Defence doesn't know cost of maintaining new F-35 fighter jets
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Defence doesn't know cost of maintaining new F-35 fighter jets

The Defence Department doesn't know how much it will cost to maintain its new multibillion dollar fleet of warplanes as officials wait for United States-based support to become ready.

Days before the first two of Australia's F-35 Joint Strike Fighters are due to land in Williamtown, NSW, the national auditor has found the price tag for keeping them in the air won't be known before 2020.

Defence also failed in three years to provide annual updates to the government on the purchase, despite directions, and had committed $266.3 million in spending without first telling the prime minister and finance minister as required.

Australia is purchasing the new fleet from the US to replace its ageing F-18 Hornets, and the federal government is directing more than $20 billion towards buying the planes and maintaining them until 2025. The federal government doesn't yet know the final cost of the purchase as the complex project, involving multiple partner nations, takes shape.

This year the Defence Department estimated Australia will pay an average of $115.7 million for each of its aircraft.

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The federal audit office, in a report tabled in parliament on Wednesday, said the government decided to purchase the planes using rough estimates of the cost to maintain them, ignoring Defence Department guidelines for approving major spending, and against the findings of previous reviews and audits.

Australia's newest warplane, the F-35 Joint Strike Fighter.

Australia's newest warplane, the F-35 Joint Strike Fighter. Credit:Joe Armao

Defence is waiting for a maintenance program centred in the United States, and relying on US government contracts with weapons manufacturer Lockheed Martin and aerospace firm Pratt and Whitney, to progress before it can better calculate the costs.

In December 2020, after which the department may be able to advise the government of the planes' maintenance costs, Australia expects to have 30 Joint Strike Fighters and one operational squadron of at least 12. It plans to purchase 72 in total.

A review board convened by Defence in October 2018 raised problems with the maintenance program intended to support the F-35s, saying it was "immature" and faced a number of challenges.

It raised fears about the level of funding for operating and supporting the Joint Strike Fighters.

"The funds required for sustainment, even for the next few years, have yet to be quantified or allocated," it said.

Sourcing funds for the fleet by 2023 and beyond could be a major challenge, particularly if those costs were not contained through savings expected from having a global network of maintenance.

Australia will rely on the global maintenance network for parts and upkeep for the new warplanes, and will be a regional hub for maintaining and warehousing F-35s - a role with costs unknown when the purchase was approved in 2014, and that have added to financial pressures.

As it relied on a US-centred, multi-nation maintenance program, the Defence Department was constrained in managing risks, including access to spare parts, the audit report said.

Defence was managing the risks coming with this arrangement, as well as the cost pressures of establishing Australia as a regional maintenance and warehousing hub for the Joint Strike Fighters.

In response to the audit report, Defence secretary Greg Moriarty and Defence Force chief Angus Campbell said the department would return after 2020 to the government knowing the fleet's costs through to its planned withdrawal date.

They admitted the department had not updated cabinet in 2015 and 2016 but said it had made improvements that would prevent a repeat of the failures.

F-35s will perform air combat, bombing and surveillance for Australia's military, and of more than 3000 aircraft to be built for nine participating partner nations, the US will keep about 75 per cent. Defence has described the build as one of the most technologically advanced and complex ever undertaken in defence aviation.

The Defence Department is building infrastructure for Australia's share of the aircraft and has prioritised construction at their main operating base at Williamtown before the first two new planes arrive. Budget pressures have forced it to delay work at other bases, and work at Williamtown and another air force base at Tindal in the Northern Territory is $44 million over the approved budget.

Doug Dingwall is a reporter for The Canberra Times covering the public service and politics.

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