BREAKING. URGENT CANBERRA MEETING. WAR?

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This article is from the September 17 issue of The Australian Digital Edition.To subscribe, visit https://www.theaustralian.com.au/.
ROBERT GOTTLIEBSEN

Australian history is studded with “con tricks” and “con artists” but no onehas ever attempted – and for six years apparently succeeded in – a $270bnconfidence trick.

Back in 2016 the French “conned” Australia to go with the massive submarineproject. As I explain below, by stopping the contract we now have a magnificentopportunity to transform not just our defence, but our nation.

The 2016 error by Australia’s defence people and the Coalition government wasso huge that I feared we would not gain a defence minister with sufficientcourage to face the facts. Then Australia got lucky.

The Brittany Higgins affair meant that Australia would need a new defenceminister to replace Linda Reynolds. I pleaded that there were only twoministers in the cabinet with the potential strength to face the truth aboutour defence equipment mess. One was Josh Frydenberg but there was no way hewould be transferred from treasury.

The second was Peter Dutton.

To Scott Morrison’s great credit he appointed Dutton to the job. It’s not easyto admit a $270bn mistake but that’s what Dutton, along with his assistantAndrew Hastie, did on Thursday, September 16, 2021 – a historic day in ournation’s history.

And better still they replaced the French “con trick” with what we should havedone in the first place – a link with the US and Britain in a nuclearsubmarine.

My first warning that Australia but we might have been “conned” came three daysafter the announcement on April 29, 2016. Countless commentaries have followedand I want to thank all the people who have helped me with information and gaveme the courage to keep writing when I seemed alone.

My readers were wonderful, including those who suggested I should confinemyself to business commentary. I also want to thank News Corporation. They werebeing told a different story by defence people but they never wavered inpublishing my submarine commentaries. For those who want to know the detail ofhow the “con trick” was organised, I direct you to our website and my February17, 2020 commentary titled “French negotiators misled Australia on submarinescontract” .

I also point out that from day one the Americans were horrified that Australiahad made such a terrible mistake and they tried to warn us via theirrepresentatives on the naval board of advice, but we ignored them.

The Americans did not trust the French security (there had been too manyleaks), yet we were asking the Americans to put their advanced combat submarinesystems on a submarine the French were designing. They agreed to do it buteveryone knew that we would get a second-rate combat system. The 2016 estimatedtender price for the French submarines was in the vicinity of $23bn, in 2016dollars.

Defence officials desperately tried to keep a secret that the base costs hadballooned and construction was headed to be around $150bn, inflation-adjusted .But the operating costs would take the total bill to around $270bn. And thesubmarine fleet that relied on outmoded lead acid batteries would not beavailable until 2040 and beyond. Crazy.

Defence officials desperately try to keep the original cost estimate secreteven though it had been announced in April 2016. To be fair to the Navy, italways believed a nuclear submarine was best for Australia but back in 2016that was not politically possible.

It’s somewhat ironic that my last commentary was this week under the heading:“Has lesson been learned from defence debacles ?”. The commentary made thepoint that defence officials were totally consistent in their ability to getmajor decisions wrong.

We still have the Joint Strike Fighter/F-35 disaster and the frigate mess tosort out. But the submarine was the biggest error.

I urge Peter Dutton and Andrew Hastie to get the backing of really top defenceequipment people in this new nuclear project, as well as in trying to sort outthe Joint Strike Fighter and frigate mistakes. We must make sure that out ourindustry is involved in the solutions to all three projects.

The temptation will be to go down the conventional nuclear submarine route butthe Chinese are now well advanced in molten salt nuclear-cooled nuclearsubmarines and this technology has the potential to generate carbonfree energywithout the current nuclear dangers. It can transform vast parts of ourindustry.

I know the government will be in deep shock over the submarine debacle but wewill need to lead the Americans in this new era.

There also some lessons. Ministers need to make sure but they had the very bestpublic service advice and not just rely on their hand-picked personal staff.Defence did not have the right people . The federal parliament needs to realisebut they have been fed lies and half truths, not just over the submarine butthe Joint Strike Fighter and the frigate contracts. The Labor opposition shouldhave made defence a pivot point in attacking the government but they did not dothe work. I must congratulate Senator Rex Patrick for his work in this area. Hemay have got the tax confidentiality issue wrong but in defence he was a lonepolitician seeking the truth.

I am getting the distinct impression that while the Morrison government expectsto win the next election, they know that it will be very difficult.

They have between now and May 2022 to do the things that need to be done. Thebiggest was clearly the submarine contract. But we also desperately need aproper and fair tax collection system .

Just as Dutton had the courage to do the right thing by the nation irrespectiveof the political consequences , so must Josh Frydenberg , Michael Sukkar,Stuart Robert and Michaelia Cash do the right thing by the nation in tax. Ithink they will

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thanx for this recap and analysis.. I just sharing thoughts in terms of the int perspective - I think we must seal wisely the submarine deal but also I think the french behavior in this entanglement is irresponsible, especially with calling back the diplomats, it doesnt build trust and worst, it signals to Iran&Russia&China front severe weakness. I am not big on defense spending and armoring, but I do recognize that alliances incentives and behaviors have been shifting in our part of the world and Middle East and we must adapt accordingly. So here is my question, do you think the contract should be re-negotiated to please france and Germany as well as USUK, or that the prior are just faking their anger and will fall in line ?