Problem 2: A recent study conducted in the United States by McKinsey Consultants has found that Australia pays more than other nations for its equipment to maintain a strong defense industry. The findings indicated that Australia ranked last out of33 countries on a measure of defense equipment outputversus expenditure. "in general, countries that make it a point to support their domestic defense industries have higher procurement costs than those that rely on imports", the report says. The Australian govemment is very supportive of acquiring a new fleet of 'i 2 submarines to replace the troubleplagued Collins class vessels. ASPI put a price tag of $9 billion on buying offtheshelf European submarines, and $36 billion on an Australian design and build. The choices are between an offtheshelf submarine, a reworked Collins or one designed from the ground up. But an Australian designandbuild could provide significant potential industrial and military capability opportunities because of its size and duration, among other things. The govemment is also committed to ensuring that certain strategic industry