Monday, February 16, 2009

Australia: Budget Cuts Shelve Plans For Collins-Class Submarines

Australia: Budget Cuts Shelve Plans For Collins-Class Submarines (NSI News Source Info) February 16, 2009: PLANS to build a fourth $2 billion Air Warfare Destroyer in Adelaide may be abandoned as the economic downturn hits federal revenue. The recommendation to shelve plans to extend the $5.5 billion destroyer project at Osborne-based ASC Shipbuilding is understood to be contained in a draft of a top-secret Defence White Paper. It includes plans to mothball one or two of the Collins-Class submarines. The Collins class submarines are the current class of submarines serving in the Royal Australian Navy (RAN). The class is made up of six vessels: Collins, Farncomb, Waller, Dechaineux, Sheean, and Rankin; all six are based at HMAS Stirling in Western Australia. They were built by the Australian Submarine Corporation at Osborne, South Australia. Entering service from 1996, the class replaced the Oberon class submarines previously operated by the RAN. This comes amid a severe breakdown of goodwill between the Government and Defence chiefs over the impact of cutbacks to perks the officers enjoy, including limousines and valet services. Navy chiefs lobbied for a fourth destroyer, but the global economic meltdown has seen that idea killed.It also means Adelaide's highly skilled defence-technology and ship-building industries face an uncertain time because the fourth ship was expected to form a bridge of work to the next big contract, the replacement vessels for the Adelaide-built Collins-Class submarines. It is understood that the existing Air Warfare Destroyer contract to build three destroyers at Osborne will not be affected. Mothballing the submarines may involve placing the boats in dry-dock and redeploying the crews to other duties. This would come at serious cost to the nation's maritime defences. Shelving or delaying the fourth destroyer flies in the face of widespread strategic advice and recent comments by Prime Minister Kevin Rudd that Australia faces a growing threat in the region. "There has been an arms race under way, or an arms build-up, let me put it in those terms, across the Asia-Pacific region for the better part of the last decade," Mr Rudd told the RSL's national conference last September. "What I'm saying is that when I look at the Australian navy, we need to make sure that we have enough capability there to deal with future challenges." Proposed cuts to senior officers' perks have sparked what Defence insiders have dubbed "the battle of the butler". The Advertiser has been told many senior officers are angry about losing taxpayer-funded butlers, valets, batmen, housekeepers, cooks, drivers, first-class travel entitlements (reduced to business class), spouse travel and access to the RAAF's luxury VIP aircraft. Some senior officers have threatened to resign if the Government proceeds with the cuts. The White Paper is still with the Defence Department, but will be taken to Cabinet's National Security Committee next month for approval before a late-April release. The document includes a new and more realistic funding model for spending based on a "defence oriented index". The White Paper includes major savings proposals such as extending the life of three guided-missile frigates and keeping the air force's F/A-18 Hornet fighters flying longer. Defence Minister Joel Fitzgibbon told The Advertiser yesterday he would not pre-empt the White Paper nor would he confirm or deny any initiatives. "I am determined that we deliver value for taxpayers' money and that our people on the frontline have all the capability, protection and training they need," he said. "The Defence leadership has been co-operating and is working with me to achieve these objectives." Top brass will keep generous household and travel allowances and other benefits such as free rent and health care as well as annual salary packages ranging from $344,000 to $428,000. The cuts are part of a massive efficiency drive under the White Paper and the millions of dollars saved will be redirected to the "sharp" end of defence. Mr Fitzgibbon instructed the White Paper team, led by ambitious Defence toe-cutter Mike Pezzullo, to ensure the efficiency gains would be felt by everyone in Defence, including top brass. "He wanted prominent and visible signs that the senior people were making changes," a source told The Advertiser. There are about 150 "star"-ranked officers in the Australian Defence Force who will be affected by the cuts. In some cases the loss of car and driver will reach down to colonel level, but those most affected are the chiefs of the navy, army and air force who occupy taxpayer-funded historic houses. Vice-Admiral Russ Crane, Lieutenant General Ken Gillespie and Air Marshal Mark Binskin will all lose their cook, housekeeper and butler/valet as well as their limousine and driver. Defence Chief Air Chief Marshal Angus Houston keeps most of his entitlements for security and entertainment purposes, but even he will be travelling in business class from now on without his wife. In future, spouse travel will be allowed only with ministerial approval. ACM Houston had his first taste of the new order recently when he was denied access to the air force's VIP jet. He travelled to Hawaii for a high-level meeting in star class on budget airline Jetstar. Other senior officers have had low-priority, but expensive, travel plans cancelled at the last minute.

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