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The Naval Tsunami and Its Impact on the ADF and Australian Defence Spending

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There’s a tsunami coming. It’s the huge surge of work needed to deliver Australia’s naval capability plan.

Unlike most tsunamis, however, we have some idea of the size of what’s coming. It’s already visible on the horizon. Whether we are prepared for it is another matter. And if we can’t manage that tsunami, Australia will face a capability crisis.

Here’s an outline of the scale of what’s going to hit Australian industry. As many commentators have noted, maritime capabilities will form 38 per cent of Defence’s $330bn capability investment program over the coming financial decade. That’s a vastly greater percentage than in previous plans, resulting in maritime alone being more than land (15 per cent), air (14 per cent) and cyber (7 per cent) combined. That balance will likely extend for at least two decades.

Within the maritime program, the vast bulk of the funds are for local shipbuilding programs – around $85.2bn-108.7bn. That’s mainly the big three of nuclear-powered submarines, Hunter-class frigates and the final eight General Purpose Frigates (GPFs), as well as smaller programs such as landing craft and patrol vessels. Those shipbuilding programs will consume around 11-14 per cent of the total Defence budget.

About $9bn of that is simply a cash contribution to the US’s and UK’s submarine industrial bases, but it still leaves potentially 12 per cent of the total Defence budget needing to get pumped through our shipyards to deliver on the capability plan.

That 12 per cent is driving the tsunami. The US spends less than 4 per cent of its total defence budget on shipbuilding. That might not sound much, but it’s produced the most powerful navy in the world.

However, from the many reports on delayed projects and production backlogs, it’s clear even the US industrial base can’t absorb that spending. Consequently the US government is trying to expand the size of the pipeline (in part with Australia’s cash contribution). In relative terms, we want to push three times as much money through our shipbuilding pipeline. You can be forgiven for wondering whether we can do it.

Another way to illustrate the scale of what’s coming is to look at the tonnage our shipyards will need to produce. Over the past decade, we averaged around 3500 tonnes per year. To achieve the Australian government’s shipbuilding plans, we need to get to around 10,500 tonnes per year by the early 2030s, and around 12,500 tonnes when construction of SSN-AUKUS is up and running in Adelaide. Moreover, there’s not a lot of “easy” tonnes in there since the vast bulk of the work will be highly complex vessels such as submarines and major surface combatants.

While most of that work will need to be done in Adelaide, which has the two biggest projects – the SSNs and Hunter-class frigates, the ramp-up in Henderson in Western Australia will be particularly acute. That’s driven mainly by the General Purpose Frigate program that was announced earlier this year and is going through a rapid selection process. Whichever of the four candidates is chosen, it will be a much bigger and more complex ship than the offshore patrol vessels being built at Henderson. While the first three frigates are to be built offshore, the remaining eight are to be built here and, to ensure no gap in deliveries between those two phases, construction will need to start here in the next few years. By the end of the 2030s, annual tonnage produced at Henderson will need to be nearly three times where we are today.

Domestic naval shipbuilding by tonnage

The tsunami would not be too concerning if it just involved construction of new ships and submarines. But we also need to sustain our existing fleet during the transition period, as well as the new classes when they arrive. The latter are much bigger and by any metric will demand more resources. Moreover, sustainment of the new and old will overlap.

Just in the submarine space, Australia needs to perform the following industrial activities to successfully transition to the future SSN capability:

  • Collins “in-water” sustainment (HMAS Stirling)
  • Collins mid-cycle dockings (Henderson)
  • Collins full-cycle dockings and subsequently life-of-type extension (Adelaide)
  • Submarine Rotational Force-West operational maintenance (HMAS Stirling)
  • SSN AUKUS operational maintenance (HMAS Stirling/Henderson, later also on the east coast)
  • RAN Virginia-class deep maintenance/overhaul, including construction of facilities (location not yet announced)
  • RAN Virginia-class operational maintenance (HMAS Stirling)
  • Construction of the ­SSN-AUKUS shipyard (Adelaide)
  • SSN AUKUS construction ­(Adelaide)
  • SSN AUKUS overhaul/deep maintenance, including construction of the necessary facilities (location not yet announced)
  • Construction of east coast submarine base (Brisbane, Newcastle and Port Kembla are the current shortlist).

Each of these is a substantial industrial activity in its own right. Moreover, as we move towards larger numbers of larger vessels, the requirement in people and dollars will increase; for example, an overhaul of a Virginia-class SSN requires around three times as much work as a Collins full-cycle docking.

