The nuclear-powered subs decision is the paragon of the PM's obsession with announcements over substance — with a truly spectacular cost.
(IMAGE: GORKIE/PRIVATE MEDIA)
It’s taken 24 hours, and the emergence of some actual details, to realise just how awful a decision Scott Morrison has made to embrace nuclear submarines. It’s as if this government has a default setting of making the worst possible decisions when it comes to submarines.
A simple recitation of the facts of AUKUS will illustrate this. Morrison has:
- Torn up the existing submarine contract, based on majority-local build, five years and $2b-plus in, with a break fee of at least $500 million to come
- Gone back to square one with an 18-month study
- That study will examine how Australia will buy fewer subs, for even more money, most of which will be built overseas a decade later
- Those subs will require more than twice as many people to crew and a whole new industry to maintain, when Australia can barely crew its existing fleet
- Australia will have no option but to accept the least-worst option the study comes up with
- The country with whom the existing contract was signed was completely blindsided and holds the whip hand over a trade deal with Europe and the potential for carbon tariffs on Australian exports. It’s also a country we’ve been working hard to get more engaged in our own region. France is mortally offended and unlikely to forget being stabbed in the back by ourselves and the Americans.
It would have been straightforward to do this very differently: conduct the 18-month study of nuclear vessels in secret, present the results to Naval Group — a manufacturer of nuclear-powered submarines — and ask if it can match or beat it, injecting some competitive tension into the process, and not enraging the French who would have had a crack at retaining a subs contract. There’d have been no additional delay.
But as we’ve learnt about the prime minister, he’s all about announcements. Actual competent management is beyond him.
Somehow we’ve ended up locked into the outcome of an unknown process that will inevitably deliver a program worse than the existing one in every single way — cost, timing, local content, number of boats. The Americans or the British — most likely the Americans — can present us with whatever deal they like, confident we’re not going to refuse. We can’t go back to Naval Group in 2023 and ask it to revive the contract — not without a 20% hike in costs, total humiliation and a break fee with two extra zeroes on it.
Morrison will be long gone from politics by the time construction starts — in Virginia and Connecticut, not Adelaide — and safely beyond the reach of any political accountability. His successors, however, will be stuck with a decrepit fleet of Collins-class vessels filling in another extra decade.
