The following is a modified version of ADM Publisher Ewen Levick's opening address to the 21st ADM Congress on 21 February 2024.
The release of the government's Surface Fleet Review has generated a lot of commentary. Much has been focused on the recommendations made in the review, the feasibility of its delivery, or questions it raises that remain unanswered.
I would like to use the Surface Fleet Review to make an entirely different point.
I joined ADM in March 2018. Two years prior, the Defence White Paper 2016 was released and Naval Group were told they would build the Attack class submarine fleet for Australia.
Two months prior, Luerssen were told they’d be building 12 OPVs, per the 2016 White Paper. Two months after I started with ADM, BAE Systems were told they’d be building nine Hunter class frigates.
Now we debate the outcomes of the Surface Fleet Review, but there is one inescapable fact: none of those decisions have survived.
I’ve been with ADM for six years and I’ve seen the Defence Strategic Update and the Force Structure Plan, the DSR and now the Surface Fleet Review – as well as AUKUS. Each of these reviews contradicted the findings of the previous review. We’re planning to make more plans, and each new plan claims the last plan was wrong.
The 2016 Defence White Paper was relevant for 1,588 days before it was superseded by the 2020 DSU and FSP. The 2020 DSU and FSP were relevant for just 427 days before AUKUS was announced; or 1,027 days before they were superseded by the DSR, then the Surface Fleet Review, and shortly the National Defence Strategy.
In the short time I have been in this sector, Australia's highest defence plans - each of which has claimed to be a 'major shake-up' of basic strategic assumptions - have a lifespan of around 1000 days.
As a consequence, the single biggest financial risk to Australian defence industry right now is not the workforce shortage. It is not supply chain constraints; not even the time and money invested in unsuccessful bids for defence contracts.
The biggest risk to industry is actually winning a government contract, and then having that contract fall to a strategic review.
In other words, the greatest risk to industry in this country is government. And as industry ultimately deliver capability to the ADF, government has become its own greatest capability risk.
To be clear, this is a bipartisan problem. The reviews I've mentioned here have occurred under the watch of governments on both sides of the aisle; and the collective contradictory recommendations of these reviews comes from Defence.
Of course, it is the prerogative of a newly-elected government to review arrangements for the defence of the nation. It is also the government's duty to ensure the taxpayer is receiving value for money.
But the higher duty is the actual defence of the nation. Wars aren’t won by the side with the best White Paper or Surface Fleet Review. They’re won by the side that can adapt.
More specifically, they’re won by the side that has the money to adapt, and an industrial system that can adapt quickly. They’re won by banks, by debt, by economies of scale, not by pressing a policy reset button every 1000 days.
So what does this look like? Get capital markets involved. Make defence an attractive asset class. There’s currently around 3.5 trillion dollars in Australian superannuation assets; how much of that is invested in national security?
Look at what the US is doing with the Office of Strategic Capital in the Pentagon; government-backed loans co-invested with private money. Look at an American company recently becoming the first private enterprise to land on the Moon under a commercial arrangement with NASA. This is a government agency pioneering new arrangements with industry to deliver extremely complex capability outcomes, at speed.
That is what adaptation looks like.
I’ll end on this; the Americans are anticipating war over Taiwan from 2027. If they’re correct, that’s 1,045 days away.
1,045 days left to provide the ADF with the capabilities it needs to go to war.
The clock is ticking.