Australia seeks to rein in defence spending blowouts, delays
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Australia’s Minister for Defence Industry Pat Conroy said an internal review found the average cost of defence projects increased by 38 per cent from project conception to government decision.
PHOTO: REUTERS
- Australia will create a special agency to better manage defence projects and reduce cost overruns and delays.
- The government plans to reform cost assessment and reduce bureaucracy to improve project delivery.
- Defence spending will increase to 3% of GDP by 2033 amid major military build-up and new defence technologies.
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SYDNEY – Australia announced changes on July 2 to the way it manages the delivery of defence projects, aiming to curb billions of dollars in cost overruns and lengthy delays.
The government said it would establish a special agency to oversee defence project delivery, overhaul the way project costs are assessed, and streamline decision-making by cutting bureaucracy.
The decision comes as the country undertakes a major build-up of its military capacity, with projects including the AUKUS nuclear submarine pact, a continuous naval shipbuilding programme and investments to develop domestic missile and drone industries.
“For too long, Defence has struggled to deliver major capability projects on time and on budget,” Pat Conroy, Minister for Defence Industry, said in a statement.
In a speech in Canberra unveiling the reforms, Conroy described the department’s systems as “broken”.
“The fact is these systems were designed for a very different world,” he said. “Through these reforms, we’re making sure that when Defence is developing capability projects that we’re setting them up for success.”
He said an internal review found the average cost of defence projects increased by 38 per cent, or A$29 billion (S$26 billion), from project conception to government decision.
“The way Defence was operating had become outdated and compromised for at least the last decade,” Conroy said.
The government in April announced it would raise defence spending to 3 per cent of gross domestic product by 2033 from about 2 per cent. REUTERS
