Australian Lefty on Politics, Governance, Science and Info Management

60 billion for only 5000 jobs – and nervous neighbors

Posted by Dave Bath on 2009-07-02

So…. $60 billion over 4 years in a new defence capability plan… and the KRudd ministers (and the press) are spruiking it mainly because it will create 5000 jobs.

Given that the rule-of-thumb is that employing (and supporting with chairs, computers, tools of trade, etc) a typical team of 10 people costs $1 million, how does 5000 jobs for 60 billion over 4 years stack up?

5K jobs times 100K per annum each times 4 years…. thats 2 billion dollars over 4 years.

And those calculations are for direct employment, not even the fuzzy "job-multiplier" figures politicians love to use because they are difficult to prove wrong.

So, if the publically-admitted excusebenefit for the spend, the 5000 jobs, is correct, there are far more efficient ways of creating jobs and confidence in the economy.

For $15 billion dollars a year, you could directly employ a workforce of about 150000 people (and that’s not including the people employed indirectly).

So out of that 60 billion, there must be an awful lot of very expensive parts!  (Because it’s capital investment, not the cost of putting the petrol in the tanks).

On the other hand, the 60 billion over four years program could also be looked at from the point of view of increasing the workforce over four years from 29000 to 34000.

Even here, you’d want to have an awful lot of material used by each worker, but that can be the case if you are buying expensive parts.

Still, you wonder why the spruiking for the spend is talking about job creation.  There are much better ways of doing that, and ways that don’t scare the neighbors into upping their own military spending.

And it is the major spruiking point.  The only figures mentioned in the Faulkner’s press release are the 60 billion dollars, and the number of jobs.

Up until now, Faulkner has been one of the few federal ALP ministers that have impressed me by being more into improving accountability and management practice.  Even though the DMO has been woefully mismanaged for at least a decade, and could certainly use Faulkner’s skills, it’s sad to see him becoming more of a propagandist.

Unless we are expecting a fair-sized war in the next few years (perhaps our pollies expect Hawkish Republicans to get power in the US soon), it would be better to spend the money on much-needed infrastructure that might help our trade balance, and give us the money to spend on toys a little further down the track.

And in the next 2 or 3 years, our neighbors who are not joined-at-the-hip with the US will be upping their military spending, and we’ll have to spend even more money that we won’t have.

Still, if the general public looks on this massive spend favorable, swayed by the prospect of controlling inevitable unemployment rises (my guess is that it will be around or over 10% for the next year or two at least), then the politicians must be laughing, pleased at how few people are doing the maths at VCE level that all year 10 students covered only a few decades ago.

See Also

  • Defence Capability Plan (DCP) announcement
  • DCP 2009
  • Defence Priority Industry Capability Factsheet (2009-07)
  • There are hints the $60 billion Military Industrial Complex largesse will be boosted, the DCP announcement has the following:

    A number of substantial programs identified in the 2009 Defence White Paper, Defending Australia in the Asia Pacific Century: Force 2030 (the White Paper) are not included in this DCP as they will be presented for Government consideration beyond the Forward Estimates period. They are expected to be included in subsequent DCPs.

  • Guns more important than mums" (2009-07-02) "marnic" at New Matilda
  • ABC News (2009-07-01) on the $60 bill spend, and jobs.  At least it includes some information on how bad management was under Howard, and hints that Faulkner might be more efficient.
  • Yeah, hope I’m wrong in this post (finger trouble with the calculator), but I don’t have time to go further into the figures and the details of those paper at the moment.

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