What does $20 billion worth of subs look like anyway?



What is the biggest number you can visualise, the biggest that can have meaning for you outside of a calculation in arithmetic?

Australia shaped like a cartoon subThirty-six players on an AFL football field at any one time; that's easy. Their endeavours bring roars from an attendance of perhaps 50,000, twice that number at the end of the season. So you can visualise 100,000, either because you were once part of such a crowd or you were impressed by the television shots of a full MCG.

Now, try to imagine a gathering ten times bigger than that. It is not easy, but perhaps your imagination could stretch to ten full MCGs side by side. More likely, the concept is vague, the image fuzzy. But at least it gives an idea of what we mean by one million.

After that, however, you are doing arithmetic, not forming an image of what ten million or 20 million might actually look like.

Your mind has gone into what computer programmers call overflow.

As for understanding one thousand million — that's 1000 times ten MCGs — forget it. We call that quantity a billion and it is just a number, not an entity that has any real meaning for us, apart from being bigger than a million but smaller than a trillion.

So when we read that the cost of replacing our six submarines with 12 new ones will be $20 billion, it means little to us: it's just a number.

It might as well be $36 billion, which is the figure used by the Australian Strategic Policy Institute for the same work or the $80 billion predicted by the Australian Government in 2014. The Australian Submarine Corporation (ASC) headquartered in South Australia objects to this last figure, estimating that the cost would be between 18 and 24 billion dollars.


"We get cranky when the tax on petrol rises by two cents, but we are quite blasé about billions spent on submarines."


So there you have them, piles of numbers that we can't understand, except that we wonder how one government estimate of the cost to the taxpayer is $80 billion, while a business enterprise owned by the same government prices the work at $18-24 billion.

It is hard to imagine a better example of what happens when overflow affects the human mind, unless you cite the former defence minister who wouldn't trust the aforementioned ASC to build a canoe.

The numbers are just arithmetic symbols with little relevance to us; as far as meaning is concerned, we are just babbling. We get cranky when the tax on petrol rises by two cents, but we are quite blasé about billions spent on submarines.

This might well be the opportunity to ask why Australia needs submarines. Are they more needed than the Gonski school reforms, for example, or the Disability Insurance Scheme or a high-speed rail connection between our major cities?

That last was estimated in 2012 to cost in excess of $100 billion, but the way we are with these billions, we can easily accept a jump from $80 billion for useless submarines to $100 billion for a piece of infrastructure that the country badly needs.

Anyway, that figure of $80 billion for the submarines is just to put the things in the water. They need specially trained crews, the latest weaponry, and the almost inevitable retrofitting of new equipment which will be developed faster than the things are being built.

And talking about crews, I read somewhere that it is difficult to find volunteers as submariners because they spend so much of their time doing nothing. Indeed, there seems to be a difficulty in finding crews for our current six subs; where the crews for twice that number will come from must constitute a headache for the navy.

Those six subs are based in West Australia, where two of them patrol the safe and sparse traffic in that part of the world, while two others are saving diesel but ready to go if needed and the last two are in dry dock for maintenance.

When we have 12 subs, those numbers will presumably double. If the country ever has to deal with a problem in the north of the continent, four subs could probably be there in a few weeks, though what they would then do is another matter.

Anyway, this is not about subs at all, it is about our inability to understand the numbers we are dealing with. The country took a deep breath when we were told that the NBN would cost $38 billion; the Opposition at the time threw their collective hands in the air at such extravagance and asked how our grandchildren would ever pay for it.

But there is not so much as a muted squeal from any side of politics when $80 billion is estimated just to build a dozen submarines, guaranteed to be out of date before the first one gets wet.


Frank O'SheaFrank O'Shea is a retired Canberra school teacher.

Topic tags: Frank O'Shea, submarines



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Existing comments

If Australian manufacturing is looking to be saved by a product which, for security reasons at least, cannot be made in any economy but a high-wage one because none of the low-wage nations, being potentially politically unstable or unreliable, can be trusted to know what makes the product tick, a submarine or something similarly complex would appear to be the saviour. If Japan makes more cars than the Japanese can ever buy, why can't a politically stable and technically capable Australia make more submarines than it will ever need? The scandal is not that we're buying submarines at around $2 billion (or more) a pop but that we're not selling submarines at around $2 billion (or more) a pop. Or any complex equipment where buyers have deep pockets and the need for assurance that the manufacturer works under a rule of law in which supply is reliable and commercial secrets are safe. There must be some reason why we have more universities than Singapore.

Roy Chen Yee | 21 April 2016  

The reality is that if Australia wasn’t paying $1 billion per month in interest on the debt run up by the profligate Rudd/Gillard governments, it could afford lots of things this country needs.

Ross Howard | 21 April 2016  

I couldn't agree more with this article. Sarah Day's "A Hunger to Be Less Serious" is apt I think: "The water-surface puckers with the quick current,/underneath, the grey deepens steeply;/ its effect is sobering, satisfying./ When she comes into view, the tub meets all expectations;/an old canoe-stern, trailing her fledgling nose-up in the wake,/sailing sublimely past the crowd and the procession of deserted vehicles,/away, away into the horizon,/carrying on board a gleaming catch/of strayed dreams and wish-fulfilments."

Pam | 22 April 2016  

here here! I reckon we should call the first sub in the water Boaty McBoatface as the Brits won't use it for their new fandangle artic research ship. why waste a good name?

Lawrence Wray | 22 April 2016  

It's for Defence Frank so you won't get much squeal from either side of politics. Funny, if the Howard Government had given more consideration to future "nation building" when we had huge surpluses instead of throwing money away on unnecessary middle class welfare, there would be a lot more to spend on these things. I guess profligacy is bi-partisan.

