Jon Stanford

Is DCNS’s imaginary Shortfin Barracuda submarine Australia’s biggest defence blunder?

The Turnbull government’s decision on the future submarine (FSM) represents bad policy. It is bad for the Navy, bad for the taxpayer and bad for the future defence of Australia. Given the key role the FSM is meant to play in the future of the naval shipbuilding industry, it is also bad news for South Australia.

The Navy’s requirement is for a uniquely large conventional submarine (SSK) that can undertake force projection missions far from home. This in itself raises important strategic questions. Is this an appropriate role for Australia? Does the US want Australian submarines to operate in the South China Sea? In practice, should only nuclear submarines (SSNs) undertake such missions? (more…)

A response to Richard Broinowski. 

While the government might emphasise the roles for the new submarine that may be regarded as defensive – “intelligence, surveillance and reconnaissance” – Richard Broinowski ignores perhaps the most important role, namely power projection in the East and South China Seas.

This role was perhaps most graphically illustrated the Rudd government’s 2009 White Paper, which first made the case for 12 powerful new submarines. Rather extraordinarily, that White Paper mooted the possibility of unilateral action by Australia against a ‘major adversary’:

“But we do assume that, except in the case of nuclear attack, Australia has to provide for its own local defence needs without relying on the combat forces of other countries. The Government considered such contingencies because although they are unlikely, they are not so remote as to be beyond contemplation. …In such circumstances, in order to defend ourselves we might also have to selectively project military power beyond the primary operational environment described in this White Paper, for instance in maritime Southeast Asia.” (Page 65)

Lest there be any doubt, the 2009 White Paper (Page 59) suggested that “we will use strategic strike if we have to”. (Page 59) It stated that:

“The Government places a priority on broadening our strategic strike options, which will occur through the acquisition of maritime-based land-attack cruise missiles. These missiles will be fitted to the AWD, Future Frigate and Future Submarine. …The incorporation of a land-attack cruise missile capability will be integral to the design and construction of the Future Frigate and Future Submarine.” (Pages 70 and 81.)

Although the 2016 White Paper dropped all references to strategic strike, this does not mean that the aspiration has been discarded. Certainly, the requirement for 12 powerful, long range submarines has not changed since 2009. This is not the first time that Australia’s defence strategy has required the acquisition of a unique military platform. In 1963, the Menzies government ordered a special version of the American F-111 aircraft with the range extended so as to allow it to reach Jakarta.

In any case, it seems clear that one of the reasons that Australia requires a unique conventional submarine is so that the RAN could undertake operations that most navies would leave to nuclear submarines, namely power projection against a ‘major adversary’ in contested waters far from home. For example, Rear Admiral Ray Griggs, former Chief of Navy (2011-14), defined the most significant operational task for the future submarine as “sinking hostile ships and submarines” and said that the area of most interest is the South China Sea. [1] Also, the new submarine will have the ability to launch either American or French cruise missiles through its torpedo tubes.

It is difficult to build a logical strategic case for the acquisition of twelve large submarines with a very long range unless this power projection role plays a central part. Yet, as Australian Strategic Policy Institute has pointed out, it is not clear that the Americans would welcome Australian submarines playing such a role in the case of a conflict in which we were part of a US-led coalition. We can only hope that any Australian aspirations to take on a ‘major adversary’ unilaterally have, like a former sabre-rattling American general, “simply faded away”.

[1] Peter Layton (2015), “Australia’s next submarine – will it be the Soryu”, Defence Today, Vol 11, No 4, page 8.

 

Part 1: Technology risk

Introduction

The most important acquisition included in the government’s Defence White Paper, released in February 2016, is the decision to procure twelve new submarines for the Royal Australian Navy (RAN). With an acquisition cost of at least $50 billion (and with a much higher through life sustainment cost), this is by far the largest defence programme in Australia’s history.

Australia has made some extremely costly errors in defence procurement in the last few decades, particularly naval acquisitions. The Hawke government’s decision to specify a unique requirement for the Collins class submarines and to build them locally has caused very considerable problems related to cost and availability. It is over ten years since the Howard government awarded the air warfare destroyer (AWD) project to ASC and still not one ship has been delivered, with the cost per vessel in excess of $3 billion and still climbing. As Hugh White has pointed out, if Australia had ordered three Arleigh Burke destroyers from the US at that time, they would have cost around $1 billion each for more capable ships and been delivered long ago.[1]

In this context, the proposed acquisition of the future submarine (FSM) raises a number of complex issues and involves substantial risks. Because of the extremely high cost of the project, these issues should be thoroughly evaluated before any binding commitment is made. The fundamental issue concerns the high risks involved both in the decision to develop a unique Australian submarine and in the possible government disposition to build it locally. We also need to remember that these issues involve not just financial risks but also the risk of sending service personnel into harm’s way using inadequate equipment.

This article is in three parts. This first part contains a brief discussion of the main technical risks involved in the acquisition of the FSM. Major economic and financial risks around the proposed investment are evaluated in Part Two. Finally, the implications of the analysis, including a proposal for an alternative, less costly and risk-minimising approach to delivering advanced submarine capability, are addressed in Part Three.

Technological superiority in the Asia-Pacific

In order to compensate for its numerical inferiority, a traditional objective for the Australian Defence Force (ADF) has been to maintain a level of technological superiority in its equipment relative to potential adversaries. The White Paper states that: “maintaining Australia’s technological edge and capability superiority over potential adversaries is an essential element of our strategic planning.” [2] In relation to the FSM, “the Government has determined that regionally superior submarines … are required to provide Australia with an effective deterrent… The key capabilities of the future submarine 
will include: anti-submarine warfare; anti-surface warfare; intelligence, surveillance and reconnaissance; and support to special operations.”.[3]

In the light of previous statements and given the requirement for a very long range, it seems clear that operations in the South China Sea would lie at the heart of the FSM’s mission. Activities in those congested waters would include reconnaissance, intelligence gathering and, perhaps, special operations, moving to anti-shipping and anti-submarine interdiction should hostilities break out. The question then is, will the FSM embody the advanced technologies required to discharge this mission?

