It’s been on the streets for a while now, but I’ve just got around to the Australian National Audit Office’s most recent annual review of Defence major projects. It’s a thoroughly useful compendium of data provided by the DMO, with an overview and critique from the ANAO.

There’s no headline story in the latest edition. As I noted last year, the data shows the project management benefits of military-off-the-shelf (MOTS) purchasing compared to development projects. In between those options there’s ‘Australianised MOTS’—modifying MOTS equipment to meet Australian requirements. The data set includes six development projects, 16 Australianised MOTS (AMOTS) and 8 MOTS. Consistent with previous observations that schedule is a bigger problem than cost, there’s little in the way of cost overrun in the portfolio of projects. But the schedule results speak for themselves: Read more

While high profile Defence projects like the Joint Strike Fighter and future submarine have received plenty of coverage, much less has been written about LAND 400—a proposed $10 billion purchase of armoured land combat vehicles for Army. Recent media reports focus on the politically-charged question of where the vehicles might be built, with state governments vying for potential employment opportunities. Of greater strategic importance however, is the broader debate about the future of Army and its place in Australia’s defence strategy. The debate is fundamental to many capability projects but the key question for LAND 400 is whether Army’s primary role should be leading non-conventional missions such as the Timor-Leste and Solomon Islands stabilisation missions, or fighting conventional wars.

LAND 400 is one of Defence’s most expensive capability projects—in fact it’s one of the big four identified by Defence seniors (PDF, p. 22) as having the potential to distort the Defence Capability Plan. It’s intended to provide Army with a suite of armoured vehicles to bolster its close combat capability. The project is expected (PDF, pp. 75–76) to result in about 1,100 new vehicles that will replace or enhance (PDF, p. 3) the capabilities currently provided by the Vietnam vintage Armoured Personnel Carrier (M113), Australian Light Armoured Vehicle (ASLAV) and Protected Mobility Vehicle (PMV) fleets. Read more

Although it went largely unnoticed, at the end of October the Australian National Audit Office (ANAO) released its performance audit of Capability Development Reform in Defence. It has all the weaknesses, strengths and charm we’ve come to expect from the fine folks at the audit office.

Its major weakness is a focus on compliance at the expense of outcomes, but that reflects the nature of performance audits rather than an error on the behalf of the authors. And, by testing Defence’s implementation of the 2003 Kinnaird and 2008 Mortimer reviews of acquisition, much of what matters is covered in any case.

As with prior ANAO audits, the report’s strength comes from the systematic examination of evidence. Time and time again, the audit office has shown that some of the most damning indictments of Defence can be found sitting in that organisation’s own filing cabinets, or by comparing its public pronouncements to its actual performance. Read more

New Zealanders have always discounted claims that Canberra’s defence purse-strings are being tightened—until now. The days when the proportion of Australian GDP devoted to defence was twice the New Zealand level of roughly 1% appear to be over. Gone too is that long era in which a succession of governments (Liberal-National and Labor alike) never once saw a capability proposal they didn’t like. The Defence Capability Plan, replete with its 180 items, is about to have a Jenny Craig moment—or at least that is what should happen as a result of the funding changes being administered by the Gillard government. If elected, an incoming Abbott government would be unlikely to quickly reverse the very significant reductions that Stephen Smith has demanded in an era of depleting federal coffers. The piñata party which characterised Australian defence decision-making for nearly a generation has ended.

There are some ironic twists in all of this. One is that Australia’s strategic weight might be slimming down just as its alliance relationship with Washington is intensifying. But the United States is also reining in its defence expenditure (with more changes to come if sequestration kicks in). One can therefore think, pivot notwithstanding, that future American administrations will expect even more burden sharing from close allies. Yet meeting this expectation will be harder for Australia in an extended period of defence economising.

A second paradox is that just as its defence resources are being slimmed down, Canberra is paying increased attention to its western and northern periphery and to the Indian Ocean, with the latter meaning an effective expansion of its area of strategic concern. A growing gap between ends and means is becoming a distinct reality. That disconnect won’t be so obvious in an era of reducing operational tempo as the troops come home from Afghanistan, the Solomons and Timor Leste. But it will find a way to show up one day when a real test comes. Read more