The Good Oil by Rod Brown – Sad misjudgement by Defence

Australia’s defence purchases have been notoriously problematic, but our submarine saga is the most glaring. It will have huge ramifications for years to come.

The inability to manage the submarine issue highlights the real lack of professionalism within Defence, including its inability to stand firm against incoming PMs’ differing wants re subs viz. Abbott (Japan), Turnbull (French) and now Morrison with Unites States submarines. Clearly politics has swamped the ‘frank and fearless advice’ that should have been coming out of Defence.

The fact of the matter is that French nuclear-powered subs were available to us in 2016, but we decided we needed French diesel subs (in other words, redesigned French subs) with the attendant disadvantages e.g. noise, submersion time, range, sitting ducks while refuelling. Then came the concerns about the lack of local content, budget blow-outs and delivery delays.  

The never considered option
What is lost in all this drama is that the off-the-shelf option was never seriously considered. Why? Well, successive governments have always wanted the jobs, the industry spin-offs and the prestige that come with manufacturing them in Australia. But do the maths – the subsidy per job runs into the millions.

Now don’t get me wrong. I’m all for manufacturing jobs in Adelaide, but:

  • the off-the-shelf option would have been vastly cheaper and faster
  • we still would’ve had the servicing function
  • we wouldn’t be saddled with having to reskill a neglected workforce
  • we wouldn’t have been beholden to the Yanks, and
  • some of the savings could have been spent on research and development or marketing support for industries where we have true competitive advantage.

The last point is important. Submarines aren’t part of our competitive advantage. Due to the lack of an industry policy we’ve walked away from our engineering-based industries. Adelaide and other manufacturing centres should be focussing on agricultural machinery, mining equipment, environmental equipment, avionics etc. This is exactly what Canada has done.
French anger
A sad part in all this is the lack of courtesy to the French – sure things needed to be kept confidential, but if we’d kept the French in the loop about our need to switch to the US subs, they would have at least privately understood our position.

Gladys’ legacy might be a federal ICAC?
The demise of New South Wales Premier, Gladys Berejiklian this month wasn’t unexpected once the Independent Commission Against Corruption began exploring the $5.5 million grant to a gun club in Wagga. Sure Gladys reportedly got sucked into this by her boyfriend, but that’s no excuse.

The Morrison Government has steadfastly refused to move on a federal ICAC – if he continues he will dig his own grave. I am advised that a federal ICAC would be legally able to delve into past problem areas (sports rorts, car park rorts) if ‘there is a contemporary relevance’ – and surely there is. And a new federal party FIN (Federal ICAC Now), currently being registered, could draw many disillusioned voters.

Chinchilla – 1 million solar panels and rising!
An old mate from high school days in Warragul now lives in Chinchilla, west of Toowoomba. I expressed surprise when he told me, but he explained that it’s a nice town, living is cheap, he has a circle of friends, there’s the mod cons of city life and only 3.5 hours to Brisbane to visit his daughters.

I’ve been ruminating on this and gee he’s got a point. Housing prices are at ridiculous levels in the major cities and coastal hotspots, and traffic snarls will re-emerge once COVID-19 recedes.

In Chinchilla’s case, it has very good infrastructure – a hospital, good schools, a couple of nice pubs, a snazzy aquatic centre, an irrigated golf course, sports infrastructure (tennis, footy, cricket etc.), a racecourse with 6-7 meetings annually, good internet services.

My mate explained that there are lots of fly-in fly-out workers camping in hundreds of detachables. Five years ago there were in excess of 200 properties to rent, and near-new 4 bedroom, 2 bathroom houses could be purchased for $200k or less. Now almost no rentals are available and house prices have lifted. He says this might may short-lived, because the construction of solar farms has been the driver.

Councillor Andrew Smith, the Deputy Mayor, informed me that the Western Downs Local Government Area has 3-4 solar projects on the go (and 23 in the pipeline), with the Western Downs Power Hub the biggest in Australia! The lead company is NEOEN, a big French renewables outfit. The bulk of the construction is being handled by an Indian company, with 500-600 jobs in the construction phase. One million solar panels over 1545 acres, thank you very much. Annual output of 1,080 GWh, enough to power 235,000 homes.

Cr Smith explained their solar industry agenda has been underway for about five years, and it has been a spin-off from the infrastructure during the Coal Seam Gas era.  

Chinchilla’s population has been relatively constant at around 6000 (excluding the construction workers). It is interesting to note that Queensland has some other cracking towns in the 5000-7000 population range viz.  Stanthorpe, Gordonvale, Beaudesert, Goondiwindi, Roma, Gatton, Beerwah and the now famous Biloela.

These sorts of towns seem to tick along. The Queensland Government deserves some recognition because it has historically taken regional development more seriously than some other states.  Coincidentally, Chinchilla is the hometown of federal Agriculture minister David Littleproud, which might help in the clinches?  
Toowoomba on the move
Meanwhile, global aviation giant Boeing has chosen Toowoomba’s Wellcamp Aerospace and Defence Precinct as the preferred site for an un-crewed aircraft production facility, the first to be located outside North America.

The aircraft is the first military combat aircraft designed, developed and manufactured in Australia in half a century. It is expected to deliver $1 billion worth of benefits to Queensland over a decade.
The facility build will support around 300 construction jobs, and 70 permanent advanced manufacturing jobs.

The key locational factors cited were its access to a flight line, clear flying days, commercial flight access from major cities, and ability to support the Airpower Teaming System program. You can add in the Wagner family, the gung ho owners of the airport. 

Rod Brown is a Canberra-based consultant and lobbyist specialising in industry/regional development, investment attraction and clusters, and accessing federal grants. He also runs the Cockatoo Network.
Phone: (02) 6231 7261 or 0412 922 559