Will the FSM embody ‘regionally superior’ technologies?

The statement in the White Paper that the FSM will be regionally superior in terms of its technology is highly contestable. In general terms, a conventional submarine (SSK), however advanced its design, will be inferior to a nuclear submarine (SSN), particularly in prosecuting a force projection role in distant, contested waters.

First of all, a nuclear boat is a true submarine; it will not need to refuel during its service life and its underwater range is limited only by the endurance of its crew. A SSK needs to come to periscope depth from time to time to run its diesels (‘snorting’) and recharge its batteries; this ‘indiscretion’ makes it much more vulnerable to detection. For a conventional submarine like the Collins without air-independent propulsion (AIP), the indiscretion rate ranges typically from around seven to ten per cent on patrol at four knots, and 20 to 30 per cent in transit at about eight knots.

Secondly, a SSN has a high underwater speed (over 35 knots) and can withdraw from any threat very quickly. A SSK can only generate a burst speed of about 20 knots submerged for a short period of time, less than one hour, and then, using AIP if fitted, its speed underwater is limited to around three to five knots.

Thirdly, the size and power of a SSN means it can carry much more kit (such as torpedoes, anti-ship missiles, cruise missiles and mines) than a SSK.

A very important attribute of a SSN is the ability to generate sufficient electrical power so as to run today’s advanced electronic sensors and systems for as long as is required. Already the power hungry sensors in the Collins class, including the vital combat system (of US origin and originally designed for nuclear boats), make a heavy demand on the available power, requiring the submarine to undertake more frequent snorting to recharge the batteries, thereby raising the indiscretion rate. This will become increasingly important as submarines are required to carry more and more sophisticated electronic equipment.

On the other hand, although contemporary SSNs are extremely quiet compared with legacy designs, the one advantage still possessed by a SSK is its ability to run very quietly underwater. Once detected, however, every submarine skipper would exchange this advantage for the very high speed capability of a SSN. As a US expert notes, “AIP does not give … the sort of high-speed power which saves a submarine once it is being pursued. Only nuclear power can give that…”.[4]

In terms of the White Paper’s goal of regional technological superiority, it is true that potential adversaries in the Asia Pacific (with the important exception of Russia) do not currently deploy many nuclear submarines and the ones that are operational are not particularly effective. It may well be that the new submarine, if it were in commission now, for a few years could boast technological superiority in the South China Sea, where it is clearly designed to spend most of its time. While China already has nuclear submarines, they are crude by contemporary western standards, noisy and not considered a significant operational threat. On the other hand, if it realised its potential, Australia’s new submarine would be very quiet and its AIP system (or alternatively substantial banks of lithium-ion batteries) would allow it to patrol submerged, albeit at a slow speed, for around a month.

But the problem is that the FSM is not in the water now. The first boat will not be available for at least fifteen years. This makes it highly unlikely that it would be technologically superior even when it is introduced and much less so in the out years to 2050 when the final FSM will be commissioned.

Even by 2020, the FSM would find it difficult to counter the submarine fleet deployed by China. The White Paper states that: “By 2020 China’s submarine force is likely to grow to more than 70 submarines”.[5] Yet the White Paper is coy about the fact that this total will include up to nine modern SSNs and up to five nuclear powered ballistic missile-armed submarines (see Tables 1 and 2 below). 
By 2020, therefore, it would be difficult to argue that the FSMs, even ten years before the first one will be available, would be ‘regionally superior submarines’.

Table 1: China Submarine Fleet,2000-2020 [6]

Type	2000	2005	2010	2015	2020
Diesel Attack	60	51	54	57-62	59-64
Nuclear Attack	5	6	6	6-8	6-9
Nuclear Ballistic	1	2	3	3-5	4-5
Total	66	59	63	66-75	69-78

 

Table 2: China Submarine (Attack) Fleet, percentage modern, 2000-2020 [7]

Type	2000	2005	2010	2015	2020
Diesel Attack	7%	40%	50%	70%	75%
Nuclear Attack	0%	33%	33%	70%	100%

Beyond 2020, the technological development of China’s navy is likely to continue apace. Both India and China now have nuclear submarines with the ability to launch long-range nuclear missiles, at the least in second strike attacks. While intensively developing its indigenous nuclear submarine capability, India is actively seeking Russian assistance in developing an advanced SSN capability. It already has commissioned one capable Russian SSN of the Akula class. It is inevitable that China, perhaps with technological support from Russia, will step up its SSN development. Other countries in the region (Indonesia?) may seek to acquire SSNs by the 2030s. At the very least, Australia needs to consider these possibilities in determining the FSM acquisition. The absence of any discussion of this in the White Paper constitutes an important omission.

Improvements in detection technologies

In recent times, the rapid growth in computer processing power has enabled the use of technologies such as undersea laser detection of foreign objects and sound monitoring to enhance substantially the ability to detect submarines underwater. Add to this the improvements in low frequency sonar to detect submarines at very long range, and the playbook has changed very considerably. Also, constant improvements to radar (such as the US equipment that Australia deploys in its fleet of P3 Orions), and SSKs are in much greater danger of being detected when they come to periscope depth in order to snort. Larger submarines, of the kind that Australia is seeking to acquire, are more vulnerable to detection because of their larger footprint and acoustic signature.

