Saturday, April 12, 2014


This column is about the submarine industry, not their utility. And it's a story of chaos and dysfunction.

The Collins program spends 40 percent of the Navy's maintenance budget on a weapon used by just 6 percent of the personnel.

As I suggested in the Canberra Times, it looks as if here we go again . . .


The Channel 10 journo’s question had the sort of ruthless clarity normally associated with the Spanish Inquisition. “Minister, just on the twelve subs, can you see why the people of Adelaide see this as a broken promise?” But David Johnston, who’d just given a speech backing away from building the vessels, didn’t blanch for a second. Firstly, because he’s a politician and secondly, because nothing’s been decided. Instead the Defence Minister insisted no, the government was not going back on promises made in opposition and yes; submarines would still be built in South Australia. But the whole process is being reassessed.

Understand? Clear as mud.

Yet nevertheless, despite all the headlines focussing on his speech, he apparently didn’t make himself clear. The very next day David Gould, the Defence Material Organisation’s General Manager Submarines, delivered a speech outlining exactly why Australia needs to build twelve boats. It’s got nothing to do with strategy, but without this seemingly magic number a “continuous build” can’t be achieved. Knowledge and capacity would be lost. This is why a country that can’t even manage to build a cost-effective, family sedan is, nevertheless, expected to cough up more than $40 billion dollars – or another national broadband network – on a program to build vessels more complex than an aircraft carrier.

This week the Australian Strategic Policy Institute hosted a conference billed as the “Submarine Choice” – but the arguments simply shot past each other. Nothing connected. The Navy stressed its strategic need for submarines without reference to the budget; industry obsessed about the business case without worrying about how such massive expenditure would severely unbalance the forces; while politicians agonised over the need to save jobs and save money, despite the fact these objectives stand in direct contradiction to one another. In the meantime, the bandwagon rolls remorselessly onward.

Now none of this should be read as being in any way critical of the DMO (which is attempting to optimise shipbuilding to get the best value for the taxpayer); the Navy (desperate to show-off its skills in the highest-stakes intelligence game in Asia) or the taxpayer (who needs more money so as to buy extra copies of the Canberra Times). This is, after all, why we have politicians: they arbitrate between competing interest groups to divide up the goodies. But, as Johnston’s response revealed, they can be shy in accepting responsibility. This is why they, in turn, commission Defence White Papers. These can offer the cover that allows them to make the necessary decisions and allocate resources.

You’ll hear proudly from industry and the Navy how the challenges associated with a new submarine would “push the envelope”. They would. In fact the cost associated with the project means the envelope would rapidly become pushed so out of shape it would become extremely difficult to still fit a balanced force inside the container. This leads to the next question: how important are the capabilities we’d be acquiring from the submarine and do these justify eviscerating the army, surface fleet and other R&D efforts in order to possess a single element of force structure? I wonder, but that’s not a question that’s troubling the enthusiasts.

Formulating grand strategy sounds very technical, but it’s actually not. It just means aligning means (resources) to ends (objectives). In the past the envelope of our economic superiority has been so large we’ve been able to do this the way we want. That’s now changing. This means we need to find another way of reconciling ambitions with what we’re prepared to pay for. This is where the Swedish experience is particularly informative.

Johnston mentioned the new Japanese submarine with its Air Independent Propulsion system as offering a possible option for Australia. Quite apart from the fact that Japan has never on-sold its technology, is determined to keep it secret, and China would be furious; it’s worth noting that the large engine around which the boat’s powered is, in origin, Swedish.

The past month has witnessed a sudden and radical split in the European sub-building industry. Saab has been contracted by Sweden’s government to investigate developing a new vessel that would, critically, incorporate this sort of new, cutting edge technology but still fit inside the fiscal constraints that govern spending on defence.

It would be nice to be able to see top-of-the-line, underwater platforms continuously rolling off our Adelaide assembly-line – but it’s just not going to happen. This is what we aimed for with the Collins and it explains why the submarine project fell into the catastrophic mess that briefly saw the entire fleet inoperable. There’s no need to repeat this disastrous experience. Jointly developing the new boats with the Swedish doesn’t condemn us, in any way, to something second-rate.

Instead it means we can harness our technical experience with the Collins; own the intellectual property for the vital power-plant; build in South Australia and, perhaps most critically, gain a vessel that meets the needs of the navy and the budget.

Nic Stuart travelled to Sweden courtesy of Saab.

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