Hawke govt liked its Aussie-made subs

Long before the first Collins submarine touched the water, the cost of building it and five others had increased by more than $400 million.

Yet, the Hawke government and its defence minister Kim Beazley showed no concern at all.

Cabinet papers for 1988-1989, released by the National Archives of Australia, show the initial cost of the project had risen from $3.892 billion in 1986 to $4.319 billion, thanks to inflation and exchange rate variations.

The contract was signed in June 1987, with the Adelaide-based Australian Submarine Corporation promising sub number one would be delivered to the navy in 1995.

Mr Beazley argued there was no real price increase and the project was actually proceeding as planned.

And so it was, right up until a large number of problems emerged and which only now, more than two decades on, appear to be finally fixed.

Submarine one, HMAS Collins, was launched on time but delivered to the navy 18 months late. Submarine six HMAS Rankin was more than three years late.

Their numerous problems included unreliable engines and excess noise but the biggest was the computerised combat system.

Adjusting for inflation, Collins cost $5 billion in 2006, actually in line with the projected contract cost.

Considering Australia had never built a submarine and not that many warships, Collins was actually a remarkable achievement.

Yet its problems continue to cast a dark shadow, with the Abbott government now looking at moving away from plans to build their replacements in Australia.

The Hawke government cabinet papers show no such reservations. As well as the Collins subs, it was preparing to entrust two other major defence projects to local industry.

One was the $3.5 billion deal for eight new Anzac frigates, approved in 1986 and announced in August 1989.

Under that deal, AMECON - subsequently Tenix and now BAE Systems - would build eight frigates for Australia and two for New Zealand at the Williamstown yard in Melbourne.

The first Anzac reaches retirement age around 2024 with the government now considering their replacements.

Then there was the over-the-horizon radar, a surveillance system able to observe ships and aircraft far out into the Indian Ocean and Indonesian archipelago.

Development started in the 1970s and was sufficiently promising to win endorsement in the 1987 Defence white paper.

Labor approved ongoing development funding and gave the final go-ahead in 1991.

There were numerous development problems and delays.

The system was switched on in 2003 and final operational capability reached in 2014 at a total cost of more than $1 billion.