Andrew Davies, a naval specialist at the Australian Strategic Policy Institute (ASPI), has analysed future trends in anti-submarine warfare in terms of the FSN acquisition:

“The net summary is that future submarines will need to:

• operate away from chokepoints and contested spaces but be able to project influence into them
• have a low indiscretion rate
• be a hub for a suite of long-range sensor and weapon systems
• be networked with other units, including electronic warfare platforms and systems
• be able to manoeuvre quickly in response to a rapidly changing threat environment.” [8]

Davies goes on to say: “of course, that list pretty much says ‘SSN’, but that’s not going to happen”.

Davies’s conclusions are of critical importance for the FSM. He states that “the design of the future submarine has to be cognisant of these trends, which will make penetration of adversary space or operations in contested chokepoints by the submarine itself very much harder. Basing our investment around traditional ideas of submarine operations isn’t likely to be a winning strategy a couple of decades from now.” Australia needs “to decide whether our subs are going to play in the highest end operations. If we decide we need to, we’re necessarily going up the risk reward curve for a conventional boat.” One approach, in the absence of the nuclear option, would be to “temper our ambitions and settle for a fleet that can still operate effectively in less than the most challenging situations.” [9]

Other roles for the FSM

These less challenging situations suggested by Davies would include sea denial in the approaches to Australia and the littoral, where the RAAF may control the airspace and could operate in support. They would also include the other roles assigned to the FSM in the White Paper, namely reconnaissance, intelligence gathering and special operations. To the extent that these can be conducted closer to base and away from contested chokepoints, these are standard roles for a conventional submarine (SSK). They have been at the centre of successful operations of the Collins class and, before that, the Oberon boats. Over the last half century, Australian submarine crews have spent substantial time lurking underwater and reporting shipping movements around Vladivostok or monitoring mobile phone calls on Java.

A conventional FSM with the ability to spend a long time underwater without snorting would be well capable of undertaking all these roles, although there is likely to be an advantage for the submarines in being smaller than the size required by Defence for the FSM. As a former commanding officer of Collins class submarines puts it, “I do not believe an SSK significantly larger than Collins is possible, much less a good idea. There will always be some missions that can’t be achieved; let’s focus our solution on the ones which can.”[10]

Jon Stanford is a Director of Insight Economics.  He had a significant career as an economist in the Australian Public Service, ultimately in the Department of Prime Minister and Cabinet.  He has worked extensively on economic and policy issues around defence procurement and naval shipbuilding.

[1] Hugh White (2015), “Naval shipbuilding in Australia: a strategic necessity?”, The Strategist, Australian Strategic Policy Institute, August, http://www.aspistrategist.org.au/naval-shipbuilding-in-australia-a-strategic-necessity/

[2] Australian Government (2016), Defence White Paper, Canberra, page 16.

[3] Ibid, page 90.

[4] Asia Pacific Defence Reporter (2010), “Submarines – The Future”, 21 December, http://www.asiapacificdefencereporter.com/articles/102/SUBMARINES-THE-FUTURE

[5] Defence White Paper (2016), op. cit., page 42.

[6] US-China Economic and Security Review Commission (2014), “Chinese Navy extends its combat reach to the Indian Ocean”, Staff Report, March, page 12.

[7] Ibid.

[8] Andrew Davies (2014), Trends in submarine and anti-submarine warfare, Australian Strategic Policy Institute, Canberra, http://www.aspistrategist.org.au/wp-content/uploads/2014/04/ASPI-submarine-conference-2014-Davies.pdf

[9] Andrew Davies (2014), op. cit.

[10] James Harrap (2012), “Reflections of a Collins submarine captain”, Asia Pacific Defence Reporter, 3 May, http://www.asiapacificdefencereporter.com/articles/226/Reflections-of-a-Collins-Submarine-Captain

 

 

When people remember Gough Whitlam, few would identify him as an economic rationalist. Economics was not his primary interest and, partly because of the perceived urgency of implementing “the programme” after 23 years in opposition, partly because of the incompetence of some of his Ministers, the budget blew out excessively on his watch. Yet in terms of microeconomic reform his record was, in many ways, better than that of previous and subsequent Coalition governments. Even including all the reforms by the Hawke/Keating governments in the 1980s and 1990s, Whitlam’s 25 per cent tariff cut in 1973 remains the single greatest stand alone initiative to open the Australian economy to international competition.

A lesson from the past

Whitlam’s economically rational approach also spilled over into defence procurement. This is an area, as experience demonstrates, that provides spectacular opportunities for squandering public money, not least in the naval shipbuilding industry.

By the early 1970s, the Royal Australian Navy (RAN) needed to replace some obsolescent warships of British origin, many of which had been built at high cost and over excessive lengths of time in Australia’s government-owned shipyards. Defence’s preference was to design and build locally an Australian light destroyer, the DDL project. When the Whitlam government came to power, design work on the DDL had been going on for some years under the Coalition and the Navy was an enthusiastic supporter of the project.

While there would have been significant political benefits in endorsing the project, clearly the risks of a local design and build would have been high. The complexities of integrating a new platform with overseas sensors and weapons, even the less complex systems available in the 1970s, would have led to substantial risks. Building ships locally to an original design would have inevitably resulted in higher unit costs, even in an efficient shipyard, than purchasing a ship from a longer production line overseas. On the basis of the local shipyards’ demonstrated past performance, bringing the project in on time and on budget was highly unlikely.

