Ideas@TheCentre – The Centre for Independent Studies

Ideas@TheCentre

Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Australia's leaky submarine program

27 September 2013

simon-cowan This week some interesting leaks have suggested that Australia's six Collins Class submarines are facing serious (read expensive) risks that might make extending their operating life difficult (read really expensive) or even impossible.

Originally the first Collins Class submarine was scheduled to be retired in 2024, with the remainder to be decommissioned by 2031. They were to be replaced by 12 Future Submarines, which have a largely bespoke or developmental design, and will be assembled in Adelaide.

The Future Submarine was the centrepiece of the 2009 Defence White Paper. The implementation of this ambitious plan to reorganise the nation's defences has languished due to systemic underfunding and heel dragging on the part of government decision makers. Nowhere was the delay more evident than the Future Submarine project.

It takes 15 or more years to bring the first boat of a developmental class to operational status. If work on the Future Submarine had begun promptly in 2009, it would have been theoretically possible to meet the original timeframe. But it didn't.

By the end of 2012 many fundamental decisions and preparatory steps still had not been taken. The likelihood that the Future Submarine would be in service before the Collins Class became obsolete was very low.

It was at this time that the Gillard government released findings that the Collins Class service life could be extended for another full operating cycle (seven years), regaining the four years they had wasted through inaction since the 2009 Defence White Paper. It was a fortuitous finding, but what would the cost of the extension program be?

The Collins Class has very low reliability and high costs compared to its rivals (as detailed in my 2012 report). With the news that 68 major systems aboard the submarines pose a high to extreme risk of preventing the fleet from reaching its life expectancy or being extended, it seems that the bill for keeping the Collins Class subs operational will get even larger.

The Defence Department has commented that 'identify[ing] potential issues and risks … is a common and normal process to be followed if consideration is being given to the life-extension of any system.'

If this was a common and normal process, why was the existence of these risks (and the expected cost of dealing with them) not released to the public before the election? Operational security should not be invoked as a shield to hide poorly performing defence programs from public scrutiny.

Taxpayers are entitled to know whether the Collins Class currently represents value for money. They are entitled to ask whether the service life extension of the Collins is a good investment, before we commit tens of billions of dollars to replicate the Collins Class process for the Future Submarine.

They are also entitled to ask whether there are other options, but that is a story for another day.

Simon Cowan is a Research Fellow at The Centre for Independent Studies.

Voluntary student unionism

27 September 2013

andrew-baker Voluntary Student Unionism (VSU) was briefly back on the agenda this week, before the Prime Minister Tony Abbott poured cold water over the idea, stating that it was not a priority for his government.

The VSU debate is about whether students should be forced to pay an up-front fee for services they don't use and in particular, to financially support the political activities of student unions and campus politicians.

In 2005, the Howard government abolished these fees and the compulsion to join student unions, but the fees were re-introduced in 2010 in the form of a student services and amenities fee which subsidises on-campus activities and services.

Education Minister Christopher Pyne described these fees as 'compulsory student unionism by the backdoor.'

The fees effectively entail a redistribution of wealth from students who do not use childcare and other welfare services provided by their university to those that do. In effect it adds another revenue stream to help universities bolster their bottom line.

While students who use these services no doubt love the subsidies, the students who do not use them tend to be forgotten…right up until they are asked to chip in again to pay for another year of services they don't use.

The CIS published a report in 2005 examining the Howard government's Bill and making the case for further deregulation of higher education. The report argued that permitting universities to bundle together academic and non-academic fees would strengthen the market and allow universities to compete on the price and quality of the education they provide.

Greater competition would encourage universities to provide low cost and high quality education tailored to the diverse needs of students. As former CIS research fellow Andrew Norton said, 'we can meet the preferences of single mothers not wanting to subsidise the canoeing club, without denying those who want packaged services the opportunity to purchase them.'

In some sense, the rise of Massive Open Online Courses (MOOCs) are providing much needed competition – the courses are free and there is no up-front amenities fee.

But MOOCs are still in their infancy and this new entrant into the higher education marketplace doesn't help students currently paying to attend traditional brick and mortar universities. This means that the fight for VSU and against compulsory up-front fees at traditional universities is still justified to reduce costs and give students more freedom about their education.

Andrew Baker is a Research Fellow at The Centre for Independent Studies.

China's Icarus sheds light on the limits of the law

27 September 2013

benjamin-herscovitch Last week's conviction of former Chinese political superstar Bo Xilai was riveting legal drama. The preceding trial featured stories of murder most foul, an unprecedented social media frenzy, and familial betrayal.

With a father who was one of Mao Zedong's comrades and an influential Chinese Communist Party (CCP) elder, Bo was one of the 'princelings' of the political elite.

Despite Bo's pedigree, he has been stripped of his personal freedom and political career. After being found guilty of taking US$3.2 million in bribes, a court in the eastern city of Jinan sentenced him to life in prison on Sunday.

The CCP-controlled press hailed the case as an exemplar of the rule of law in China and a victory for President Xi Jinping's fight against corruption.

The Bo verdict is actually neither.

The root cause of Bo's downfall was not corruption, but his challenge to the political order.

Like Icarus, Bo flew too high and earned the ire of those he could ill afford to displease.

During his time as communist party secretary of Chongqing, he mobilised mass support by channelling government funds into public infrastructure and social housing to the tune of billions of dollars. He also galvanised his popularity with high-profile anti-crime programs and campaigns to revive Mao-era 'red culture.'

Not only did these initiatives garner Bo too much personal support for Beijing's liking, but their egalitarian focus and Cultural Revolution-inspired overtones were at odds with the CCP's cautious market reforms. Equally, Bo's brash and capricious leadership style sat uneasily alongside the CCP's consensus-based decision making.

It was this clash with established powers and the CCP orthodoxy that ultimately led to Bo's fall from grace.

In other words, political power plays and ideological jostling were the lead characters in the Bo saga, with corruption relegated to a supporting role.

These deeper causes of Bo's demise are disconcerting: The Bo conviction is further confirmation that the CCP rules by means of the law rather than being constrained by the rule of law.

With the Maoist dictum, 'party policy is the soul of the law,' still holding sway, the legal system effectively operates as an extension of the communist party rather than a check on the power of government.

Notwithstanding Bo's probable guilt, the lesson from his conviction is not that justice has been done. It is that an independent legal system remains aspiration rather than reality in China.

Benjamin Herscovitch is a Beijing-based Policy Analyst at The Centre for Independent Studies.