Saturday, March 26, 2011

Australia Won’t Review F-35 Plans Despite Cost Increases

The Defence Department will not review plans to spend more than $20 billion on 72 F-35 stealth fighters despite American program cost blow-outs that are threatening to bring down Canada's minority conservative Government.

It is now believed the final cost of the multinational F-35 program will be $1 trillion, more than twice the cost of rebuilding Japan after the recent disaster and almost equal to Australia's gross domestic product for 2010.

''Detailed analysis shows the JSF is the preferred and most cost-effective long-term solution for Australia's air combat superiority,'' a Defence spokesman said.

Canada, which has agreed to buy 65 planes at an official program cost of $14.7 billion, is at the centre of a political firestorm over claims the acquisition and maintenance bills will be twice what the Government had claimed.

There were real fears the Canadian budget, due to be put to the Parliament late last night, could be blocked as a result.

That would lead to a vote of no-confidence motion that, if passed, could send Prime Minister Stephen Harper and his team back to the polls as early as May 2.

Mr Harper has been accused of acting in contempt of the house by refusing to disclose, among other things, the real cost of the F-35 acquisition. The storm erupted on May 10 when the Canadian Parliamentary Budget Officer claimed the cost over the next 30 years would be $29.3 billion twice the official estimate of $14.7 billion.

Australian defence experts have said if that was so, the same would be true for Australia's F-35 program.

The operations and capability program director at the Australian Strategic Policy Institute, Andrew Davies, said there was a strong case to review our commitment.

Canada's Department of National Defence took the unusual step on Monday of publishing a spirited response to the critical Parliament Budget Office report.

Mr Davies, who carried out a peer review on that report, defended the document, saying its methodology and conclusions were sound.

The Australian Defence Department does not agree. ''Many 'independent' reports on JSF costs are based on extrapolation of historical data from legacy fighter programs, and as a consequence, do not reflect actual detailed cost analysis undertaken by the US Government and the JSF Program Office,'' the spokesman said.

Defence's continuing reliance on the American cost, time and capability projections appears difficult to justify given recent high-level claims they could be subject to change with little or no notice.

A United States Government Accountability Office report issued last week was scathing.

''The Department of Defence continues to restructure the JSF program, taking positive, substantial actions that should lead to more achievable and predictable outcomes,'' it said.

''Restructuring has consequences higher up-front development costs, fewer aircraft bought in the near term, training delays and extended times for testing and delivering capabilities to war fighters.

''Total development funding is now estimated at $56.4 billion to complete in 2018, a 26 per cent cost increase ...''

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