In 1973, soon after coming to office, the Whitlam government considered the proposed DDL project. While recognising the need for a new acquisition, it also considered that there was no unique mission for a surface warship in the RAN that would justify the costs and risks of designing and building a new Australian platform. The government therefore rejected the DDL and told Defence to go away and look at overseas platforms. Grumpily, Defence came up with two options. The Navy liked the handsome British Type 42 destroyer platform but not its sensors and weapons systems. It approved of the US Oliver Hazard Perry class (FFG) systems and missiles but not the platform, which had a single propeller shaft and resembled a container ship. Typically, Defence sought to mix and match. It wanted the British platform with the US missiles and radars and an American 5-inch gun.

The Whitlam government faced Defence down again. It rejected the mix and match option as being excessively risky and an Australian build as not cost-effective. In 1974 it ordered the FFG ships with all their systems, to be built in the United States with no significant modifications. The Navy was not happy. The Perry design had been described huffily by Defence project staff as “a second rate escort that falls short of the DDL requirements on virtually every respect”.[1] But the government understood that the frigate would provide technological superiority in our region at low cost, with the Australian ships coming off a production run of over 50 vessels. The RAN did not require the world’s best frigate; it was unlikely to be confronting the Northern Red Banner Fleet in the Barents Sea.

In service, the FFGs have been successful. They were minimalist platforms that did the job, to the extent that subsequent governments decided to build two more ships locally (a decision that initially seemed disastrous until Transfield acquired the Williamstown shipyard from government and delivered them on time and on budget). They were also tough and durable. The Perry class USS Stark survived two hits from Exocet missiles, while the Type 42 HMS Sheffield, with significant aluminium in its platform, was destroyed by one. Critically, because they were not unique ships for which the RAN had parent navy responsibilities, through life support and maintenance, undertaken in Australia to US schedules, was cost effective.

More recent history

To clarify, through life support for the FFGs was cost-effective during their planned economic lives, but then Defence delayed the procurement process for their replacement, namely the air warfare destroyers (AWDs). Seriously bad decisions then raised their ugly head.

First, at a time when the US was retiring their Perry class FFGs, Australia decided on a unique major upgrade for its six ships, including improved sensors, modern systems, better anti-submarine weapons and vertically launched anti-air and anti-ship missiles. Awkwardly for those who believe we need to build ships locally in order to modify them, ADI (later Thales) in Sydney won this contract in competition with the Transfield shipyard in Williamstown that had very recently built the last two FFGs. The cost and timeline for the upgrade blew out substantially, with the modifications then being limited to four of the six ships. The other two FFGs were scrapped much earlier than intended. The cost ended up being $1.6 billion for four ships as against a budget of $1.266 billion for six, a blowout per ship of 90 per cent. Two ships short, they were also delivered two years late. In addition, there have been suggestions that the additional weight exceeds the ships’ design parameters, potentially creating stability problems.[2]

Secondly, following the successful local construction of the Anzac class frigates, the Howard government decided to procure the AWDs locally. Compared to the Anzac acquisition, the decision was a bad one for a number of reasons. First, there was no fixed price contract for the successful tenderer or any notion of specifying a similar cost to acquiring the ships offshore. Secondly and quite extraordinarily, while the Williamstown yard with its experienced workforce on the Anzac ships still in place was a tenderer, the contract was awarded to ASC in Adelaide that had never built a surface ship. The shipyard was dedicated to submarine maintenance and had no shipbuilding workforce. Thirdly, building three ships locally (as against ten Anzacs) was never going to be economic because of limited opportunities to exploit scale economies and learning curve benefits. Overall, if we had bought three larger and more capable Arleigh Burke ships off a 100 plus production run in the US, the RAN would already be deploying them and, rather than waiting for three smaller ships to be delivered three years late, the government would have banked significant budget savings.[3]

Lessons learnt

There are multiple lessons to be learned from these and other recent acquisition experiences. In particular:

1. Acquiring a unique platform, as Australia did with the Collins class submarines, brings with it substantial risks and almost certainly excessive costs compared to an off the shelf acquisition. Some of these costs are reflected in the parent navy responsibilities for a unique class, which lead to higher through life support costs – currently running at nearly $1 billion annually for Collins. Implication: if Australia does not have a unique defence mission, then we should not acquire a unique platform.
2. Mixing platforms from one country with systems from another involves very high risks, and frequently gives rise to unforeseen costs and delays that exceed substantially any perceived military benefits. Implication: only mix and match systems and platforms as a last resort and only if the risks are understood and accounted for in the budget and timeline.
3. Developments in technology mean that obsolescent platforms do not necessarily need to be replaced by similar assets. For example, some of the roles of a submarine could be taken over by aircraft, unmanned aerial vehicles or the Australian Signals Directorate. Implication: focus on the defence requirement, not the particular platform, and assess how it might be best achieved at lowest cost and acceptable risk.
4. Building major defence assets locally often involves very substantial risks, higher costs and contingent liabilities that are almost impossible to justify. For example, we would not contemplate designing and building in Australia a major aircraft like the F-35 joint strike fighter or a main battle tank for the Army. There are no significant defence benefits in building platforms locally and the level of protection to naval shipbuilding is higher than for the car industry. Implication: only build major platforms locally under a fixed price contract and where the cost is comparable with that of offshore acquisition – it’s time to end the age of entitlement for the naval shipbuilding industry.
5. The main role of defence industry should be through life support – as Australia’s record with RAAF assets show, we don’t need to build platforms locally in order to sustain them at the highest level. Implication: try to shift the political debate away from building defence assets, which leads us into sub-optimal acquisitions, to focussing on the benefits of maintaining Australia’s assets in top condition for the benefit of ADF personnel.

Implications for the new submarine

On the basis of the above analysis, we need to consider the implications for Australia’s new submarine’s acquisition process. Currently, three broad proposals have recently been lodged by shipbuilders in France, Germany and Japan. These proposals are for a large conventional platform, unique to Australia, with a combat system and weapons systems sourced from the United States. The government intends to select one of these proposals in the near future to be taken forward in a detailed design.

