Australia ranks 53 on the list of countries based on population, but is number 12 by expenditure on defence.  On track to reach slightly more than 2% of GDP next financial year, we spend proportionately more on the military than every NATO member except for the U.S., Britain and Estonia. Furthermore, a greater share goes to equipment than many comparable nations because – despite being very well paid – our personnel numbers are under control, especially for the bureaucracy and support functions.

All of this means that the ADF should be very well equipped – and it is.  This year saw further impressive progress in ensuring that Australia punches above our weight and maintains a regional technological edge – an essential ingredient to deterrence given our small population and geographical isolation.  There has been a gradual and commendable shift in acquisition policy in favour of more local production, which is a vital ingredient to achieving a higher level of self-reliance.

Perhaps the most significant procurement decision of the year was the selection of BAE Systems to supply the ‘Hunter’ class future frigates, based on the Type 26 Global Combat Ships under construction for the Royal Navy.  This is the most modern of the three designs evaluated – and it has now also been selected by Canada, opening up further export opportunities for Australian industry.  While optimised for anti-submarine warfare, they will also have formidable anti-air and anti-surface capabilities.

However, the most disappointing feature of the year is also in the naval domain, namely a worrying series of signs that all is not well with the future submarine program.  This is something we have been warning about for almost 12 months, but the Defence bureaucracy and Minister Christopher Pyne worryingly continue with a “she’ll be right” approach.

The huge weakness of the strategy that is being followed – apparent from the beginning – is that there is no Plan B.  This is unique for a strategically vital acquisition.  Plan B for the F-35 capability – which is thankfully no longer needed – was to buy more Super Hornets.  Plan B for the air warfare destroyer program – which was put into place – was to switch from the preferred “evolved design” of a USN ‘Arleigh Burke’ to the unfancied Navantia F-100 being built at that time for Spain.

All options for the future submarine should have been compared with the choice of producing a new generation Collins class – and it is one of the worst public policy decisions of all time that this strategy was dropped in 2014.  It is not too late to fix that problem, though precious time has been wasted.  There is nothing wrong with continuing work with France and Naval Group on a completely new submarine for the distant future – but Australia is facing a capability gap from the late 2020s.  Two things need to happen urgently: a major life extension program for all six Collins and a restart of the ASC / Saab Kockums effort for a new generation version based on the existing platform.

The absence of a submarine Plan B is that Australia risks being held hostage by a single supplier.  This is not at all to question the motives of Naval Group, but to point out the simple commercial reality that the company might make decisions not based on Australian national interest.  We have repeatedly asked the question “what do we do if in – say – 2022, Naval Group conclude that the only way of avoiding a 10 year delay is to build the first three submarines in Cherbourg?”  The answer is the frankly absurd assertion that those circumstances will never arise. On the contrary, with the passage of time that possibility is looking increasingly likely.

The operative word in all of this is: urgent.  It is clear that the power balance in the region is shifting, with China expanding its military force projection capabilities at an alarming rate.  This is combined with a relative decline of U.S. regional power – a process exacerbated by the Trump administration and the growing feeling that Washington can no longer be relied upon as a security guarantor in all circumstances.  Should President Trump be re-elected in 2020 – something that certainly cannot be ruled out – the conditions for Australia are likely to be even more uncertain.

For a long time APDR was inclined to give China the benefit of the doubt because the country has been largely internally focussed and the military build up could be justified as being mainly defensive in nature.  However, the attitude of Beijing to smaller regional countries is alarming – for example with officials actually storming the office of the Prime Minister of Papua New Guinea during APEC – and it is easy to see how this sort of attitude makes conflict more likely.  Also increasing levels of repression in Hong Kong make it clear that countries falling under the sway of China might enjoy a measure of economic prosperity but all features such as human rights – including freedom of speech – democracy and the rule of law will vanish.

To counter this, Australia should move to an even more robust military structure – and some things can be done with relative ease.  The F-35 fleet can be increased, and adding more aerial tanking to the mix – if analysis shows that additional capacity is worth the investment – is also quick and relatively inexpensive.  Increasing the size of the regular Army can also be undertaken without too much difficulty.  Much more investment is needed in cyber, artificial intelligence, machine learning – and a host of other disruptive technologies.

Of course we hope that none of these capabilities will ever need to be used in anger – and on that note we would like to wish everyone in the entire Defence community a happy, prosperous – and most importantly of all – peaceful Christmas.

 

 

 

 

 

 

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