Reforms to Disposal of Military Equipment

Minister for Defence Materiel Jason Clare today announced reforms to the disposal of military equipment.

The Australian Defence Force is about to undertake the biggest disposal of military equipment since World War II.

Over the next 15 years the Australian Defence Force will replace or upgrade up to 85 per cent of its equipment.

As part of that, over the next ten years Defence will dispose of:

·         up to 24 ships;

·         up to 70 combat aircraft;

·         up to 110 other aircraft;

·         up to 120 helicopters;

·         up to 600 armoured vehicles;

·         up to 12,000 other vehicles; and

·         a range of communications systems, weapons and explosive ordnance.

This represents 10 per cent of the current value of the entire Australian Government’s non-financial assets.

The disposal of military equipment provides an opportunity for Defence to generate revenue to be re-invested in new military equipment for Force 2030.

The British Government has generated ₤650 million (about $1 billion AUD) from their military equipment disposals since 1997.

Over the same period and with a similar number and type of assets, the disposal of Australian military equipment has cost around $20 million.

“That’s why I am reforming Australia’s system of military disposals – to reduce costs, generate potential revenue and provide opportunities for Defence industry involvement,” Mr Clare said.

Mr Clare said the first opportunity for the Australian Defence industry was the release of a Request for Proposal for the disposal of up to 24 Navy ships across the coming decade.

That includes HMAS Manoora, Adelaide Class frigates and Mine Hunters.

The Request for Proposal will be done in two parts:

• HMAS Manoora – submissions will close on 15 September 2011; and
• All other ships – submissions will close on 14 October 2011.

The latter will provide the flexibility for companies to bid for all ships, a class of ships or a single ship.

Ideas could include, but are not limited to, dismantling the ships and recycling the parts and sale within Australia or overseas.

A plan to dispose of up to12,000 Army vehicles has also been approved. This includes Land Rovers, Unimog trucks and Mack trucks.

This will likely see the sale of vehicles to companies who will repair and upgrade the vehicle and then on-sell them.

The Request for Proposal for the vehicle disposals will be released in July.

“By disposing of this equipment in bulk, it will increase the amount of revenue Defence can raise and reinvest in new equipment,” Mr Clare said. 

“It also provides the scale which gives real opportunities for business.

“The money raised from the sale of these vehicles will be invested in Force 2030, with one option being into simulators used for training that will reduce the wear and tear on Army vehicles.”

Historically significant pieces of military equipment will still be made available to the Australian War Memorial, RSLs and other historical organisations for preservation.

For example, Mr Clare has directed that a number of these Army vehicles be offered exclusively to community or heritage organisations.

“One of the main goals of the disposals system is the preservation of our military history,” Mr Clare said.

“Flexibility will be maintained in the system to make sure that happens.”

Media contact: Korena Flanagan – 02 6277 7620