Brett | 22 April 2016  

Ross, you have conveniently ignored the two main thrusts of Frank's article: one, that we don't understand large numbers like this and two, that we probably don't need the subs anyway. Regardless of what debt was left by a previous government, both those points are valid.

ErikH | 22 April 2016  

The government says the 12 huge submarines will cost $50 billion, not $20 billion. Worse, if all goes well the maintenance and operating costs will add another hundred billion dollars over the lifetime of the subs. Good subs can be imported for about $5 billion, brian t

Brian Toohey | 22 April 2016  

The author raises important points about people’s capacity to understand very large numbers and the moral and practical issues behind the submarine project. As he says, we can be persuaded that one unimaginable amount is too much for an NBN but another unimaginable amount is just right for a submarine fleet. However – let’s not get side-tracked into the fake debate about Australia’s technical capabilities. The former minister’s comment that he wouldn’t trust ASC to build a canoe showed only that he was unfit to be a minister. This piece by Paul Barratt and Chris Barrie (http://johnmenadue.com/blog/?p=6041) is very illuminating about our real capacity.

David B | 22 April 2016  

Frank, you are, I think, roughly of an age with me, so you must have read the works of C Northcote Parkinson in your younger days. Parkinson enshrined the concept that work expands to occupy the time available for its completion - something all students and office workers fully understand. He also explained to the world that a committee, (and Cabinet is only a glorified committee) will focus on things it can comprehend, while giving a quick nod or tick to those it can't. I think he used the example of a management committee considering the expenditure of $200on a bike shelter for the employees, requiring a two hour discussion and further research, and the expenditure of $10 million on the construction of a major power production facility, which was given the green light after 5 minutes and no pertinent questions. That is, I am sure, how the decision to spend these billions on submarines, and also on our new whiz-bang aeroplanes was made. And if we ever do get into a conflict where they might be useful, we'll be so concerned about losing such valuable assets we'll probably hide them away. Think of Tirpitz and Bismarck in the WW2.

Vin Victory | 22 April 2016  

What's with 12 subs, I thought we had gone metric ages ago. With such large numbers it is best they are kept under water or is that radar so that we do not have to understand. The first sub base was at Geelong without a wharf for them. As for staff just borrow some of those road sign holders and relocate them for a while, they can assist in directing the crew so that the sub does not point up or down excessively. FRANKly I am not sure your arguments hold water, I would love to count a billion or two in my bank account - just to have a better appreciation of numbers you understand. Till tonight; your shout mate!

Eugene Hobbs | 22 April 2016  

Yes, a lot of money spent on "DEFENCE" but if we were threatened by a navy of substance, their capacity do do so, is limited by an even greater deterrent, subs.

Lee McCurtayne | 22 April 2016  

ErikH, I take your point, however I don’t agree with either of the two thrusts of this article. Firstly, I believe most people in this forum understand large financial numbers. Secondly, I refute the author’s “useless submarines” jibe only to endorse spending on Gonski, Disability Insurance, and high-speed rail. All these projects cost big money and are only possible if taxpayer’s money is wisely spent. For example, with education standards falling for years notwithstanding increased funding, it is not apparent that simply throwing another $37.3 billion into Gonski is the answer. Certainly submarines could be purchased more cheaply from overseas. However building them here over three decades will create long-term employment and be beneficial to the navy’s capability and to our economy. Of course with Turnbull enacting no spending cuts of substance while blowing $10 billion on new spending in seven months, one gets the feeling he will be no better than Rudd as a money-manager.

Ross Howard | 22 April 2016  

Operationally what we need are nuclear subs that we could potentially lease from the Americans. Either way it is probably a terrible waste of money. what however you can be sure of Frank, is the active service boats are not languishing off WA but are a lot further north that that! Presumably keeping an eye on whereabouts of Chinese subs.

Eugene | 22 April 2016  


JOHN MAGEE | 22 April 2016  

The other way of looking at is: 80 billion dollars worth of subs is approx. equivalent to 16 days worth of our GDP, which isn't much. However I wonder if it is worth it. If a sub has a thirty year life, approx. 20 of those years the sub will be out of commission.

Peter Burger | 22 April 2016  

12 new submarines to replace 6 older ones. I am curious to find out what will happen to the 6 old ones? Will they be sold off to one of our "friendly neighbours" who just might not be so friendly in thefuture

nick agocs | 23 April 2016  

Great to see those comparisons. Far better to have a healthy educated population with strong healthy ties to our neighbors than to rely on the use of a heavily armed appendage to the US military. These issues to be discussed at the Independent and Peaceful Australia Network Conference in Alice Springs on October 1st. The 50 year anniversary of signing the Pine Gap agreement.

Annette Brownlie | 25 April 2016  

I'm disappointed with this article; 20 billion is not hard to visualise if one converts it to a per capita figure, about $1000 per head. Nor am I fussed about adding subs to our defence capacity given our reliance on vulnerable shipping lanes for such basic commodities as motor fuels. Surprisingly, perhaps, I agree with Roy Chen Yee that we should be using this build to develop our own capacity instead of continuing to de-industrialise our economy. The French subs will be a diesel version of an existing nuclear sub; why can't we have the nuclear version? The important take-away message that I get from the article is a lack of information and informed discussion; is $1000 per head really the full cost and how much of that figure will actually be spent in Australia? If the Australian component is little more than 12 steel hulls then there will be little acquisition of new technology and little flow on.

Ginger Meggs | 29 April 2016  

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