefit).

  5. Kaye Lee

    Glenn K,

    The US Air Force Combat Command has warned the US must continue to maintain its older, more agile and far more effective fleet of F-22 jet fighters to back up the F-35s or they’ll be rendered irrelevant. So should Australia instead try to buy the proven F-22? Well, according to the Defence Minister, Australia did ask, but the Americans insisted there was no choice, but to take the troubled F-35 or nothing.

    DAVID JOHNSTON: They’ve said, “No, you can’t have the F-22; that is for the United States Air Force. But you can certainly participate in our program with the Joint Strike Fighter.” We do not have anywhere else to go.

  6. townsvilleblog

    Glenn K has come closest to an explanation, however not a rational one, who do we expect to attack us in the near future that couldn’t be handled with our current war planes? If the answer is “reds under the beds” Russia, forget it, if China, we would be immediately over powered so why spend this horrendous amount of money on killing machines instead of “people.” I I temporarily forgot the three party system doesn’t value “people” unless or until someone shames them into acting (today’s RC) The L&NP/LNP love to prop up the yank war machine, just another few corporations who don’t pay any tax for the upkeep of Australia or Australians, but who we need to keep shoveling “our” taxation money into them. When you have ignoramuses like turnthetide who live in fear of hordes of invading soldiers taking our precious freedom away from us, I’ve got news. After this Census only the old people in nursing homes will have any privacy because they do not have computers.

  7. Kaye Lee

    The Government claims the submarine project “will directly sustain around 1100 Australian jobs and a further 1700 Australian jobs through the supply chain”.

    That’s significantly less than the jobs cut from the ATO alone. Dividing $50 billion by those 2800 jobs the PM talked about makes them worth almost $18 million each.

    As for manning the submarines, we can’t get enough people to man the six we have. In February, just as the White Paper was being put to bed, it was reported RAN submariners will be given annual lump sum payments of up to $50,000, and other inducements, just for staying aboard.

  8. Peter F

    Well, Kaye, you know how effective submarines can be – with only six we have managed to stave off all attacks for decades. Who knows how many potential invaders have been sunk in our defence.

  9. Terry2

    I think we could get much more value out of an automobile industry than we will ever get out of these submarines which will be obsolete by the time they hit the water.

    Perhaps we could give Tesla or another such innovator some incentive to establish an agile industry here : submarines are not agile.

  10. Kaye Lee

    Peter F,

    The Submarine Service has not seen combat since World War I.

    A key Pentagon adviser and submarine expert Bryan Clark told Lateline last year that new technology could make submarines easier to find and therefore ineffective.

    He predicted the era of undetectable subs would probably come to an end in the next 10 to 20 years because of these new detection technologies. This could kill the usefulness of Australia’s submarine program, even before the first boat hits the water in the late 2020s.

    Other new technology such as underwater drones would also become more popular because they were cheaper, meaning countries could have more of them. Operations would also not risk the lives of crew, making them better for dangerous missions.

  11. Kaye Lee


    Apparently we can afford $50 billion for subs but not $45 billion for FttP NBN. Which would boost productivity more? Not to mention the Gonski education funding.

  12. Jennifer Meyer-Smith

    If Malcolm says Australia can afford to pay 1 trillion dollars for war machinery and copying US war building, then Malcolm Muck can afford to pay 1000 trillion dollars for:

    micro finance for micro businesses to enhance self-employment opportunities for our unemployed and under-employed people; affordable housing;
    restricting negative gearing to multi-house rent seekers;
    government finance for low and no income people to swap their rental properties for their own home owned properties with affordable mortgage and interest payments.

    I can go on but I think even Malcolm Muck and his minions can get this message.

  13. townsvilleblog

    Terry2, Yes I agree a new motor vehicle industry if the L&NP/LNP three party system can build submarines surely they can build cars. Just offer the yanks a few bob for their deserted vehicle manufacturing factories and take up the Tesla idea and create thousands of jobs and have the pride in an Australian car built to Australian specifications, re-employ thousands of workers and cut the emissions at the same time. No, I agree far too progressive for a tired old tory government to vision.

  14. Möbius Ecko

    That 30% premium over and above what the subs cost would have saved all our car manufacturing, our steel industries and aided a lot of other SME manufacturing companies in staying viable, and it would have employed a vast amount more than the submarine program will.

    Yet as stated, apart from a handful who will remain for sustainment, once the subs are completed we are going to have a bunch of extremely high skilled manufacturing specialists with nowhere else to be employed.