In terms of the first implication above, the fundamental question is whether Australia needs to acquire a unique submarine platform to meet its requirement and discharge its mission. The only fairly detailed definition of the new submarine’s mission was contained in the 2009 Defence White Paper:

The Future Submarine will be capable of a range of tasks such as anti-ship and anti-submarine warfare; strategic strike; mine detection and mine-laying operations; intelligence collection; supporting special forces (including infiltration and exfiltration missions); and gathering battle space data in support of operations. [4](Page 70.)

Subsequently, the then Chief of Navy suggested that the main task of the new submarine was “sinking hostile ships and submarines” with “the South China Sea as the area of most interest”.[5] Overall, it seemed clear that one important role for the new submarine was power projection in waters far from home.

While this is an ambitious mission, particular for a middle power, it is by no means unique. All five of the permanent members of the UN Security Council would have a similar role for their submarines. Among western platforms, the power projection role in the South China Sea, although challenging, could be best discharged either by a Virginia class submarine from the US, an Astute from the UK or a Suffren boat from France. These are all nuclear submarines. While Australia would face some challenges in acquiring nuclear submarines, these are not insuperable. A nuclear submarine off these existing production lines may well be no more expensive than the unique conventional submarines under consideration and we would need fewer of them.

On the other hand, attempting to undertake this mission in a conventional submarine would be less effective and more dangerous. The submarine’s slow underwater speed and significant indiscretion rate would increase the risk of detection and destruction. The recent acquisition of nuclear attack submarines (SSNs) by China and India in our region suggest that any conventional boat operated by Australia would not enjoy technological superiority in the South China Sea. By the time the new Australian submarines are commissioned in ten or fifteen years time, both countries are likely to possess a fleet of SSNs, the more modern ones of which will be quieter and more efficient than the prototypes. This raises the awkward question of whether an Australian government would be willing to send young Australians into harm’s way in very expensive but technologically inadequate kit.

If the answer to this is “No” but the government remains unwilling to acquire nuclear submarines, then logic suggests that the mission needs to change. Specifically, the government could discard the power projection role and leave that task to a better-equipped ally. Forget discharging cruise missiles at a “major adversary” and scratch the idea of sinking ships in the South China Sea. This then leads to a sea denial role in the context of the defence of Australia, with additional intelligence gathering responsibilities. Would this require a unique platform? Again the answer is “No”. These tasks could be undertaken by existing conventional submarines available off the shelf from a number of shipbuilders, including all three of those in the design competition for Australia’s new submarine. One obvious candidate would be the existing Soryu class, which is larger than other available designs and, in its latest guise, takes advantage of advanced Japanese Lithium-ion technology.

If the government were to change the mission to sea denial and intelligence gathering, however, then it should first look at whether a submarine provides the most cost-effective means of fulfilling this role (see the third implication above). The capability of conventional submarines in the sea denial role is compromised by their slow speed, while to send a submarine to snoop off a neighbour’s shore is not necessarily the most cost-effective way of recording wireless transmissions overseas. By contrast, some of the RAAF’s fleet of modern aircraft, including the E-7A Wedgetail airborne early warning and control platform and, in the future, the P-8 Poseidon maritime patrol aircraft, have a potent capability in both sea denial and intelligence gathering.

 

Conclusions

In short, this analysis suggests three alternative ways forward for the new submarine:

• Maintain the current mission and seek to acquire perhaps six nuclear attack submarines (at most) from the US, the UK or France.
• Reduce the scope of the submarine’s role to sea denial and intelligence gathering and acquire, say, between four and six conventional boats off existing production lines overseas (possibly from Japan).
• Examine whether the sea denial and intelligence missions can be delivered more cost-effectively by platforms other than submarines, such as aircraft already in service or currently being acquired.

None of these options requires a unique platform or merits an Australian build. Importantly, all three options offer significant savings compared to the current approach. Even if the SSN option were to be pursued (it would require difficult negotiations with the United States and assistance in maintaining the reactors), the overall cost would be significantly lower than buying 12 unique platforms with a mixture of systems, particularly if they were built in Australia.

All three options, however, would mean abandoning the current acquisition process. It is not too late to do that, but government would need to enter into an intensive process with some urgency to analyse the options in more detail. While strategic and technical military analysis is clearly required, it is of critical importance that these technical data should then be fed into an evaluation of risks, costs and potential pay-off for each option. It is not clear that such an approach, which would combine rigorous cost-benefit analysis with the investment appraisal disciplines of financial economics, is generally employed when Defence is assessing costly new acquisitions. Because Defence still has a single line budget appropriation (why?), its internal processes are often impenetrable to the keepers of the keys in Finance and Treasury.

Why I began this article by reference to Gough Whitlam and the proposed DDL acquisition was to suggest, in agreement with Laura Tingle, that the government has lost its corporate memory and its ability to learn lessons from previous approaches.[6] It seems remarkable, for example, that our defence acquisitions keep repeating the mistakes of the past, from mixing and matching systems inappropriately and accepting excessive risks, to allowing political judgements to override efficiency considerations and the proper regard for the public purse. In the new submarine acquisition, we seem even to have learned nothing from the Collins class procurement. In both cases the French, surely laughing up their elegant sleeves, have offered us a dumbed down version of an existing nuclear submarine, with the reactor replaced by an updated version of the same diesel-electric technology that powered Australia’s first submarine, AE1, on its epic voyage from the UK in 1913.

“We learn from history that we do not learn from history,” was Hegel’s gloomy prognosis. I prefer Santayana’s view, quoted by Laura Tingle, because it seems to offer a shred of hope: “Those who cannot remember the past are condemned to repeat it”.

