The navy’s surface fleet announcement is the inflection point for our national strategy.
A year on from the delivery of the Defence Strategic Review it feels as if the Albanese government has hit a tipping point. The doubters have been lining up. The complaints about the pace of reform, the lack of ambition and, most significantly, the lack of new dollars have been growing louder.
On the flip side, new acquisitions, structural reform and policy development in line with the DSR have been making steady, albeit slow, progress. The new national defence strategy is imminent, and without this critical document and an integrated investment plan aligned to the strategy no one knows how much implementing the DSR will cost. However, the pressure continues to build.
To some, the drums of war are beating. Many have been demanding the government play international security whack-a-mole; others argue the strength of the nation’s resilience lies in focusing on economic growth and broader diplomatic engagement.
Despite repeated declarations of a deteriorating strategic environment – necessitating the end of a strategic warning time — at the release of the DSR on Valentine’s Day last year the government announced there would be no new money for defence in the forward estimates. In political terms it was an own goal. In national security terms it was an untenable position.
Into the eye of this storm sailed the Royal Australian Navy’s fleet review. But it is not just a surface fleet review in focus. Strategy requires focus, discipline and hard choices. This is a defining moment for the government in defence and national security — it is the inflection point of its credentials in the defence portfolio and its commitment to the strategy that underlines it.
From a capability stance the DSR called for a reappraisal of the size and shape of the navy with a focus on an enhanced lethality, speed to capability and a higher number of tier 2 vessels.
In addressing these issues the Albanese government largely delivers. The end of the unarmed offshore patrol vessels program, the announcement of a fleet of 11 new general-purpose frigates to replace the current Anzac-class and the overall rise of the surface fleet to 26 major surface combatant vessels meets the strategic needs laid out in the DSR. Most important, it is a major step forward to recapitalise a navy whose fleet is the oldest it has ever been.
The additional funding for Defence to deliver on this announcement and the government’s ongoing focus on demanding “excellence” from the department in its reform program are timely. An investment of A$11.1 billion is a key investment but the question will be: Is A$1.7 billion in the forward estimates enough in the short term?
The review rightfully stands firm on continuous shipbuilding in Perth and Adelaide. It provides speed to capability, with an offshore and hybrid build for the new general-purpose frigates, a decision that reflects the limitations of our shipyards, labour shortages and strategic needs. Equally as important, we are looking at new partners in our region, South Korea and Japan, as potential sources for capability.
The new-general purpose frigates sit at the core of this announcement. Their rationale goes to the core of the missions that the DSR demands of our navy.
The debate about tier 1 and tier 2 surface combatants in the DSR has often been misunderstood. The DSR’s directive always was aimed squarely at avoiding the continuing proliferation of light armed or unarmed patrol vessels that did not suit the deteriorating strategic circumstances. It was always about uplifting the navy’s capability.
It was never about swapping out tier 1 vessels for tier 2; it was always about more vessels, more firepower and more capability.
This requires the RAN to operate far less tier 3 style vessels such as the OPV — opting instead to enlarge the navy’s size and structure by operating more capable, missile-armed ships. In the end it is about navy growing, in the number of vessels, lethality and tonnage overall.
The cancellation of the OPV program at six vessels and the announcement of a new fleet of 11 general-purpose frigates and six large optionally crewed surface vessels deliver on this outcome. This is the central component of delivering on the strategy.
But the fleet review maintains one of the most controversial and problematic capability programs in Defence’s history: the Hunter-class frigate program.
The reduction of these vessels from nine to six also saves the government no money across the forward estimates or the next decade, nor does it provide speed to capability. It is underarmed and under powered while being over-engineered, overweight, oversized and vastly over budget. Adding Tomahawk missiles to the Hunter does not resolve these issues.
The $20b blowout in the Hunter-class budget should have spelt the end of a program littered with entrant decision-making based on wishful thinking rather than detailed analysis. Reducing the fleet will add to the unit price cost of what is already the world’s most expensive frigate. The key question is: Did it survive because of the sunk-cost fallacy, domestic political demands or the lack of a viable alternative in the timeframe required? Such is the complexity of defence shipbuilding.
The Hunter has the potential to dog the government, Defence, navy and the Australian taxpayer for decades to come. Putting it back on track will be a herculean effort; only time will tell if this is a bold or a foolhardy decision.
Offsetting this is a future-focused decision to develop six new large optionally crewed surface vessels, armed with missiles to support the fleet. This decision grasps the changing character of war and provides for an asymmetric solution to the growing missile gap in the RAN. A fleet of autonomous arsenal ships offers the potential for the navy to close this gap quickly, cheaply and with a much reduced crew profile. This is critical given the navy’s foundational challenge for its development is workforce.
The fleet review outcome is bold. It is reminiscent of the decisions of the Hawke-Beazley era in Labor’s defence governance, albeit with a potential millstone around its neck in the form of the Hunter program. The announcement delivers in strategic, capability and funding terms. Ultimately, though, the real test for the government and Defence starts now. Can the capability system and the navy learn from the lessons and mistakes of the past and deliver the new plan on time and budget?
The answer to these questions must be in the positive: not only in the name of taxpayer dollars but also for the safety and security our citizens need in perilous times.