“The expected blowout cost multiple for Australia in any defense purchases from American military suppliers is likely to be significant, potentially up to 3 times higher than initial estimates:
1. The search results indicate that current major defense projects in Australia have seen a total cost blowout of nearly $17.5 billion, which is nearly 3 times higher than the $6.5 billion figure initially flagged by governments.[4]
2. Specific examples of major cost overruns include the F-35A program, which saw a $2.366 billion increase mainly due to exchange rate compensation,[1] and the now-abandoned MRH90 helicopter program, which had a nearly $3 billion cost increase.[4]
3. The search results suggest that factors like scope changes, exchange rate fluctuations, and poor project management and oversight have contributed to these significant cost blowouts in Australian defense acquisitions.[1][2][4]
4. Given the challenges the US is facing in delivering its own Virginia-class submarines on time and budget,[1][2] it is reasonable to expect similar or even greater cost overruns if Australia were to purchase nuclear submarines from the US as part of the AUKUS deal.[1][2]
Therefore, based on the evidence presented in the search results, the expected blowout cost multiple for any Australian defense purchases from American military suppliers is likely to be in the range of 2-3 times the initial estimates, if not higher, due to the historical track record of cost overruns in major Australian defense projects.[1][2][4]