 

Jon Stanford is a Director of Insight Economics. He had a significant career as an economist in the Australian Public Service, ultimately in the department of Prime Minister and Cabinet. He has worked extensively on economic and policy issues around defence procurement and naval shipbuilding. 

[1] Jones, Peter (2001). “1972–1983: Towards Self-Reliance”, in Stevens, David. The Royal Australian Navy. The Australian Centenary History of Defence (vol III). South Melbourne, VIC: Oxford University Press, page 220.

[2] Defense Industry Daily (2014), http://www.defenseindustrydaily.com/australias-hazardous-frigate-upgrade-04586/

[3] In the early 2000s, the US offered to sell three second-hand Arleigh Burkes to Australia for a good price so as to avoid the risky upgrade to the FFGs. The RAN rejected this, just as previously it had, with more justification, rejected the offer of the four very large destroyers of the Kidd class.

[4] Australian Government (2009), Defending Australia in the Asia Pacific Century, Defence White Paper, Canberra, page 70.

[5] Peter Layton (2015), “Australia’s next submarine – will it be the Soryu”, Defence Today, Vol 11, No 4, page 8.

[6] Laura Tingle (2015), “Political Amnesia: How we forgot how to govern”, Quarterly Essay No. 60, Schwartz Media, Melbourne.

Recent papers published in Pearls and Irritations by Jon Stanford and Rear-Admiral Ian Richards have suggested respectively that:

• the case for providing significant financial support to the naval shipbuilding industry is flawed, both on defence policy and industry policy grounds
• there are unacceptable risks involved in building Australia’s proposed new fleet of submarines locally.

In this article I seek to move back from the issue of local or overseas acquisition of the new submarines and attempt first to address the more fundamental question of what exactly the Australian government wants these submarines to do. That then leads on to the second question of what technologies the submarines will need to deploy in order to undertake this mission most effectively and at minimal risk to their crews.

What is the new submarine for?

The role for the new submarines was set out in the 2009 Defence White Paper prepared by the Rudd government. This remains a remarkable document, particularly in the context of a genre usually characterised by emollient phraseology, platitudes and evasion.[1] In setting out how Australia’s strategic circumstances have changed, largely due to the rise of China, it ventured into territory where previous Defence White Papers had feared to tread:

“It is conceivable that, over the long period covered by this White Paper, we might have to contend with major power adversaries operating in our approaches – in the most drastic circumstance, as a consequence of a wider conflict in the Asia-Pacific region. In such a circumstance, it is not a current defence planning assumption that Australia would be involved in such a conflict on its own. But we do assume that, except in the case of nuclear attack, Australia has to provide for its own local defence needs without relying on the combat forces of other countries. The Government considered such contingencies because although they are unlikely, they are not so remote as to be beyond contemplation. …In such circumstances, in order to defend ourselves we might also have to selectively project military power beyond the primary operational environment described in this White Paper, for instance in maritime Southeast Asia.” (Page 65.)

The key requirement here is for the ADF to be capable, not only of operating independently and without the protection of a ‘great and powerful friend’, but ultimately of unilaterally projecting military power a long way from home, in maritime Southeast Asia. Indeed, the White Paper explicitly states that “we will use strategic strike if we have to” (page 59).

It soon becomes clear from the White Paper that the new submarine would discharge a number of roles, including that of being the primary asset for the delivery of strategic strike:

“The Future Submarine will be capable of a range of tasks such as anti-ship and anti-submarine warfare; strategic strike; mine detection and mine-laying operations; intelligence collection; supporting special forces (including infiltration and exfiltration missions); and gathering battle space data in support of operations. “(Page 70.)

How will the strategic strike capability be delivered? The acquisition of cruise missiles was seen as a key priority, to be delivered by the Royal Australian Navy (RAN), and, if operating in waters a long way from Australia, it seems clear that submarine launched missiles would be the preferred means of delivery:

“The Government places a priority on broadening our strategic strike options, which will occur through the acquisition of maritime-based land-attack cruise missiles. These missiles will be fitted to the AWD, Future Frigate and Future Submarine. …The incorporation of a land-attack cruise missile capability will be integral to the design and construction of the Future Frigate and Future Submarine”. (Pages 70 and 81.)

The 2009 White Paper has been quoted at length because it set out in quite precise terms what the future submarine’s multi-role mission would be. The 2013 White Paper, produced by the Gillard government, was far more reticent in every way than the 2009 version, and was virtually silent on the role required of the new submarine.[2] Yet while the tone may have changed, neither the strategic posture nor the requirements for the future submarine as laid out in the 2009 White Paper have been refuted or significantly amended in subsequent government statements.

More recently, for example, as evidence of the changed emphasis since 2009, the previous Chief of Navy (2011-14), Rear Admiral Ray Griggs, defined the major operational task for the future submarine as “sinking hostile ships and submarines. In contrast, other roles such as intelligence collection, transporting special force teams and land strike using cruise missiles are very much secondary and not significant design drivers.” Yet force projection operations far from home for the submarines still appear to be high on the agenda. “The area of operations seems clear. Admiral Griggs considers the South China Sea as the area of most interest.”[3]

In summary, therefore, while the tone may have become more diplomatic, in public at least, the overall mission of the future submarine is very much along the lines set out in the 2009 White Paper. If some roles have been downplayed by Admiral Griggs, none of them has been deleted from the list. Indeed, in proposing that the main area of operations for the future submarine will be the South China Sea, a contested and congested location not easily accessed from Australia, Admiral Griggs has endorsed a high risk, proactive role for the new boats a long way from base. This is entirely consistent with the 2009 White Paper.

Technology: what kind of submarine does Australia need?

