Half a bil per aerial truck for the Royal Australian Air Force – what’s the scam?

by Rex Patrick | Jul 29, 2023 | What's the scam?

It’s not often the Australian Government acquires the same type of aircraft, from the same company, to perform a similar role across a span of 66 years. The Albanese Government’s purchase of new transport aircraft provides an interesting insight into the eye-watering costs of defence procurement. What’s the scam?

In 1957, the Menzies Government acquired 12 new C130A Hercules transport aircraft from the Lockheed Corporation for the Royal Australian Airforce. The total cost of the project was £14.681 million. That’s approximately $520.9m in 2022 value (using the Reserve Bank Inflation Calculator), or $43.4m for each aircraft.

At the time Ministers worried about what was seen as the huge cost and Cabinet hesitated before making the purchase.

So what’s the scam?

The Albanese Government has decided to acquire 20 new C130J transport aircraft from Lockheed Martin at a cost of $9.8 billion.

That amounts to $490m for each plane. That’s a tenfold unit cost increase above inflation. And this isn’t an advanced strike aircraft or a new missile. The basic design of the C130 was laid out in 1951. The first prototype flew in 1954 – nearly 70 years ago. The primary role for the C130 is transport. (By comparison, a Boeing 737 commercial aircraft costs around $150m.)

As Defence Minister Marles observes in his media release: “The Australian Defence Force relies on the C-130J Hercules aircraft for the deployment of personnel, equipment and humanitarian supplies. The iconic aircraft is regularly used in search and rescue missions, disaster relief and medical evacuation.”

Put simply, the C130J, like the C130A before it, is an aerial truck.

No doubt the C130Js are more capable aircraft than their predecessors. But can they carry 10 times as much cargo in a given time, or fly ten times as far? Is each one ten times more capable? I doubt it.

The spiralling unit cost of modern defence platforms is a well-known phenomenon as defence and aerospace manufacturers gouge national treasuries via compliant defence bureaucracies.

But this latest defence purchase looks like a particularly egregious example.

Lockheed Martin will no doubt be very happy with this latest deal. Defence Minister Marles is unfazed, indeed happy, to trumpet another huge hit on the public purse. But once again taxpayers are being taken to the cleaners.

Rex Patrick is a former Senator for South Australia and earlier a submariner in the armed forces. Best known as an anti-corruption and transparency crusader - www.transparencywarrior.com.au.

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