The Navy and the Australian naval shipbuilding industry look like being big winners in the Defence White Paper. The government has already announced a continuous build of major and minor surface ships which, among other things, almost guarantees an increase in the number of hulls – and not just this time around, but in perpetuity.
Andrew Davies and Mark Thomson | Canberra
And the submarine decision is still to be announced, but similar politics seems set to make sure that there’s plenty of activity around the replacement of the Collins. Like Air Force before it, the Navy is entering a phase of recapitalising its entire force structure.
There are good strategic reasons to be investing in additional seapower right now. As the 2009 Defence White Paper identified, there’s a growing strategic competition in the western Pacific between the US – long Australia’s maritime security underwriter – and growing Chinese military power.
Australia no longer has the luxury of being able to assume American military pre-eminence, and has to be able to make a solid alliance contribution. Of course, the 2009 promises of larger and more capable frigates and a doubling of the submarine fleet proved to more aspiration than reality, with no substantive progress being made towards either.
The ‘lost years’ between White Papers probably won’t hurt the surface fleet too much, as the (relatively) imminent delivery of the AWDs and the success of the Anzac ASMD program mean that a replacement surface combatant isn’t a pressing need. But the situation with submarines is far less comforting.
While the availability of the Collins class boats has improved in the past couple of years, they now look to have to be able to continue to provide the backbone of Australia’s submarine capability through to the late 2020s in an underwater environment featuring increasingly capable regional submarines - a big ask for a 1980s design.
"Regardless of which way the future submarine project goes, there’s a need for some serious thinking about how we’ll keep a continuous and competitive submarine capability."
There was a brief flurry of public statements about the feasibility of a life extension program for Collins, but that hasn’t turned into any visible activity. Regardless of which way the future submarine project goes, there’s a need for some serious thinking about how we’ll keep a continuous and competitive submarine capability.
The strategic outlook in 2015 is even more challenging than it was back then, and there’s an even stronger case for an investment in maritime capability. China’s military build-up now allows it to compete with the US in North Asia waters and the South China Sea, as well as increasing ability to project power well beyond its immediate environs. We’ve seen Chinese surface and nuclear submarines operating into the Indian Ocean. That isn’t a problem in its own right, but Chinese assertiveness suggests that the interests of China and the other nations of the region don’t align.
At the very least a hedging strategy seems prudent, and the US is increasingly open in expecting more from its allies such as Australia and Japan. Australia no longer has the luxury of assuming American naval supremacy, and has to start thinking about how we might usefully build up our own capabilities and interoperability to allow us to make a substantive contribution to alliance seapower.
For example, as USN attack submarine numbers run down to below 50, the 22 boats Japan is working towards plus another 12 from Australia begins to look like a pretty healthy contribution to theatre wide submarine operations. That’s likely to be an area of increased collaboration across the American Pacific alliance framework (and why an Australia–Japan submarine collaboration is likely Washington’s preferred option).
In terms of surface vessels, the Aegis combat systems of the AWDs will allow them to interoperate with American surface forces, including being plugged into USN targeting systems for cooperative engagements. While it remains to be seen exactly which future frigate design Australia will opt for, and it’s likely that Navy will specify similar levels of interoperability, which might make it lead to some systems integration challenges for some of the options – it’s not clear, for example, how compatible the sensor and weapons fit of the RN’s Type 26 will be with USN architectures.
And it’s also not clear exactly what level of technological maturity will be required for systems to be including in the future frigate program. The challenges of defending surface combatants from the proliferation of anti-shipping systems no w appearing means that some novel solutions are in development. Two examples are electromagnetic rail guns and directed energy weapons. Both are showing some promise in trials, but neither is mature enough to lock into a ship design that can be built in the sort of time frames the recent Australian announcement envisaged.
And those systems wouldn’t be easy retrofits – they both demand large amounts of power, and thus drive the size and the generation capacity of the vessel upwards, well beyond the capacity of an Anzac sized vessel, and probably even beyond the 6,200 tonnes of the AWDs. It might be that ‘the’ future frigate actually becomes two distinct vessels - one that can be designed and built relatively quickly, giving way to a more sophisticated design in time.
The future of the minor vessel fleet is even less clear. There’s an identified need to replace the patrol boats, minesweepers and hydrographic vessels, but no clear guidance as to what form each might take. The 2009 White Paper described a fleet of 20 2,000 tonne ‘modular’ vessels to meet all of the requirements. Like the other maritime projects of that document, they were stillborn, but the idea may yet make a comeback as plans for the continuous production of minor vessels firm up.
The RAND report into shipbuilding raised the possibility of building some OPVs as a way of keeping the shipyards busy, but it’s not clear what the Navy would use them for. The best we can say about the minor vessels is that the government has certainly left itself with a wide range of options to choose from.
"The best we can say about the minor vessels is that the government has certainly left itself with a wide range of options to choose from."
Funding the fleetThe August announcement on shipbuilding was very light on details, and even the cursory analysis above shows that there are some big questions still unanswered. We’ve been promised more detail in the White Paper, now expected some time this month. But all of the plans for a larger and more capable Navy hinge on the future availability of money – and lots of money. When announcing the government’s plan for naval shipbuilding, the prime minister said that over $89 billion will be spent on ships and submarines over the next 20 years.