What does this imply for the design of the new submarine? The problem is that some of the roles set out in the 2009 White Paper and later described by the then Chief of Navy can only be effectively discharged by a nuclear powered attack submarine (SSN). Undertaking strategic strike missions, for example, landing special forces or attacking warships and submarines in the South China Sea requires a submarine to have two important attributes apart from state-of-the-art sensors and weaponry.

The first vital attribute is high speed. The 2009 White Paper tacitly acknowledged this (page 70): “long transits and potentially short-notice contingencies in our primary operational environment demand high levels of mobility and endurance in the Future Submarine”. A SSN can make 35 knots underwater indefinitely, while a conventional submarine (SSK) may travel at 20 knots using its batteries but only for very short distances. Using air independent propulsion (AIP) it proceeds at a leisurely four knots. The second attribute is a low indiscretion rate. A nuclear submarine never needs to surface when in its patrol zone whereas a SSK without AIP needs to come to periscope depth, where it can be detected by hostile forces, relatively frequently in order to charge its batteries.

Overall, the high transit speed of a SSN and its ability to remain submerged for weeks on end provide immense strategic advantages. As the British demonstrated in the Falklands War after sinking the General Belgrano, the threat posed by the presence of one or more SSNs can lock up an enemy fleet in port and take it entirely out of the game.

The government, therefore, has written a job description for a nuclear powered submarine. Yet the 2009 White Paper states clearly (page 70) that the “Government has ruled out nuclear propulsion for these submarines”. This decision has been endorsed by subsequent governments. There is an inherent contradiction here that needs to be addressed.

To be sure, Defence has stated that Australia’s new submarine will have a greater ability than Collins to remain submerged for longer. Of the three contenders for the contract, both the French and German shipbuilders are offering AIP. This solution would allow the submarines to remain submerged for about two weeks. Speed, however, is limited to less than five knots and the AIP units are heavy and expensive.

The third contender, the Japanese evolved Soryu class, proposes a different technology, with Lithium-ion batteries replacing lead acid batteries and without recourse to AIP systems. This is potentially a more effective solution and with the rapid development occurring in Lithium-ion technology may well become much better still in the future. More powerful batteries would allow a higher underwater speed, greater endurance and a lower indiscretion rate. Yet there are some significant problems to be overcome. For example, Japanese Lithium-ion batteries used in the Boeing 787 Dreamliner have been known to catch fire, an unacceptable outcome in a submerged submarine, particularly one that is operating in hostile waters.

While an SSK using AIP or Lithium-ion may be quieter than a nuclear submarine, the advantage when compared to a modern American or British SSN such as Virginia or Astute is now marginal. This benefit is outweighed by a considerably slower transit speed for the SSK, slower speed when operating submerged and higher indiscretion rate.

Until recently the RAN did not need to consider the acquisition of nuclear submarines in order to retain its technological edge in the region. Only the Americans and Russians operated nuclear submarines in their Pacific fleets and the games they played were predominantly with each other. In the Asian maritime region, first Australia’s Oberon class and then, in their early years at least, the Collins class were leaders in technology. A few other countries operated less effective conventional submarines but nothing that would cause any concern to the RAN.

That situation has now changed substantially. Several countries in the region operate boats that are technologically more advanced than the Collins class. Even some SSKs, particularly those that are equipped with AIP, outclass Collins in important respects. Of more concern is the upsurge in nuclear submarine acquisitions. Apart from the United States and Russia, both China and India now operate nuclear submarines in the maritime Asia-Pacific and are building up their fleets. Some of these boats have the capability to attack Australian cities with ballistic and cruise missiles. China and India are also building SSNs designed to hunt and destroy other submarines, with the slower SSKs being most vulnerable to such attacks.

The role of China’s nuclear submarine fleet is fairly clear. If positioned west of Hawaii, the new Jin class of ballistic missile submarines could threaten the whole of the continental United States as well as Australia. On the other hand, the role for the Shang class of SSNs apparently is to establish a strong presence in the South and East China Seas. According to one commentator:

“One goal of Chinese submarines is to create an anti-access/area denial zone up to what it refers to as the First Island Chain, consisting of the Kuril Islands, Japan, Taiwan, and the South China Sea. The chain represents the absolute minimum to defend the Chinese mainland. The second goal would be to enforce China’s claims on the East and South China Seas.”[4]

While China’s current fleet of nuclear submarines may lag behind western technological standards at this stage, that nation’s ability to catch up with the west in a short period of time should never be underestimated. Currently, for example, the civilian nuclear industry is developing at a rapid pace in China, with considerable resources devoted to small modular nuclear reactors (aka nuclear submarine power plants). China is also leaping forward in the area of defence electronic systems, particular sensors. Given that Australia’s new submarine will remain in service for perhaps 40 years, it is important to ensure that it is not outclassed before the first boat has left the shipyard.

In a paper on the Future Submarine presented in 2014, Andrew Davies, a naval specialist at the Australian Strategic Policy Institute (ASPI), has analysed future trends in anti-submarine warfare. He concluded that developments in technology, particularly in sensors, would make life increasingly difficult for all submarines, but particularly SSKs. He stated that:

“The design of the future submarine has to be cognisant of these trends, which will make penetration of adversary space or operations in contested chokepoints by the submarine itself very much harder. Basing our investment around traditional ideas of submarine operations isn’t likely to be a winning strategy a couple of decades from now”.[5]

Davies goes on to summarise the implications of his analysis for Australia’s future submarine:

“The net summary is that future submarines will need to:

• operate away from chokepoints and contested spaces but be able to project influence into them
• have a low indiscretion rate
• be a hub for a suite of long-range sensor and weapon systems
• be networked with other units, including electronic warfare platforms and systems
• be able to manoeuvre quickly in response to a rapidly changing threat environment.”[6]

Davies goes on to say: “of course, that list pretty much says ‘SSN’, but that’s not going to happen”. Because of that restriction Australia needs “to decide whether our subs are going to play in the highest end operations. If we decide we need to, we’re necessarily going up the risk reward curve for a conventional boat.” In layman’s terms, that means that if Australia decides to employ a SSK to undertake missions suitable only for a SSN, the lives of the crew would be put at high risk.

