The military Pound

We do not need to look far to see that cut backs are more than just the talk of the town. They have been the talk of nations for a long time, and we have seen more than one system discussed when it comes to the need for overspending.

So, when many read about the fact that the military overspend again we might not have looked to be too overly surprised. It is however the proverbial straw that is breaking the camel’s back. This is what was said on Sky News on Feb 28th “Britain’s Ministry of Defence has been slammed after a report showed between 2009 and 2011 it bought STG 1.5 billion ($A2.24 billion) worth of equipment more than it used.

The article was short, to the point and ended with “The ministry is to introduce controls that it hopes will reduce spending on inventory by STG 500 million a year by 2015.

So, the British consumer will be confronted with taxation on overspending by almost 2 billion until that time? How is that fair. This is not the end of it. There is a lot more. This is the clear part where we are confronted with overspendings; however, there are a few more issues at play.

The New York Times published a story in July 2006 named “Pentagon Struggles With Cost Overruns and Delays“. In this example they went over the costs of the F-22a Raptor. It was a track from 1991 until 2010 that showed a massive amount of overspending. The response as stated in the New York Times was “We must transform the way the department works and what it works on, he said. It could be said that it’s a matter of life and death — ultimately, every American’s.

So was that an answer? It seems not. Because that same story repeats itself when we look at headlines involving the F-35. “$24 billion British budget blow-out in black hole F-35 project“.

It seems that the boys in uniform seem oblivious to words like ‘common sense’, ‘budgets’, ‘overspending’ and you know, words of that general direction. Now I am all for a good defence, yet the parties involved seem to be either completely academically ineffective (incompetent seems too hard a word), or those paying are really lacking a certain level of backbone. Especially when budgets are overstretched the way they are. Am I having a go at the Australian and UK admin soldiers? I am not sure. Who made these decisions? Who allowed for these levels of overspending? These are serious questions that need answers and it needs more then investigation, it requires ACTUAL actions being taken. I am not talking about some political inquest wasting even more time and money. No! Defence needs to take a look at their laundry and fix this. It seems clear and shown that this needs fixing on several levels.

In the meantime solutions must be found, especially when it is clear that almost all parties in the commonwealth have to tighten the belt on budgets all over the place. It seems very unfair that even though the military are to most the visible part to defend a nation, the people placing their lives in harm’s way on a daily basis are having their budgets cut severely.

You know, I have a nice idea, right out of the extreme right field. Lockheed Martin donates 1% of paid costs by the DOD to the Metropolitan police as a show of good faith. Not all will be happy with this idea, but several will be less unhappy and the way the costs are cut especially to the police departments. It seems only fair. Who knows, Sir Bernard Hogan-Howe might arrive in the office on a Monday morning holding on to a cheque and wearing a large smile (be not afraid if that happens). The same could be done for the RAAF. I reckon Commissioner Scipione might be happy to know that in the end, overspending almost 30% per F-35 unit (an unacceptable amount of overspending per unit) the police force will get a small shiny future. The other option is for the RAF to order 14 less F-35’s and the RAAF orders 2-3 less and these police departments get those funds directly.

There is however a deeper part to those rumours. Is the F-35 too overpriced and are we moving to a previous model (the F-22)? Even though several sources implied certain noises, there is no real knowledge at present (or better stated, known to me) that this is actually happening. It would be interesting as the NY Times reported that the F-22 had its last delivery in 2010. If so, should we pay full price for a model taken out of production? Would you pay sticker price for a 2010 Toyota? This seems more than a little unfair. Not to mention that we seem to reward/ignore a blatant budget overrun for two planes by the same company. A ‘ploy’ they seem to have handled since 1991. That means they did not seem to have cleaned up their act for two decades.

So we have two issues.

1. Commonwealth armies seem to be overspending by a lot and on needless things.
2. Commonwealth armies are confronted and left with much higher bills by their suppliers.

I am not claiming that the military are doing this on an intentional basis to waste money, but it stands to reason that we should ask questions when the size of the British forces is set around 225,000 and there seems to be an annual overdraft of 800 million dollars. The Australian Defence forces are not without fault either. This was mentioned in an article by the SMH, however I personally thought that this article asked more questions on the numbers they reported, then on the actual issue.

There is another side to this, and this was voiced by President Obama on Feb 19th as mentioned in the Guardian. “Obama warns Congress over spending cuts: ‘People will lose their jobs‘”. This is not an unfair statement. Yet the issue that is not mentioned is that overall, the profit margin for those companies is often a lot larger than most commercial companies seem to be left with, and THAT part seems to have never been curbed. That was illustrated in an article in Aviation week by Joe Anselmo on May 18, 2012. There it was quoted that “A Wall Street research firm says defense contractors should be able to maintain their profit margins even as Pentagon spending declines“. That seems to prove the thoughts that others have as well as myself. So, these are not unique thoughts. These are thoughts that have been in play for a long time, so when we are looking at recessions and budget issues, it seems to me that there is at least one player in town who gets to play with a stacked deck.

I hope the message is getting through. There is a massive amount of needless overspending and there currently seems to be no planned solution to properly curb this enthusiastic method of an open wallet policy.

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