A former Defence official has questioned the affordability of plans to build up Australia’s military using local resources.
A former senior Defence Department executive has cast doubt on the affordability of the federal government’s ramp up in military spending, saying warships and armoured vehicles should be built overseas rather than propping up local jobs.
A 10 per cent price premium on building the equivalent of a Collins class submarine with 40 per cent of Australian content would incur a cost of $494,000 per job. But increasing the price premium to 30 per cent would create each extra job at a cost of $23.6 million. “A reset should be guided by the economic principles that productivity and industry protection rarely mix and that assembling weapons platforms designed abroad is neither the only, nor the most effective, path to boosting domestic employment, increasing industrial complexity and fostering innovation,” said Mr Bourke.
But Mr Bourke said the review and nuclear-powered submarine taskforce offered a chance to straighten out defence procurement.
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