Implications

Drawing these threads together, it is not difficult to conclude that, unless the government downgrades the tasks it expects the future submarine to undertake, Australia’s next submarine needs to be nuclear powered. First, any SSK, even a leading-edge boat using Lithium-ion batteries, cannot dominate the battlespace in a region of the world where other countries are deploying nuclear submarines. Secondly, to send a conventional submarine into the South China Sea to attack hostile warships and submarines, to launch cruise missiles or conduct infiltration and exfiltration missions on a hostile shore would not be an efficient or effective use of naval assets and it would place naval personnel at very considerable risk.

The next question is whether Australia is capable of acquiring and operating a fleet of nuclear submarines. Clearly there would be major hurdles, apart from the domestic political issues (incidentally, it would be impossible to build a SSN locally). First, we would need US support which is not likely to be forthcoming. This may well be negotiable, however, particularly if Australia agreed to assume a greater defence responsibility in the region in the context of the US strategic tilt to Asia.[7] Secondly, because we have no nuclear industry, conventional wisdom suggests Australia cannot maintain a nuclear submarine’s reactor. Perhaps the US Navy could be engaged to undertake this task, preferably in Australia but if necessary in Hawaii.

If Australia were to acquire an established class of nuclear submarines from the US or Britain the cost could be substantially lower than acquiring a fleet of newly designed SSKs, particularly if they had to be built in Adelaide. We would certainly not require more than six SSNs and, in contrast to the three conventional submarine offerings currently on the table, we would be buying a tried and tested model. We could also acquire them much more quickly and allow the troubled Collins class to sail into a merciful sunset.

Alternatively, we could accept that Australia would never go to war with a major adversary except as a member of a coalition led by the United States. In that case we could appropriately leave force projection activities in the South China Sea to the US Navy. The role of the ADF, inter alia, would then be to deny any adversary access to the approaches to Australia’s littoral. This may well be a much more realistic and less risky strategy.

But that raises a critical question. Do we need to spend up to $40 billion on new submarines in order to defend Australia’s maritime approaches? The answer to this may well be in the negative because Australia is already acquiring a number of other advanced defence assets that can accomplish this. These include a new generation of frigates that will be highly capable in anti-submarine warfare (ASW). These will be networked into very substantial RAAF assets, including the six airborne early warning Boeing Wedgetails, up to 12 Boeing P-8 Poseidon long-range maritime patrol aircraft, 36 Super Hornets (including 12 of the very advanced electronic warfare ‘Growler’ version) and 72 F-35 joint strike fighters. We already have an excellent aerial refuelling capability. With its ability to locate and destroy hostile submarines as well as surface ships, the new Poseidon in particular will be an important asset in denying access to Australia’s approaches. It is therefore difficult to see how a SSK would be required to play a role here.

Finally, to venture into more sensitive territory, it is not difficult to deduce that the main reason the US is keen for Australia to acquire a new generation of SSKs is not power projection but rather the contribution they would make to intelligence gathering, specifically in the area of communications electronics support measures (CESM). The Kestrel CESM system fitted to the Collins class, for example, provides “wideband signal search, narrowband audio interception and direction finding (DF) over the HF, VHF and UHF bands”.[8] Apart from the considerable strategic benefit offered by the intelligence it provides, this capability presently gives Australia valuable ‘coin’ in the intelligence sharing agreement with the US. Whether or not it could be provided safely and effectively by sophisticated aircraft (manned and unmanned) or satellites rather than submarines is a key question.

Prime Minister Turnbull has stated that, across the broad spectrum of government policy, all options are on the table. In that context, mature analysis of these strategic considerations, before committing to buy very costly submarines, is a major priority. The issue of whether or not the submarines should be built in Adelaide pales into insignificance next to these fundamental questions.

 

Jon Stanford is a Director of Insight Economics. He had a significant career as an economist in the Australian Public Service, ultimately in the department of Prime Minister and Cabinet. He has worked extensively on economic and policy issues around defence procurement and naval shipbuilding both in the public service and subsequently as a consultant. 

 

[1] Australian Government (2009), Defending Australia in the Asia Pacific Century, Defence White Paper, Canberra.

[2] Australian Government (2013), Defending Australia and its National Interests, Defence White Paper 2013, Canberra, pages 81-82.

[3] Peter Layton (2015), “Australia’s next submarine – will it be the Soryu”, Defence Today, Vol 11, No 4, page 8.

[4] Kyle Mizokami (2013), “Asia’s Submarine Race”, USNI News, US Naval Institute, November, http://news.usni.org/2013/11/13/asias-submarine-race

[5] Andrew Davies (2014), Trends in submarine and anti-submarine warfare, Australian Strategic Policy Institute, Canberra, http://www.aspistrategist.org.au/wp-content/uploads/2014/04/ASPI-submarine-conference-2014-Davies.pdf

[6] Ibid.

[7] In recent times the US has been more forthcoming in terms of its willingness to transfer sensitive defence technologies to Australia. To date, for example, Australia is the only country outside the US to acquire the highly advanced electronic warfare EA-18G ‘Growler’ version of the Super Hornet fighter-bomber.

[8] Daronmont Technologies, http://www.daronmont.com.au/dartweb/index.php/projects/kestrel