  15. townsvilleblog

    JMS They get the message alright but if the Australian bogans continue to vote them into government, what can we do? I’d like to see all these war corporations pay their fair share of tax in Australia also, but the drongo’s rejected that proposal. I’m still trying to come to terms with the stupidity shown, Victoria got rid of Napthine L&NP, Queensland rid itself of the Newman LNP, GOLLY GOSH, why couldn’t Australia rid itself of the Turnbull L&NP/LNP, both of the others were first term.

  16. z

    Natural and geographical environment decides that Australia doesn’t need to spend 2% GDP on defend and military cost, if so, it is purely for the purpose of domestic & international political reasons, the truth of the matter is that no any country were threaten Australian national security and never ever in the future, that is simply a proven fact

  17. Turnthetide

    What makes you think Labour would be any better. No one seems
    have a vision for what is right for this country! They are all a bunch of bloody drongos if you ask me! Too busy making themselves shine in the eyes of the world over Refugees to bother about what is good, fair and right for AUSTRALIANS and AUSTRALIA!

  18. Turnthetide

    Oh I so disagree with you! The more Muslims we allow in this country the more danger we are in in the future. We are sitting ducks for any country surrounding us! If you think this country is untouchable and infallible then you sir/madam are a fool!

  19. Jennifer Meyer-Smith


    yes, why couldn’t we get rid of Malcolm and his Degenerates after one term? Stupid bogans and selfish, scared little bastards allowed the Parakeelia Crooks to get away with ‘bloody murder’.

  20. Matters Not

    If China decides to engage with us, the best investment would be a 1 300 number with a recording in Mandarin – We surrender! While we may have a dozen or so subs in the distant future, China already has 70+ subs and who knows how many they will have by then. Assuming of course, subs aren’t in the historical dustbin by that time.

    Rather than invest in military toys (yes we probably need some for photo opportunities and the like) we should focus on ‘soft’ power. Instead of cutting foreign aid we should be increasing that dramatically. We should be offering Chinese students educational ‘opportunities’ (at cheaper rates than present). We should also be offering more Australian students the chance to ‘exchange’ with China.

  21. Jennifer Meyer-Smith

    Welcome Turnthetide,

    now open your ears and eyes nice and wide coz you might learn something from us more enlightened commenters!

  22. Kaye Lee

    Your irrational fear of refugees, people who have fled from war and oppression, scares me. Who is Australian in your view Turnthetide? At 30 June 2013, 27.7% of the estimated resident population was born overseas (6.4 million people). How does spending a trillion dollars on weapons of war do anything but exacerbate the refugee crisis?

  23. townsvilleblog

    The L&NP/LNP government need not worry about cost, if they are short on any program they will just introduce a great big new tax on everything to pay for it, the tragedy is it will be “us” yet again who will be paying for these outrageous expenditures because the L&NP/LNP refuse to tax the corporations who make trillions out of us as we learnt last December from many sources the 579 corporations who had not paid a cent since the “tories” were elected in 2013. So it will all fall upon our shoulders, they will cut funding in other areas to fund their military obligations to the USA masters. Look at nursing homes on display today, nowhere near enough supervision because the tories will not increase the funding for “people” activities. Seeing that poor old man being hit and teased today was disgraceful, and I know when my own time comes sooner rather than later I will become just another suicide statistic rather than face a nursing home 10 years on. The L&NP/LNP have really destroyed everything it ever meant to be Australian in three short years. I have lost the will to live, my only goal now is to vote in the next election and see these mongreal breed bastards kicked out of office then I will go.

  24. Jennifer Meyer-Smith

    I am in full agreement with MN!

  25. townsvilleblog

    JMS Great comment: Welcome Turnthetide,

    now open your ears and eyes nice and wide coz you might learn something from us more enlightened commenters! There is a lot of brain power residing with you lot, and yes ‘he’ might learn something.

  26. townsvilleblog

    JMS as I said earlier in the conversation: forget it, if China, we would be immediately over powered so why spend this horrendous amount of money on killing machines instead of “people.”

  27. Möbius Ecko

    ” Instead of cutting foreign aid we should be increasing that dramatically. We should be offering Chinese students educational ‘opportunities’ (at cheaper rates than present). We should also be offering more Australian students the chance to ‘exchange’ with China.”

    Not just China Matters Not, but most of the major players in our region, and probably the most important, more so than China in my opinion, Indonesia.

  28. Kaye Lee


    I understand how overwhelming it can be at times but never give up. The more we expose, the more we discuss, the more chance we have to make change. We do tend to concentrate on the bad but there are many heartwarming stories out there showing that many truly good people really do care. We will never have a perfect society but we can each do our bit to show compassion and kindness.

