The Morrison Government encountered Opposition scorn for failing to include claw-back provisions in its JobKeeper program. Yet the Albanese Government is making the same mistake with its ‘JobGiver’ submarines program. Rex Patrick reports.
On 23 November 2021, then-opposition Treasurer Jim Chalmers rose in the House of Representatives and delivered a fiery speech on the performance of the Liberal Coalition Government.
When he spoke about managing the economy, Chalmers mentioned ‘JobKeeper and declared it the “defining example” of Coalition economic mismanagement.
“JobKeeper was a great idea,” he said. “Frydenberg, the butterfingers of Australian politics, got his hands on it and he turned a good program into a program that wasted tens of billions of dollars, and that’s why the Financial Review wrote an article headlined ‘Frydenberg fires JobKeeper missile at himself’. If you look at that piece in the Financial Review, I think the key conclusion is that they describe the current Treasurer as ‘lighter than helium’.”
He went on to describe the economy as a piece of software: “Wasting money is not a bug in this government; it is a feature of this government.”
Three months later, opposition leader Anthony Albanese weighed in, describing to the House a Treasurer who had “not put in place appropriate protections for taxpayers’ interests when it comes to the JobKeeper program, resulting in
over $20 billion going to companies that were increasing their profits.
And that leads us to ‘JobGiver’.
The money sinkhole
On 13 March 2023, Prime Minister Albanese announced in San Diego that the AUKUS submarine program would cost a mind-blowing $368 billion. That’s $13,850 per man, woman, and child in Australia. And that’s not including the cost of managing the spent nuclear fuel for 100,000 years.
At the time he offset the cost issue with a ‘jobs at home’ pitch. “The program will create around 20,000 direct jobs over the next 30 years across industry, the Defence Force and the Australian Public Service including trades workers, operators, technicians, engineers, scientists, submariners and project managers.
In early September 2023, it was revealed that, as part of the program, Australians were to gift almost $4.7B in taxpayer’s money to grow the US submarine industrial base to enable the transfer of US Virginia attack-class submarines to the Royal Australian Navy.
Along with a similar contribution to the UK, ‘JobGiver’ was born.
JobGiver
Shortly after the announcement, I FOI’ed the Submarine Agency for “The agreement between Australia and the United States that goes to Australia making significant financial contributions into the Submarine Special Activities Account”.
I was concerned about the T’s and C’s. How would the money be spent? When would the money be paid to the US? Was there a clawback provision?
The request was answered with a big fat “access denied”.
Access denied (Source: FOI)
The FOI matter is on appeal, but Senator David Shoebridge has been inquiring into the details at Senate Estimates. In an exchange with Vice Admiral Jonathon Mead, the head of the Australian Submarine Agency, he unhelpfully refused to confirm that the $4.7B would be returned to Australia if the US decided not to provide the Virginia submarines in 2035.
Most likely, in other words, there is no clawback, just like ‘JobKeeper’.
AUKUS risks unveiled – is Australia sleepwalking into a submarines disaster?
A real risk of default
The clawback matters, because
the risk the US will not deliver a submarine to Australia is high.
Whilst the US Congress passed into law, via the 2024 National Defense Authorization Act, permission to transfer the first two of three to five Virginia class submarines to Australia, the approval contains a caveat.
Before any US submarine can be transferred to the Royal Australian Navy, the US President must certify to the Congress that he or she is of the view that the transfer is not inconsistent with US foreign policy and national security interests.
They’re ‘Humpty Dumpty’ words that will mean just what the President chooses them to mean – nothing more, nothing less. A future US President can kill the deal for subjective reasons at any time.
But there’s a more objective threat. The US industrial base is not building enough submarines for its own needs, let alone ours. The magic build rate requirement for the US is 2.3 submarines per annum (to meet its attack and ballistic submarine needs, as well as Australia’s). Right now, the build rate is only 1.4, and with issues also plaguing their maintenance shipyards, there’s not a lot of optimism that it’s going to get anywhere near the 2.3 needed (apart from the blind optimism inside the Australian Submarine Agency and the Defence Minister Marles’ office).
But wait, there’s more
Of course, there are also risks in the UK ‘JobGiver’ payment we will make, again without a claw back. They’re unlikely to walk away from us on account of the perilous state of their submarine industry,
but they reliably deliver submarines that are late and over budget.
The UK needs our money to assist them deal with their own moribund state. But their moribund state is exactly the reason they should not be our partner.
The scam within a scam. US, UK officials are flying high on the AUKUS teat.
When fending off his ‘JobKeeper’ fiducial failure, Frydenberg was at least able to say that the wasted taxpayers largely went back into the Australian economy. Chalmers won’t be able to say that of the ‘JobGiver’ money that’s going to the US.
I say Chalmers, because Albanese’s unlikely to be around when the US say “sorry” to us. But there’s some chance that Chalmers will be Prime Minister in 2034/5. Whoever is shadow Treasurer at that time won’t be calling Chalmers ‘Helium Man’, like he labelled Frydenberg – rather it will be ‘Hydrogen Man’, on account of the fact that hydrogen is even lighter than helium.
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, Rex is running for the Senate on the Lambie Network ticket next year - www.transparencywarrior.com.au.