Modernisation and automation of shipyards won’t solve this for us. The new shipyard at Osborne, which recently started construction of the first Hunter-class frigate, has been lauded as one of the most advanced and automated naval shipyards in the world. Nevertheless, it will still take eight years to deliver the first ship. Moreover, the cost of the Hunter program has gone from $30bn to $35bn to $45bn, while the scope of the program has been reduced from nine to six vessels, and there’s every indication that reduced scope will come close to consuming the entire $45bn. Technology isn’t driving down cost or schedule.

As always, most attention is focused on the initial acquisition, but sustainment will be equally, or more, demanding. Size is a useful proxy for cost in both the construction and sustainment of warships. We are moving from about 20,000 tonnes of submarine to 80,000, a fourfold increase (and that doesn’t consider the additional overheads involved in safely operating a nuclear fleet). The surface combatant fleet is growing from 50,000 to around 150,000 tonnes, a three-fold increase. Again, we should be cautious about claims that more modern vessels will be cheaper to operate; the cost per tonne of the navy’s new Hobart destroyers is comparable to the ageing Anzac frigates – indeed more if we include the cost of the Hobart’s very sophisticated but expensive US-sourced Aegis combat system. We’re looking at around $12,000-$15,000 per tonne per year for surface combatants (not including the crew or the ordnance). When tonnage is increasing three- or fourfold, it will be a huge cost driver.

Cost is in turn a proxy for work, so there is no doubt that in addition to requiring many more workers to build those fleets, we will also need many more workers to sustain them. Of course, it will be some time until those new fleets are fully delivered, decades in fact, but we are embarking on a steeply climbing curve.

It’s hard to see how we can push all the work, construction and sustainment through the pipeline. Two risks will inevitably be realised. The first is that it will result in cannibalisation of resources, forcing the government to make difficult prioritisation decisions – for example, we simply will not be able to perform all the submarine activities listed above concurrently. Something will have to give.

In fact, we are already seeing this. To free up resources, the Navy has already retired one Anzac-class frigate, eight years before the first Hunter is operational, with another likely soon to follow. It will be the same situation with uniformed personnel. The number of submariners needs to grow from around 800 to 3000. Already submariners are being taken off the Collins, put through the SSN training pipeline and assigned to US or UK SSNs. More submariners are meant to be entering the SSN pipeline alone than traditionally have been produced for the Collins, so we face the prospect of running down the Collins workforce well before our first SSNs enter service.

The other major risk that will be realised is schedule risk; if the work can’t be done, project schedules will lag. As with the first risk, this is ultimately about capability: schedule overrun means capability risk, with ageing platforms forced to serve longer or retire before their replacements arrive. Again, it’s happening already.

These mutually reinforcing risks are putting us in a Catch-22 situation. Take the submarine transition and the Collins life-of-type extension (LOTE). The greater the schedule risk around the delivery of SSNs, the greater the need for the Collins to keep serving. The longer the Collins must serve, the greater the need to keep its capabilities relevant. That means an ambitious scope of upgrades is required for the Collins LOTE, but we know that extensive upgrades to ageing platforms are fraught with technical risk and hence schedule risk. So the more work we need to do in the LOTE, the greater the likelihood that its schedule will blow out, which means fewer Collins will be available to fill the gap out to the SSNs. Plus, whatever resources we put into the Collins are not available to deliver or support SSNs, potentially exacerbating the original problem the LOTE was meant to address; namely, the schedule gap in the delivery of the future submarines.

Recent announcements compound the pressure. For example, the government’s announcement of the General Purpose Frigate may be a desperate but necessary last roll of the dice to avoid the capability train wreck caused by a decade of poor decisions and ensure we maintain a viable surface fleet. But, while the first three vessels are meant to be built overseas (on a very ambitious schedule), the remaining eight are to be built at Henderson. That will compete for industrial capacity with both the conventional and nuclear submarine enterprise. Put another way, the way we have addressed the risks in the maritime capability program also exacerbates those risks.

A well-run company would mitigate these risks to one of its core lines of business by diversifying and investing to develop its other lines. But, as we noted above, with 38 per cent of its investment program dedicated to maritime capabilities, there’s little left over to pursue mitigation strategies in other domains. Defence has just developed the most single-mindedly focused investment portfolio in its history. There’s no Plan B should the tsunami swamp us.

This article was first published in The Australian.

Published by Strategic Analysis Australia.