    I pity those who prefer fear and hatred and discrimination. They are part of the problem and will never be part of the solution.

  29. Turnthetide

    Oh yes thou knowledgeable one who knows all! Who the hell do you think you are?

  30. diannaart

    $1 triilion to justify fearmongering campaign. We will always have fear if we continue a divisive world.

    Jennifer got it right with far more necessary projects this money could be spent on.

    micro finance for micro businesses to enhance self-employment opportunities for our unemployed and under-employed people; affordable housing;
    restricting negative gearing to multi-house rent seekers;
    government finance for low and no income people to swap their rental properties for their own home owned properties with affordable mortgage and interest payments.

    Inequality is the basis for most of our problems. $1 trillion will not be anywhere near enough to protect us from the repercussions of our inequitable society.

    I am not saying we should not spend on defence (not offence – which $1 trillion would explain more fully) – I do question how it is justified against necessary spending to benefit the greater good.

  31. Turnthetide

    Do you ever do anything else? Is this your job to criticise everyone who doesn’t think the way you do? Go take a holiday lady! Better still go join the bogon politicians. Right up your bloody alley!

  32. Jennifer Meyer-Smith

    Same hear townsvilleblog!

    Don’t let the bastards browbeat you and make you feel worthless. Your insights are much appreciated.

    I also think the decision to waste all that money on some pathetic submarines is a waste of time considering the size of us and the size of them. It’s just another example of scratching Big Biz’s back.

    Making friends with the world by human exchange programs (and not unfettered trade deals like ChAFTA or TPP), generous foreign aid, humanitarian support, high profile in the UN, high profile in International Criminal Court and other world building operations is the way forward for a better future of friendship not fear.

  33. Matters Not

    ME, I agree that China shouldn’t be the only focus or even the main one. And yes Indonesia is beginning its long march and we insult them at our long term peril.

    We have the technological, scientific and the like, mountains of knowledge that we should ‘invest’ with our Asian neighbours. Yet we seem blind to the obvious, and instead we see the rise of Hanson et al who want even more cuts to foreign aid. Just dumb.

    As an aside, Turnthetide why don’t you present ‘reasoned’ arguments and make your case. This site proceeds on that understanding.

  34. Kaye Lee

    Speaking of work….

    Do you really think it is wise to use your work email when making such comments Turnthetide, particularly since it is a government department address.

  35. Michael Taylor

    Oh FFS Turnthetide, you are a sour, miserable, moaning twat. Do us all a favour and piss off.

  36. Jennifer Meyer-Smith

    Oh no Turnthetide,

    you’re not that stupid, are you? Isn’t your boss looking over your shoulder?

  37. Matters Not

    The boss doesn’t have to be looking over the shoulder, the technical people already know what’s going on. That’s part of their job. Just ‘giving more rope’ at the moment because so far it’s probably not a sackable offence. But desist or the tide will turn leaving you high and dry.

    The advance of technology makes privacy is a thing of the past.

  38. metadatalata

    Somebody needs to tell France about the submarine building plans in Australia because their government had announced that they will be building most of Australia’s submarine contract.
    Australian politicians would not be telling us lies about who will be actually building these subs, right?

    Turnthetide: so full of hate I feel sorry for him….

  39. Robert Mutton

    The article asked – ‘did we buy Malcolm a job’? I think we’ve missed the point! Malcolm doesn’t need a job, but Chrissy Pyne might in the future as more and more in his electorate wake up to him. As Minister for Defence Materiel [or whatever the title is], he’s in the right place to pick up a lucrative position with a US or French or anywhere else armaments manufacture after politics. He’s laughing all the way to the bank!
    Have a nice day!

  40. Kaye Lee


    Same with the fighter jets.

    TONY ABBOTT, PRIME MINISTER (April 23): Australian business has already won some $1.5 billion worth of work associated with this aircraft. Up to $7.5 billion worth of additional work is there potentially.

    GREG HOY: In fact, so far, Australian industries are only contracted for around $370 million work, with Lockheed Martin assurances but no guarantees of more to come.

  41. mark

    Life is love and death is hate.mark

  42. Peter F

    Kaye, for once I think you did not notice where my tongue was. thanks for all you posts – I look forward to them.

