He who controls the sea...

...Controls everything, according to the Athenian Admiral, Themistocles. Australia is heeding this advice and investing heavily in its ability to use and control the sea.

It's easy to forget the ADF's commitment to its maritime capability as the components of that capability are somewhat fragmented, and most live in the shadow of the $6.5 billion Air Warfare Destroyer program.

But the scale of the RAN's fleet renewal amounts almost to a re-invention of the service: the AWDs and LHDs will transform the ability of the ADF to project its power within the region and further afield, and to protect its assets against a range of credible tactical and strategic threats, ranging from diesel-electric submarines to (eventually) theatre ballistic missiles.

The Navy's new platforms (including its Armidale-class patrol boats and tanker) will be augmented by upgrades to its FFGs, Anzac-class frigates, Collins-class submarines and Seahawk helicopters. The bill for this enhancement in capability will be around $12 billion over the next 10 years.

That is a significant investment in maritime combat power. It reflects the fundamental reality that Australia is an island continent and that we depend utterly on our ability to use our sea lines of communication as and when we wish.

However, maritime power should not be used to promote and protect a stance based on splendid isolation: the whole point of the renewal the RAN is undergoing is that it allows the ADF to play a role in distant events that affect Australia and her interests directly.

Now, more than ever, sea power is a component of a joint construct, the ADF, whose roles and responsibilities have grown with the recent upsurge in terrorism.

The enhanced Navy will serve and support, and be supported in turn by, a Hardened and Networked Army which will be required to deliver an ever-wider range of effects in a far wider range off circumstances than could have been predicted 20 years ago. And they will be supported by a RAAF whose own transformation process is getting under way slowly with the development of ground-based and airborne early warning and control. These will be crowned - hopefully within a decade - by a new generation of tactical fighters, the F-35 Joint Strike Fighter.

The essential point here is Jointness - no part of the ADF is more important than the whole. Indeed there is no credible whole unless all parts are in harmony.

Therefore the ongoing pressure on the defence budget which has received much attention in the mainstream media is something of a worry. ADM understands that the issue of whether Defence should continue to receive its current three per cent annual increase beyond 2010 will be discussed in Federal Cabinet as part of the wider deliberations shaping the 2006/07 budget in May.

While a three per cent increase is vital to maintain the capability we currently enjoy, there is a growing consensus that even this is insufficient to pay for the capabilities and strategic options the Federal government wants the ADF to provide.

Notwithstanding the anticipated pressure on the Federal budget caused by an ageing population, it's become clear that the ADF's budget is as low as it can reasonably go. The tragedy is that it has been allowed to shrink so far because, while the political battle to maintain the budget is winnable, trying to convince the government and taxpayers that it should grow significantly looks like an almost impossible task at this time.

Two things would make the task easier: better acquisition performance by the DMO; and better delivery performance by industry. These would remove much of the resistance to a budget increase based on perceptions that Defence acquisition is inherently inefficient and wasteful.

As we show in this edition of ADM, the DMO is making a determined effort to change both the perception and the reality of defence acquisition in this country. Industry is being drawn along the reform path also. There is no better time for DMO and industry to be seen to be putting their respective houses in order - we're all in the same boat, if you'll pardon the pun.

The December-January edition of ADM traditionally includes our annual listing of the Top 40 defence contractors and the Top 20 SMEs. Once again I'd like to congratulate the companies which have topped the rankings this year. With a strategic review under way and a new Defence Capability Plan due out early in 2006, and much riding on the next Federal budget, 2006 looks like being an interesting year for us all.

On that note I'd like to thank you, the readers, along with our advertisers, for your support throughout 2005. As always, I pay tribute to my colleagues at ADM and Yaffa Publishing without whom this magazine couldn't survive and flourish and I'd like to wish you all the compliments of the season and safe and prosperous new year.