Featured Image: HMAS Hobart – one of the Australian Navy’s actual ships – a steal at under $3 billion each compared with the future Hunter Class frigates. Image: Defence.

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Triton Enhances the ADF’s Airborne ISR Capabilities

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The Australian Defence Force is on the brink of a transformative shift in its airborne intelligence, surveillance and reconnaissance (ISR) capabilities with the imminent introduction into service of the MQ-4C Triton, an unarmed, high-altitude and long-endurance uncrewed aerial system (UAS).

Use of the Triton will bring far more capability than is generally appreciated, even by close observers of defence policy.

The advanced aircraft, developed by US Navy and Northrop Grumman and based on the company’s RQ-4 Global Hawk, is a testament to the power of modern technology and its potential to revolutionise maritime surveillance operations. It goes a long way, sees far and stays on station a long time; it also networks to tell the rest of the force what it finds.

The Triton’s journey to Australia began in 1999, under Joint Project 2062, with the ADF experimenting with the earliest versions of the Global Hawk. The Triton’s capabilities include an ability to reach altitudes of 15 kilometres (50,000ft), stay aloft for 24 hours, provide real-time data and intelligence and sweep the ocean surface within 250 nautical miles (about 450km) of the aircraft. As a result, one Triton on one flight can surveil more than one million square nautical miles (3.4 million square kilometres)—an area larger than Western Australia.

One task, for example, could be prolonged monitoring of an archipelagic choke point to impose deterrence-by-detection mission.

These characteristics set it apart from any other aircraft on the market and meet the requirements set forth in the Defence Strategic Review for a high level of situational awareness in the Indo-Pacific. The value of the Triton’s capabilities are obvious when one considers the size of Australia’s vast maritime domain, which spans three oceans.

The Australian government has said it will buy four Tritons. In Australia’s primary area of military interest, the US Navy will fly its Tritons from Guam and California, while the US Air Force, Republic of Korea Air Force and Japanese Air Self-Defense Force operate the RQ-4 Global Hawk.

The Triton’s ability to respond quickly to events and maintain itself on station for long periods makes it superior to the new wave of systems that are small, smart and many. But such systems can complement Tritons, improving the capabilities of both simultaneously.

The Triton also enables new approaches to teaming with other systems. The aircraft allows for space-based ISR, including small satellites, to join and then leave the team as they pass through the area of interest on their low-earth orbits.

In peacetime, the Triton’s capabilities can be leveraged for humanitarian assistance and disaster relief. For instance, in the event of a tsunami like the 2004 Boxing Day disaster, a Triton could map the coastal destruction zones of large areas of affected countries in a single sortie, providing vital data for emergency response efforts.

The Triton’s remote operation means aircrew won’t need to deploy with their aircraft, providing home location stability for those choosing a career in Triton operations. Moreover, the highly automated operator interface opens the door to Reserve aircrew, mobility-restricted personnel and even pregnant aircrew, who can operate the system right up to their maternity leave.

Beyond its immediate role, the Triton also serves as a catalyst for the ADF’s broader capabilities in ISR and electromagnetic warfare (ISREW). It is the first platform to send high-bandwidth data across all security domains, up through the satellites and down directly to land and maritime component commanders. Bringing that capability and others, the program is one of a suite of projects creating a framework for follow-on systems. An overlap with other intelligence, communications and networking projects is setting the stage for a more capable, integrated and interoperable ADF.

Tritons will complement the ADF’s crewed P-8A Poseidon’s as a family of systems, undertaking enhanced ISREW tasks. This approach leverages the strengths of both crewed and uncrewed systems, providing a more robust and versatile ISREW capability.

The Triton’s introduction also paves the way for the integration of more advanced uncrewed aircraft by setting a certification precedent. This forward-thinking approach positions the ADF as a leader in military technology, ensuring it can remain at the forefront of military innovation.

The Triton provides benefits to the Australian economy and create jobs at RAAF Bases Tindal and Edinburgh in support of Defence’s industry goals. The cooperative program with the US Navy and the collaboration with Northrop Grumman strengthens Australia’s strategic alliances, enhancing its position on the global stage.

Keirin Joyce is a senior defence analyst at ASPI.

Firsts published in ASPI Strategist on 3 October 2024.

