Defence Department’s ‘cheeky’ accounting hides real cost of $50 billion Future Submarine program

October 08, 2018

The Australian Strategic Policy Institute (ASPI) says Defence is being “a bit cheeky” by saying the Future Submarines will cost $50 billion when it’s $79 billion once you account for inflation.

The revelation further vindicates Conservative Party leader Cory Bernardi to join with fellow South Australian crossbench Senators in calling for another look at a modified off-the-shelf option, an option rejected at the beginning of the process.

ASPI estimates that once you include inflation over the decades of the project, the real cost is about $29 billion higher than $50 billion in 2016 dollars.

The Federal Government has come to a similar conclusion.

Defence considers the $50 billion figure to be consistent with the $79 billion figure because in official documents the $50 billion figure has a ‘greater than’ symbol in front of it.

ASPI defence analyst Marcus Hellyer said, “Once you take inflation into account that number starts to look more like $79 billion. They are the same thing expressed differently … which is, I think, a little cheeky.”

While there is no question we need submarines and there is no question that they should be built in SA; the questions being asked here are about the government’s fiscal responsibility to taxpayers.

The confirmation of the numbers came after claims of “blowouts” in the cost of the Future Submarine project caused Senator Bernardi to call for the existing deal with France’s Naval Group to be scrapped in favour of a cheaper option.

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