Defence: sub-optimal naval gazing


Rumour has it Australia is about to spend an awful lot of money buying some new submarines. This may not be the sort of thing to get the pulses of the casual reader racing, but it ought to be, not least because it highlights a whole series of intersecting public policy questions that are costly and strategic in every sense of the word.

Submarines – even the sort that are plagued with problems and only occasionally go to sea – are very expensive. The notorious Collins-class submarine was the most costly single defence project ever undertaken in Australia when it was commissioned in 1987 under the then Labor government. This possibly unwanted record was eclipsed by the even more expensive ANZAC Class frigate project a few years later.

There’s some debate about just how much these two projects have cost altogether. Design flaws that had to be corrected, construction problems that had to be overcome, and increased maintenance have all contributed to a blowout in the overall cost of both projects. Indeed, the only certainty about defence acquisitions is that they always cost more than we expect.

The Air Warfare Destroyer program has been particularly badly affected by cost overruns, and was about A$2 million over budget per week, largely because of poor productivity in Australian shipyards. The bottom line seems to be that we’re not very good at these sorts of high-tech projects. This would be something of an indictment of Australia’s manufacturing capacity at the best of times. It’s especially problematic at the moment for at least three reasons.

First, Australia’s manufacturing capacity is being hollowed-out at precisely the same time that the resource boom is patently running out of steam and raising profoundly important, but thus far unanswered questions about where high skill, high pay jobs will come from in the future.

Second, many of the blue-collar jobs that are disappearing are doing so from places like South Australia, which is also the centre of the country’s naval shipyards. The consequences of a further haemorrhaging of manufacturing jobs could be a major political problem. Or it may not, given that South Australia is the last redoubt of the equally beleaguered Labor Party. The Coalition’s promise to build a new generation of subs and warships in SA may go the way of many other recent commitments.

Third, it’s generally not thought to be a good idea to rely entirely on other countries for defence needs. Market forces plainly have their place, but some would argue that the self-reliance is a vital part of overall national security and the bottom line is not the only consideration. But while there may be good reasons to favour some sort of coherent industry policy to revive manufacturing, this sort of project is unlikely to provide the sort of continuity and spillovers that can sustain it.

All of this matters because it seems as if the Abbott government is about to award our “best friend” in Asia – Japan, in case you’d forgotten – a contract to build 12 new submarines to replace the trouble-plagued, ruinously expensive Collins-class. The Japanese, it seems, are very good at building submarines and can offer an “off the shelf” model significantly more cheaply and efficiently than we could.

But there is another aspect to this debate that ought to get an airing but which rarely does. Despite the fact the Collins-class subs were unreliable and rarely available in the way their supporters had hoped and claimed, did it actually make any difference to the security of the country? Not so you’d notice.

This is not a flippant point. The new subs are supposedly going to be vital components of our overall strategic capability, allowing us to gather intelligence and patrol the sea-lanes to our north. No doubt freedom of trade and navigation is vital for an island continent, but are 12 - or even 20 submarines - likely to prove a decisive factor in any actual conflict situation that anyone can imagine?

Does anyone – other than Jacqui Lambie, perhaps – really think that would-be aggressors are only stopped from invading Australia by our naval capabilities? While it may be easy to belittle Senator Lambie’s claims, it’s also important to recognise that they are actually not that far removed from the conventional wisdom.

While some of Australia’s more sophisticated strategic thinkers may not be expecting an imminent Chinese invasion, perhaps, they do think Australia’s military capacity is capable of making a difference to our overall strategic environment – or why would they, too, be advocating yet more military spending?

It currently costs around A$1 billion a year to keep one, at best, two of the Collins-class submarines at sea. No doubt the new ones will be more cost effective and reliable; they could hardly be less so. Whether they are actually an indispensable part of our national security is another question, but one we are unlikely to hear seriously debated in the current security-obsessed environment.