Wednesday, 14 September 2011
Matters of Public Interest
Australian Defence Force: Submarines
At the last election Labor promised Australians that it would provide the Australian Defence Force with the means to keep our borders secure. That pledge was made in the context of Labor's 2009 white paper, which contained $275 billion of defence acquisitions. To date we have seen little money provided to support those acquisitions. In fact in May Labor announced that it was actually taking $4 billion from the defence budget. At the same time we have seen that our submarines are dysfunctional, with capability significantly diminished and their future sustainment uncertain and, more importantly, unfunded.
We are now in desperate need of a practical plan to restore Australia's submarine capability. Prior to the advent of the Collins class, Australia consistently maintained a regionally superior force of capable and reliable conventional attack class submarines. Australian submarines and their heroic crews provided specialist capabilities that have for a long time successfully deterred armed aggression against Australia and advanced our national interests regionally. The Collins is a Labor legacy bequeathed to us in the 1980s. It has a long and unhappy history of intractable design and technical problems.
Despite these problems, the 2006-07 annual report of the Department of Defence reveals that under the management of the Howard government the Collins met 98 per cent of readiness targets in 2007 and mission capability was substantially achieved. Today's figures are anybody's guess. The government is so embarrassed about its lack of capability and reliability that it no longer publishes these figures for the Collins. Not only do we not disclose our 'task ready days' for this platform but we cannot even mention 'unit ready days'.
A government that fails to properly maintain a reliable deterrent platform vital to our nation's defence is as much a threat to our national security as any external threat. Generally we all try to leave politics out of defence issues but, having said that, we are duty bound to intervene when policy unravels through incompetence, inaction or both; section 51(vi) of the Commonwealth Constitution demands nothing less of each of us. Today I draw to the attention of senators the dangerously moribund state of our submarine force and a looming gap in this key strategic element in our nation's defence. I point to a department that is struggling to achieve any reasonable outcomes and highlight a clear lack of any leadership or initiative from a government in malaise and a minister in lethargy.
Let me start by reminding senators just why the nation invests significant millions of hard-won Australian dollars in submarines in defence of our island nation. Submarines have stealth. Stealth provides a submarine with covertness, the military advantage of initiative and surprise and the ability to operate in hostile environments with little or no risk—to hide its location and intentions from a well-equipped and potentially more capable enemy. A stealthy, capable submarine makes for a truly very difficult-to-detect asymmetric weapon and one of the most cost-effective defence deterrents by any measure or perspective.
Despite the tireless and courageous efforts of our dedicated and highly skilled submariners, Australia's submarine force is not what it must be if it is to fulfil our requirements and expectations. From the beginning, the Collins had very significant reliability and capability problems. In 1999 the then minister, John Moore, commissioned the McIntosh-Prescott report. The report highlighted fuel system problems, diesel engine problems, noise issues, propeller issues, periscope and mast issues and combat system issues, to mention but a few of the more obvious problems besetting the class. Simply put, the boats were not fit to be sent into harm's way.
A Submarine Capability Team was put together and a spend of over $1 billion was initiated to fix the platform systems, the combat systems and the manning issues. Although some progress was made, it was short lived. Ten years later we still see a submarine force with intractable, ongoing problems. To put it bluntly, the Collins as a class is inherently unreliable, technically challenging to maintain and difficult to crew. We rarely have more than two submarines available to go to sea and there have been instances of late where there have been none—repeat, none—available in defence of our nation.
At the same time we have seen the costs of maintaining these submarines skyrocketing. It was revealed in the February estimates that in the six years to 2010 submarine sustainment costs went from $203 million per annum to $325 million per annum—a 60 per cent increase. At the same time, the number of boats available has been substantially in decline. Defence officials agreed that this was 'of concern to us' but did their best to sidestep questions as to whether the spend represented any value for money for the taxpayer.
At May's estimates, Defence revealed that the sustainment cost had climbed by a further $90 million to $443 million per annum—a 25 per cent increase across five months and a 120 per cent increase over seven years. Again the availability of boats continues to fall. In other words, we are paying more and more for less and less, with the defence minister having completely lost control of the sustainment cost of this force element group. By comparison, our closest ally, the US, has on any given day over half of its 54-strong submarine fleet actually at sea on planned operations.
The failure to achieve reliability with our submarines has had a devastating effect on our submariners and the wider Australian Defence Force. Having two boats randomly available for operational service—and that is on a good day—does not allow our submariners to practise their trade regularly enough to gain the competence and confidence needed to fight and win. To make matters worse, the constant need for our submariners to fight defects rather than the enemy has seen an exodus of experienced personnel from the ranks of our submarine force. The money set aside for a mid-life improvement program that would have kept our submarines technologically ahead of the game and regionally dominant is consumed simply getting the boats into the water.
Defence at Senate estimates now concedes that our submarines are less capable than the new entrant boats in the region, which have better indiscretion ratios on account of their air independent propulsion systems, greater operating depths, greater manoeuvrability and agility, greater quietness, digital sonar arrays, highly advanced and totally integrated combat systems, advanced weapons and more capable countermeasure systems. The dominance Australia once had in regional submarine capability has, despite the best efforts of our very committed submariners, evaporated. A lack of submarines has also meant that our anti-submarine warfare forces have had limited assets to train against, limited opportunity to develop and test tactics, and limited opportunity to test and trial new anti-submarine warfare technologies.
