Richard Marles caught out again on defence spending

If you didn’t know any better, you’d think Defence Minister Richard Marles was fully on top of his portfolio, that he had a good explanation for why we shouldn’t be lifting our defence spending even faster than we already are, and that he was dealing with some of the key problems around the way our defence dollars are spent.

Speaking at The Australian’s “Defending Australia” summit — populated by the usual suspects (some of whom presided over defence procurement for much of the past two decades) — Marles acknowledged that delivery of major defence projects had been “a historic challenge for Defence. When we came to government, there were 28 different projects running a combined 97 years over time. Now that did represent a failure of leadership on the part of the former Coalition…”

So, projects running over time is a marker for failure of leadership, according to Marles. Let’s take him at his word.

In the auditor-general’s last Major Projects report — the Australian National Audit Office’s annual assessment of the biggest defence projects — from December 2024, the total “slippage”, or delay, in the projects assessed was 442 months, or nearly 37 years.

What did Marles inherit from the Coalition? The Major Projects report published a few months before the 2022 election shows total slippage was… 405 months. The average slippage back then was 23 months. Last year, it was 25 months. In-year schedule slippage back then was 73 months. Last year, it was 96 months.

Marles has defined “failure of leadership” as about project delay. On that basis, he’s worse than the Coalition — by a lot.

We know all this even despite Defence under Marles trying harder to keep us from knowing about project delay. Defence told the ANAO not to release performance information for 20 of the 21 projects assessed — up from 12 the year before and just four in the last year of the Coalition.

Marles went on yesterday that “in ensuring that it [Defence] is fit for purpose, I say today that everything is on the table, including bureaucratic reform of the Department of Defence, of the Australian Defence Force, and of defence agencies”.

That was the takeaway that journalists dutifully reported: Marles getting tough on his bureaucrats. Problem is, he’s only saying this because even the usual suspects in the debate over defence funding, the hawks who’d like defence spending at 3%, 3.5%, even 5% of GDP, now admit that Defence would be utterly hopeless at spending it.

Let’s look not at what Marles said but at what he did. A year ago, the auditor-general released the astonishing audit of Defence’s dealings with Thales over many years regarding a munitions factory. The ANAO made this remarkable statement about how the Defence Department withheld information and effectively misled the then ministers Linda Reynolds and Melissa Price.

On 9 January 2020 Defence provided advice to the Ministers for Defence and Defence Industry on the SDMM contract negotiations. The advice did not inform them of key issues arising in the tender and contract negotiations, such as: Defence’s assessment that there had been an ‘unprecedented’ number of tender non-compliances by Thales (see paragraph 3.83); the basis of Defence’s decision to proceed to negotiations (see paragraphs 3.84 to 3.89); or Defence’s assessment of the ‘very high risk’ nature of the negotiation schedule agreed with Thales (see paragraph 3.89). More complete draft advice had been prepared by Defence in November 2019 for ministers, to advise on these matters, but that version was not provided to them. [emphasis added]

As the democratically elected ministers in charge of the Defence portfolio, Reynolds and Price deserved to be fully briefed by their bureaucrats and not misled through the deliberate omission of key information. Reynolds last year said she felt ill when she read the ANAO report.

What was Marles’ response to this shocking indictment of Defence? Did he demand that the officials involved in misleading ministers be sacked? Did he ask whether he had ever been misled? Did he ask Defence to explain any other occasions when they had misled ministers?

He did nothing, beyond claiming: “Thales are a very important company in terms of the contribution that they provide to the Australian Defence Force.” Indeed Marles has done nothing in response to any of the scathing ANAO reports that have emerged on his watch. “Everything is on the table”? Hardly likely.

But the comment that got some people particularly excited was this statement: “Australia’s geography today is more relevant to great power contest than it has been at any point since the end of the Second World War, arguably at any point in our history.”

This was correctly taken by hawks to mean that Australia’s deep integration into the US military, including America’s use of Australian territory for training, bombers, vessels and supply storage, would be crucial to any “contest” between the US and China. That integration, begun by Julia Gillard and expanded by the Coalition during its time in power, has rapidly expanded under Marles, including into the insertion of US operatives into Australia’s foreign policy and intelligence apparatus.

Today Paul Keating took aim at Marles in an extended statement lashing the government’s abandonment of Australian sovereignty at what he dubbed — accurately — a “sleazy” conference. It was, Keating said,

a dark moment in Australia’s history. A moment when an Australian Labor government intellectually ceded Australia to the United States as a platform for the US and by implication, Australia, for military engagement against the Chinese state in response to a threat China is alleged to be making. And ceding the continent to the United States devoid of an electoral authority — a month after an election where the government had the opportunity — but declined to make explicit, its strategic intentions and policies. Declined to let the public, the Australian community, be party to its strategic thinking and intent.

Keating is entirely correct that the government refused to address any strategic issues during the election campaign just finished, actively avoiding opportunities to do so. Defence remains the great black hole of both competence and democratic accountability in Australia.