Submarines show national security comes at high cost
On Saturday in The Weekend Australian, Australian Strategic Policy Institute CEO Peter Jennings called for a new Defence white paper to rethink the strategic changes accelerated by COVID-19. The 2016 Defence white paper concentrated on long-term investment proposals for the ADF. But the government now needed to focus on the capability of the defence force and what could be done quickly to increase deterrent capacity and strike power, Mr Jennings, a former a former deputy secretary for strategy in the Defence Department, argued. One area that needed attention, he said, was the capacity of the industrial base to rapidly produce critical inputs for war despite interruptions to global supply chains.
The estimated cost of building the 12 Attack-class submarines, the nation’s largest-ever defence investment, has soared to $90bn, up by almost $10bn in five months, mainly due to currency fluctuations and inflation calculations. The projection does not include the $145bn cost of maintaining the boats over their 50-year lifespan. As Ben Packham writes on Monday, the spike has prompted calls for a rethink of the ADF’s wider procurement plans.
The submarines are vital to national security. As the 2016 Defence white paper noted, by 2035 about half of the world’s submarines will be operating in the Indo-Pacific region where Australia’s interests are most engaged. They will not strengthen the nation’s deterrent capacity and strike power in the next decade, however. Construction of the first of the Shortfin Barracudas, to be built in Adelaide, to French company Naval Group’s specifications, is not scheduled to start until 2024, for completion in the early 2030s. The final boat is due for completion in the mid-2050s. Buying a ready-made product, the option favoured by Tony Abbott as prime minister, would have strengthened defence preparedness much earlier. On the positive side, building the submarines should boost Australia’s capacity to produce defence equipment independently. Quality control and cost containment will make or break the project, the outcome of which will be vital for national security and have a significant impact on the budget bottom line in the years of recovery from COVID-19.
From the outset, The Australian was wary of the “populist protectionism” behind the decision to build the vessels in Adelaide. It appeared to be more about shoring up jobs, local industry and votes in South Australia ahead of the 2016 federal election than securing the best boats at lowest cost in the shortest time to cover looming gaps in defence capability. In January, a report by the Australian National Audit Office revealed the submarines’ design phase was running nine months late. It also revealed Defence had approved the fabrication of complex hull parts for the first future submarine to be undertaken in France, rather than Australia, to guard against further delays.
Amid deteriorating strategic circumstances, the COVID-19 crisis has presented an opportunity, either through a fresh white paper or another process, for the ADF and government to review other major hardware procurements. New anti-ship missiles and better cyber and satellite capabilities were urgent priorities, ASPI senior analyst Marcus Hellyer told Packham. In the context of China’s increasing militarisation across the Asia-Pacific and Indian Ocean regions, maximising the effectiveness of defence spending needs to be a central priority of the Morrison government as it focuses on economic recovery post-pandemic.
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