  43. David

    I am amused by the arguments here, on both sides. When you realize the whole world is being groomed for another war, and Australia is part of the 5 + 1 Eyes (US, UK, Canada, Australia, New Zealand + Israel), it matters not what the people of those countries think or do. Our politicians are owned by the families who own the Main Stream Propaganda Media, the Intelligence Agencies, the Banks, the Religions, the Military Industrial Pharmaceutical Complex and all the other Circles of Power. This is not based on conspiracy theories, but the simple fact that our world has been groomed as detailed in the blueprint published in the Protocols of the Learned Elders of Zion. I know it is a hoax, but it seems to be remarkably accurate in predicting our current environment. Instead of arguing about all this, why not just buy shares in the ETF for the Defence Contractors who are taking all this “investment” money…

  44. Kaye Lee

    Why would the world go to war? It would completely stuff up global trade costing them kazillions. I know the arms manufacturers might be happy but others who rely on supply chains and markets wouldn’t be. Wars cost a shit load of wasted money. I can’t see it happening myself.

    Peter, I got the humour 🙂 It just gave me a lead in to provide more information.

  45. Peter F

    Thanks Kaye, and of course it is not funny at all.

  46. jimhaz

    I think the LNP give high budgetary weight to defence spending not just because of the type of personalities they have in terms of being scared or using scare tactics to obtain votes, but because the more they in this area, the smaller the other parts of government will have to be.

    It takes out spending scope for the ALP to increase distribution – unless the ALP increase taxes, which they can then complain ferociously about. This also gives them more control over other areas such as pay and conditions regression for the masses, which would aid business owners, and that is partly why we have seen them hardly concerned at all about the deficit once in power (they never actually were, they just don’t like the oppositions forms of spending as it limits their own graft to supporters).

    Again they’d rather give money to big dirty multinationals than to other Australians. The rich in Australia won’t mind. They probably have security paranoias and would prefer what tax they do pay to go into the security arena, not on all the “lazy incompetents’ they hate to think might be bludging on what taxes they are forced to pay.

    I also like MN’s suggestion – more security could be achieved via ‘soft’ power – however that is dependent on what percentage of GDP the target country spends itself on defence. That would exclude a lot of asian countries.

  47. Terry2

    Labor are leading by 41 in the Herbert recount at the close tonight which has promped the LNP to call for a fresh election in that seat :

    “If the final recount ends with Labor ahead, it is likely the LNP will launch action in the Court of Disputed Returns.

    But a decision on this won’t be made until the result is formally declared.

    LNP senator Ian Macdonald told AAP there were two issues that needed investigating.

    One was the possibility that soldiers based in Townsville were among 628 ADF personnel who were on Exercise Hamel in South Australia during the election campaign and did not cast their votes.

    The other is whether 39 patients at the Townsville hospital were denied a vote in the late afternoon of election day.”

    How could soldiers on exercises not have done absentee votes, surely they would have received the LNP letter with pre-poll application form like the rest of us ?

  48. Kronomex

    @turdthetide, oops, turnthetide. The epitome of a nasty little LNP troll.

  49. Bruce Goddard

    I have no doubt that if these Dinosaur Subs are ever built the MUA will blow out the cost & delivery date many times over. The final result will be an obsolete heap of junk the Russians will hear coming all the way from Mocow. By then I’m sure there will be a $1,000 Satnav controlled drone that can deliver enough ordnance to destroy a multi billion dollar submarine coffin by remote control. Talk about an own goal by that joke of a defence minister, Marise Pain.

  50. Kaye Lee

    These are just a few quotes from the Defence White Paper…..

    Over the decade to FY 2025–26, Defence will invest around 25 per cent of the Integrated Investment Program to enhance Australia’s maritime and anti-submarine warfare capabilities.

    MH-60R Naval Anti-Submarine Warfare Helicopter (24 helicopters) ($1.9bn)

    9 anti-submarine warfare frigates to replace Australia’s existing fleet of 8 Anzac Class frigates
    Future Frigate Program – Evaluation, Design & Construction (>$30bn)

    When taken together, the projects to replace our existing fleets of submarines, frigates, destroyers and patrol boats will be worth well over $100 billion dollars over multiple decades for the acquisition phases alone.

    The scale and complexity of the planned investment in maritime and anti-submarine warfare capabilities is immense

    The Government has determined that regionally superior submarines with a high degree of interoperability with the United States are required to provide Australia with an effective deterrent, including by making a meaningful contribution to anti-submarine warfare operations in our region. The key capabilities of the future submarine will include: anti-submarine warfare; anti-surface warfare; intelligence, surveillance and reconnaissance; and support to special operations.

    During the long life of the new submarines, the rapid rate of technological change and ongoing evolution of Australia’s strategic circumstances will continue. As part of the rolling acquisition program, a review, based on strategic circumstances at the time and developments in submarine technology, will be conducted in the late 2020s to consider whether the configuration of the submarines remains suitable or whether consideration of other specifications should commence.

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