Australian Politics – Productivity Commission Appalled: Prime Minister Turnbull Just Blew $15 Billion

Posted on Tue 07/26/2016 by

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Bolt New 01By Andrew Bolt ~

Jacob Greber on the Turnbull Government’s outrageous waste of defence dollars which were meant to go on defending Australia, not saving Liberal seats:

Photo: A Shortfin Barracuda Block 1A pre-concept design released as part of the DCNS pitch. (Supplied: DCNS)

Photo: A Shortfin Barracuda Block 1A pre-concept design released as part of the DCNS pitch. (Supplied: DCNS)

More than four decades of success in lowering tariffs and curbing taxpayer-funded industry featherbedding looks set to be cast aside because of the Turnbull government’s decision to build $50 billion worth of submarines in South Australia, the Productivity Commission has warned.

In a scathing analysis by the government’s independent economic think tank, the commission estimates the 30 per cent cost premium to build the submarines locally may be the single most generous industry assistance scheme on record.

“This is a major step back from the historical reduction in using government procurement preference as industry policy,” the commission said in its annual Trade & Assistance Review…

“The recent decision to build the new submarines locally at a reported 30 per cent cost premium, and a preference for using local steel, provides an illustrative example of how a local cost premium can deliver a very high rate of effective assistance for the defence contractor and the firms providing the major steel inputs,” the report said.

Analysts at the commission estimate that the effective rate of assistance delivered to the submarine program because it is using local staff and more costly local steel could be as high as 300 per cent…

“It is notable that this cost premium does not include any delays in deploying the new submarine capability,” it added.

That suggests we are building 12 submarines here for the price of 18 submarines bought from overseas – and delivered faster. The Turnbull Government has betrayed the national interest.

Reader Peter of Bellevue Hill:

With the cost of electricity in South Australia at least double that of the rest of the country, how much does that add to the final cost of constructing the subs in Adelaide?

Andrew Bolt writes for the Herald Sun, Daily Telegraph, and The Advertiser and runs Australia’s most-read political blog. On week nights he hosts The Bolt Report on Sky News at 7pm and his Macquarie Radio show at 8pm with Steve Price.

Read more excellent articles from Andrew Bolt’s Blog . http://blogs.news.com.au/heraldsun/andrewbolt/