Referral of inquiry
On 2 December 2015, the Senate referred the following matter to the
Foreign Affairs, Defence and Trade References Committee for inquiry and report
by 1 May 2016:
Planned acquisition of the F-35 Lightning II (Joint Strike
Fighter), with particular reference to:
future air defence needs that the aircraft is intended to fulfil;
cost and benefits of the program to Australia, including industrial costs and
benefits received and forecast;
in the acquisition timeline;
performance of the aircraft in testing;
alternatives to the Joint Strike Fighter; and
other related matters.
Conduct of the inquiry
On 17 March 2016 the Senate agreed to extend the reporting date for the
inquiry to 28 June 2016. On 9 May 2016 the inquiry lapsed with the dissolution
of the Senate and the House of representatives for a general election on 2 July
13 September 2016 the Senate agreed to re-adopt the inquiry with a reporting
date of 13 October 2016.
The committee advertised the inquiry on its website and wrote to
individuals and organisations likely to have an interest in the inquiry and
invited them to make written submissions.
The committee received 57 submissions and 16 supplementary submissions to
the inquiry. These submissions are listed at Appendix 1 and are published on
the committee's website.
The committee held one public hearing on 22 March 2016 in Canberra. The
witnesses who appeared at the hearing are listed at Appendix 2 and the program
and Hansard transcript of the hearing are published on the committee's
History of the Joint Strike Fighter in Australia
In 1999, Project AIR 6000 was established to acquire a new air combat
capability to replace the Royal Australian Air Force (RAAF) F/A-18A/B fighter
aircraft when they reached their life-of-type
around 2012-15, and the F-111 strike/reconnaissance aircraft when they reached
their life-of-type in 2020.
The 2000 Defence White Paper confirmed the government's commitment to consider
new air combat capability options stating that '[u]p to 100 new air combat
aircraft' would be acquired, with the acquisition phase expected to start in
2006-07 and the 'first aircraft entering service in 2012'.
In 2002, the US invited close allies, including Australia, to invest in
the System Development and Demonstration Phase of its F-35 Program, 'where
capability is developed, tested and evaluated resulting in capability expansion
over time'. In June 2002, the Australian government 'decided in conjunction
with the decision to join the F-35 System Development and Demonstration
program, that the F-35A was the preferred aircraft to provide Australia's new
air combat capability'. Defence advised that it also 'undertook to monitor
other prospective candidates should the F-35 Program not develop as expected'.
Defence noted that:
In making this decision Australia recognised the benefits of
standardisation, rationalisation and interoperability associated with a
cooperative program to satisfy similar operational requirements more
affordably, as well as to provide industrial participation opportunities in
global supply chains.
In 2006, the Australian government considered the first stage (First
Pass) for the AIR 6000 Phase 2A/B and agreed to Defence committing to the F-35
Production Sustainment and Follow-On Development Memorandum of Understanding,
which provides the framework for ongoing partner engagement and obligations
through the life of the F-35 capability following the completion of the System
Development and Demonstration phase.
In November 2009, the Australian government approved AIR 6000 Phase 2A/B
Stage One (Second Pass) of the Australian Program to acquire:
14 F-35A aircraft and the associated support elements necessary
to establish the initial training capability in the US at a cost of A$3.2
(at least) a further 58 F-35A aircraft in 2012; and
an additional 28 aircraft to be considered in the context of the
Force Structure Review that informed the new Defence White Paper.
In March 2010, the US Department of Defense (USDoD) advised that the
F-35 Program had breached certain US Government requirements.
This, coupled with the impact of the Global Financial Crisis, led to a
re-baselining of the F-35 Program, including the deferral of production
commitments. Subsequently, the F-35 Program aimed to complete the System
Development and Demonstration phase with an initial warfighting capability by
the end of 2017. As a consequence, the procurement of the Australian F-35
Program was deferred by two years resulting in initial operational capability
moving from 2018 to 2020.
Past parliamentary inquiries
The Joint Standing Committee on Foreign Affairs, Defence and Trade
(JSCFADT) has been monitoring the progress of the Joint Strike Fighter program
(JSF program) through its reviews of Defence Annual Reports. The JSCFADT has
repeatedly expressed disappointment in the level of transparency and reporting
regarding the JSF program.
In its most recent review of the Defence annual report, the JSCFADT noted that:
The information on the Joint Strike Fighter program in the
Defence Annual Report and ANAO Major Projects Report is superficial compared to
what is reported publically and to the Congress in the United States. In
particular, the US Government Accountability Office and DOT&E report to the
US Armed Services Committees are far superior to what is reported to the
Australian Parliament. Information regarding the Joint Strike Fighter program,
such as the allocation of specific weapons to software blocks, is available on
various US websites. Defence must be more transparent in their reporting and
not hide behind claims of national security classification when the information
in readily provided by other countries, in particular the US. As Australia is
one of the eight international partner countries in the Joint Strike Fighter
program, the Committee emphatically believes that the reporting on the program
available to the Australian Parliament be on par with that available to the US
In 2013, the Australian National Audit Office (ANAO) conducted companion
performance audits regarding the management of Australia's air combat capability,
considering the acquisition of the F-35A Joint Strike Fighter and the upgrades
and sustainment of the F/A-18 Hornet and Super Hornet. The audits acknowledged
that there are inherent risks associated with advanced defence technology
development and production programs:
This audit report draws attention to the wide-ranging cost,
schedule and performance risks inherent in advanced defence technology
development and productions programs such as the JSF Program. These risks arise
from the need to:
specify products, in function and performance terms, that continue to
satisfy requirements at delivery and are capable of being upgraded in line with
changing military requirements;
pay for work on products years ahead of opportunities to verify their
compliance with specifications; and
ensure continuous collaboration across wide-ranging contractual, organisational,
geographic and national boundaries, that is capable of completing highly
technical work extending over many years, and of coping with unforeseen
technical advances or changes in user requirements.
The ANAO reports did not make any formal recommendations regarding
administrative improvements to Defence's management of the ADF's air combat
capability, noting that the approach by Australian governments and Defence to-date
has been appropriate:
...in the context of the JSF Program where there are many dependencies
not under Australia's control, the approach adopted to-date by Australian
Governments and the Defence Organisation has provided appropriate insight into
the program, in support of informed decision-making, commensurate with the cost
and complexity of the planned acquisition.
However, the ANAO cautioned that it 'remains challenging' to ensure that
the coordination of the 'highly complex and costly procurement' of the F-35A
with the 'effective sustainment of the ageing F/A-18A/B fleet' would not result
in a 'capability gap'.
Structure of report
The report is structured as follows:
Chapter 2 considers Australia's air defence capability needs, its
current air defence capability and the air defence capability promised by the
F-35A Lightning II Joint Strike Fighter (F-35A);
Chapter 3 discusses the concerns raised in evidence regarding the
performance of the F-35 in testing, including the aircraft's manoeuvrability
and flight capabilities; stealth capabilities; mission systems; mission data
loads and Autonomic Logistics Information System; its escape system; and the
performance and accuracy of the Verification Simulator (VSim);
Chapter 4 considers the F-35A acquisition schedule and the risk
of the creation of a capability gap should there be further delays to the
acquisition timeline as well as potential alternatives to the F-35A;
Chapter 5 considers the effect of Australia's participation in
the F-35 program on local industry and the Australian economy, including the costs
and benefits; and
Chapter 6 includes the committee's view and recommendations.
The committee thanks all those who contributed to the inquiry by making
submissions, providing additional information or appearing at the hearing.
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