Defence cost ‘blow-outs’ explained

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By Marcus Hellyer*

Every year the Australian defence commentariat replays a ritualised dance that goes like this. First, the Australian National Audit Office releases its major projects report providing detailed information on the progress of around 25 of the Department of Defence’s largest acquisition projects. It includes a table titled ‘Budget variations post second pass approval’ (that is, government approval to commence acquisition of a particular capability). Last year, the table summed to $24.2 billion.

The media then performs its role and publishes stories about defence budget ‘blowouts’, reinforcing the public’s deeply held view that Defence couldn’t manage a kindergarten bake sale without the cost blowing out by several billion dollars.

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