The current situation with our submarines has also weakened our overall defence posture in terms of deterrence. Most nations in our region have a reasonable understanding of the parlous state of our submarine force. Not being able to send them to major exercises such as RIMPAC or having them break down very publicly in Singapore has not served to assist us. This year we are scheduled to spend $443 million on simply sustaining our ailing Collins class fleet. It should be remembered that each of the six boats cost about $1 billion and that HMAS Rankin was commissioned in 2003 and is currently in Adelaide being cannibalised for parts and will likely never swim again. It has lasted less than 10 years of its planned 25.
Defence has recognised the need to eventually replace our Collins class submarines. However, instead of Defence going through a proper and robust analysis, as is normally the case when a new or military replacement capability is planned, a future submarine force solution was politically injected into the 2009 Defence white paper by the then Prime Minister Kevin Rudd. Like so very many of his grand and elaborate visions, it was not well thought through. The Defence white paper describes a Walt Disney style, large conventionally powered submarine that no-one has ever built. Mr Rudd's grand plan called for 12 unique submarines designed to Australia's exacting requirements. Defence does not have a good track record with respect to high-risk, high-cost developmental projects and Rudd's plan was fraught with massive danger from day 1.
Even if a unique and indigenous submarine program could be run perfectly and deliver a world-leading, large conventional capability, it is inconceivable that such a capability could possibly be worth the $36 billion the independent Australian Strategic Policy Institute estimates that such a submarine fleet would cost to build. Proper cost-benefit analysis was not carried out to identify alternative solutions to our future undersea warfare needs. The use of highly capable and effective military off-the-shelf submarines—perhaps slightly modified—the use of submarine tenders and the forward basing of submarines are alternatives that should have and must be properly explored. However, what is most perplexing is that Labor has never put forward a proper business or economic case with respect to the grand Rudd vision. This plan is naive, to say the least, and precisely why no Labor defence minister has even been near the file or put it to cabinet or is even willing to discuss it in public. There is, however, a case to build our future submarines in Australia. An in-country build of a proven submarine design is an option that must be fully considered by whoever is in government. Such an approach could provide benefit across the national manufacturing sector and serve as a foundation for future submarine sustainment and enhancement.
The Future Submarine Project, as we all know, has stalled. Defence is at a standstill, as is the Australian defence industry. The minister's lack of interest in solving the Collins sustainment problem and delaying any action by instigating three concurrent inquiries—one internal and two external—so that the issue is effectively swept under the carpet for at least a further six months is completely counter to the national interest.
The Coles review, commissioned to investigate the problems with the Collins class, is not due to report until April next year. The minister is clearly groping around for direction and has no idea which way to turn. Because of this, he has worryingly stated—and the alarm bells are now ringing very loudly—that he will not turn his mind to the development of the new submarine until the problems with the Collins class have been sorted out. This is a folly of national proportions. The minister has effectively hamstrung the Future Submarine Project with all of the problems of Collins. The obvious danger, given the recent facts and history, is that the progress of SEA 1000—that is the new project—will remain dependent upon the resolution of the Collins issues, which on present indications means a delay which creates a significant shortfall in our capability, or, in other words, a capability gap.
Our submarine capability gives every indication of heading in the same direction as our amphibious force capability: missing in action when urgently required. Collins is at the top of the DMO's projects-of-concern list and has been there for some time, despite the first of this class being launched over 20 years ago. Even if a concerted and hugely expensive program were embarked upon to extend the life of Collins, it must be recognised that these submarines lack the capability edge we require to be dominant in our sphere of influence. Unlike the amphibious ship debacle, which saw the Navy unable to respond in a time of national civil need, when we call upon our submariners to do their bit it will not be because we have a cyclone on the way, it will be because of a very serious military need or threat.
Unless decisive action is taken, Australia faces losing its hard won submarine warfare capability. This is most likely to occur at exactly the time when our great ally, the United States, will be at its nadir in terms of submarine numbers—an attack submarine force of only 39 submarines is anticipated in the year 2030. It is imperative that we do things differently. To continue to bleed scarce resources from other critical defence capabilities and vital social infrastructure is simply not an option.
With Collins there have been numerous internal Defence reviews, independent reviews and Auditor-General reports, as well as the generation and regeneration of an integrated master schedule, in-service support contract renegotiations, the rewriting of the Navy to DMO materiel sustainment agreements, a PricewaterhouseCoopers led submarine capability improvement program, and the recently commissioned Coles review. Unfortunately, neither Pricewaterhouse nor Coles will likely come up with a silver bullet or any solution at all. What they will do is buy the minister time as he treads water avoiding any real decision to advance the capability, old or new.
The defence minister has simply lost control of the costs of the sustainment of the Collins. Unable to think of anything else, he has now moved to a situation where he is attempting to smother or hide the problem, or delay the inevitable, with review upon review. With 348 very senior executive service officers in Defence being paid, on average, $276, 000 a year plus car plus benefits, why does the minister have to go to highly paid consultants to give him advice at every turn of every corner? Our submarine force does not need another review. What is required is judgment and leadership from the review stricken defence minister. Whilst he dithers and procrastinates, whilst he bobs and weaves avoiding any difficult decision, our national security is further jeopardised. The solution is to crank up a process that yields a viable plan that is affordable, pragmatic and a return to basics—a plan that will provide government with all the necessary tools and information to sign off on a future submarine program that is, in a word, doable. To continually ignore or defer the problem, as three successive Labor defence ministers have done, has been a significant mismanagement of public policy, not to mention a waste of money. The defence minister thinks the issues associated with our Collins class submarines are maintenance issues. He also thinks our future submarine program can be delayed year after year. It cannot. Both issues are more than this. They are issues of national security and as such the minister has a responsibility and a fundamental obligation to address them in a timely and effective way.