Even coupled with the commitment to boost defence spending to two per cent of GDP, sufficient funds can’t be taken as a foregone conclusion. Already we’ve seen the prospective size of the future submarine fleet shrink from 12 to eight vessels (perhaps with an option for more later) to maintain the affordability of the investment plan. In the years ahead, further funding pressures can’t be discounted; rising costs, changing priorities or falling budgets, or some combination of those, could render today’s plans unaffordable.
In terms of costs, the government has promised that 2015 White Paper will be fully costed. Consistent with this goal, more than $15 million has been spent by Defence on independent cost estimates. It’s fair to expect that this year’s White Paper will contain more detailed cost estimates than any of its predecessors. But will it be good enough to avoid the past cycle of plans proving to be unaffordable only two or three years downstream? Only time will tell.
No amount of independent cost assessment can remove the inherent and substantial uncertainties surrounding the cost of acquiring and operating cutting-edge naval technology in the years ahead.
It is fanciful to think that anyone can properly understand the cost of the future submarines and frigates in the absence of knowing the designs that will be chosen and the commercial arrangements under which they will be acquired. That’s especially true given the developmental nature of some of the defensive technologies discussed above – history shows that early costs estimates are likely to reflect optimism bias.
The government’s plan to initiate a domestic continuous build program for the future frigates and offshore patrol vessels further complicates the picture. Predicated as it is, on very substantial improvements to local shipbuilding productivity, the shipbuilding plan is more an act of faith than a bankable proposition. Working in favour of local shipbuilding is the recent substantial decrease in the value of the Australian dollar, which decreases the premium paid for local construction by reducing the relative cost of labour.
But even if Defence’s estimates for the cost of tomorrow’s Navy turn out to be accurate, there’s still the question of whether money will be forthcoming from government. While the Abbott government remains committed to its promise to boost defence spending to two per cent of GDP by 2023-24, there’ll be at least three federal elections between now and then. Critically, while the current opposition has adopted the two per cent target, it’s done so contingent upon economic circumstances and without committing to a date.
Credit: Defence
Irrespective of which party is in government over the forthcoming decade, there will be substantial pressures on the federal budget that will imperil the path to spending two per cent of GDP on defence. First and foremost is the political imperative to return the Commonwealth to surplus. On current projections, a surplus will become feasible around 2019 – at a critical point in the ramp-up of defence spending needed to reach the two per cent target. Given the political capital to be gained from moving to surplus sooner rather than later, it would be a brave government to delay doing so to fulfil a promise about defence spending.
Notwithstanding the uncertainties about future costs and funding, the plans for Navy have the advantage that they are inextricably linked with the politically sensitive question of domestic shipbuilding.
Especially once the next wave of shipbuilding commences, it will have political and contractual momentum that will be difficult to stop irrespective of cost blow outs and funding shortfalls. Of course, that just means that the pain will be felt elsewhere; perhaps in Navy’s personnel and operating expenditure, or perhaps among the other services.
The King’s shilling
As important as equipment and funding is to the Navy, without adequate numbers of trained personnel the fleet cannot fulfil its potential. Historically, the Navy has had the most difficulty of the three services in recruiting and retaining the people it needs. That’s hardly surprising, as naval service routinely entails extended periods of time away from home in peacetime - more so that either of the other two services. Nonetheless, Navy came within a couple of hundred positions of its planned personnel strength last year. At the same time, the remediation of the submarine workforce has been progressing according to plan.
What’s behind the apparent improvement? It may be that the end to the mining boom has reduced competition for the sort of skilled tradespeople that the Navy needs. At the same time, however, the Navy also deserves credit for its Next Generation Navy program that’s been addressing issues of culture leadership and structure (for more on New Generation Navy and Plan Pelorus, go to P130, the back page, for our From the Source interview with Chief of Navy Vice on opening spreadiral Tim Barrett).
Looking to the future, the personnel component of RAN capability can’t be taken for granted. There was a time when service in the Navy conferred benefits that were hard to find in the civil sector, such as quality training, travel and adventure. But the steady march of prosperity has closed the gap between what Navy can offer and what’s accessible to all.
At the same time, the ardours of life at sea remain challenging, even given the improvements to shipboard facilities. If the Navy hopes to have the people it needs to crew the expanded fleet, it will need to continue improving its employment offer in line with the expectations of potential recruits. The government’s recent decision to limit the military pay outcome to a sub-inflation annual increase of two per cent can only make the task more difficult.
The future of the RAN
Apart from the false hope raised by the aborted 2009 Defence White paper, the prospects for the Navy have probably never been as good as they do today. And notwithstanding the challenges of funding, personnel and executing the shipbuilding plan, there’s a chance that things will proceed broadly as expected for a time. More than that we can’t hope for, no plan is immutable – nor should it be.
Changes to the strategic environment and the technology of warfare will surely reshape the plan in the years ahead. That’s okay; we will soon have a long-term plan for a stronger Navy which can be adapted to the needs of the future.
Note: Andrew Davies is senior analyst for defence capability and director of research, and Mark Thomson is senior analyst for defence economics at the Australia Strategic Policy Institute (ASPI). The views here are their own.