Featured image: Arrival of Royal Australian Air Force MQ-4C Triton Remotely Piloted Aircraft System at RAAF Base Tindal in the Northern Territory. June 16, 2024. Credit: ADF

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Deterrence and Defence Manufacturing: Australia Faces a Major Challenge

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Deterrence has been this Government’s mantra from the early stages of its time in office. Initially promoted under the guise of “impactful projection”, the position was reinforced in the Defence Strategic Review (DSR) with the stated, repeated, need to ‘focus on deterrence through denial, including the ability to hold any adversary at risk’ with the aim to compel an actor to defer or abandon a planned action.

The Strategic Review, and the Government, has focused on the acquisition of defence capabilities that are expected to have a deterrent effect; primarily the acquisition of nuclear submarines under AUKUS Pillar I and long-range guided weapons under the Guided Weapons and Explosive Ordnance (GWEO) Enterprise. Deterrence is also a factor in the recent Enhanced Lethality Surface Combatant Fleet Report and in the Defence Industry Development Strategy (DIDS).

As stated by Colin Gray, deterrence is essentially a state of mind that has developed in the potential aggressor and ‘what matters most is not our capability, but rather what the enemy believes our capability to be’. Therefore, not only do we need the appropriate military systems and hardware, but we also need to be seen to be able to efficiently, effectively, regularly and (if necessary) continuously operate, maintain and develop those systems and that hardware.

Having a visible, capable domestic industry, capable of providing the systems, support and re-supply that the defence force might need, is therefore a key component of deterrence.

In contemporary Australia, this is where the aspirations and the reality diverge.

Whilst the Strategic Review has highlighted that a national industrial base with a capacity to scale when necessary is critical for deterrence to be effective, Australia’s manufacturing and industrial prowess is lacking. The Organisation for Economic Co-operation and Development (OECD) has placed Australia last among its members for manufacturing. Perhaps more tellingly, a recent report has noted that ‘no Australian industry has shrunk more than manufacturing in the last 15yrs – with some urgently needed manufacturing occupations declining by 70%’.

Over the past decades, Australia has become addicted to the primacy of market forces, and the cost competitiveness delivered by global supply chains, over investments in domestic manufacturing. This position was cruelly exposed during the COVID pandemic when, as reported in a Parliamentary Inquiry, ‘Australia’s ability to secure vital supplies became problematic’. These vulnerabilities have, in part, been recognised in the Prime Minister’s recent “Future Made in Australia” announcement.

The latest geostrategic assessments for Australia are that warning time has evaporated and that major conflict is possible in the near term. All Defence planning is supposedly progressing with this in mind. However, the recent DIDS is well and truly rooted in the past, in having time to prepare, and in thoughts of ongoing international resupply. Crucially, the Defence Industrial Development Strategy is also out of step with the Government’s Future Made in Australia plan.

As we are likely to be in the same fight as the supplier of most of the systems and consumables that the ADF uses, resupply will be (at best) uncertain when it is most needed. Solutions such as stockpiling, and/or the greater alignment with the United States and their supply chains, have been promoted as options. Whilst these strategies may have a short-term benefit, they are unlikely to be successful during a prolonged conflict.

The current war in Ukraine has starkly demonstrated that Australia needs more manufacturing. We need to be able to produce the systems and consumables that we will need in volume. We need to be more resilient and more self-reliant than we currently are. We need to show a potential adversary that we will be able to sustain our effort over the long haul. As stated by the US Undersecretary of Defense Acquisition and Sustainment in October 2023, “production itself is deterrence. It’s as simple as that”.

The difficulty arises in that we currently don’t have the manufacturing capability and capacity that we are likely to need. It needs to be developed. As it will cost, prioritisation of investment is necessary. Prioritisation decisions need to be made primarily on strategic, rather than economic, criteria. We need to explicitly address the risks and vulnerabilities that we face rather than pretend that others will help us through the crisis.

The DIDS does not do this. It does not lay a foundation for the development of the defence industry that we need, at the scale that we might need it. Artificially reducing the number of headline Sovereign Defence Industry Priorities by folding everything into seven buckets does not prioritise, does not improve manufacturing, does not improve resilience, and does not provide deterrence. Nothing is a priority when everything is a priority.

There needs to be a more granular linkage between capability and criticality (risk). Four bands of criticality (linked to the mitigation of strategic risk) can be envisaged: the critical, the nearly-but-not-quite critical, the important, and the not-so-important. This would enable the policy levers available to government for industrial development, of which there are many, to be tailored to align with the assessed risk. The greater the risk, the more focused and “hands-on” the potential intervention.

And the Commonwealth Procurement Rules, that arbiter of value-for-money, need to be amended to place greater emphasis on the strategic value of critical capabilities. It makes a mockery of strategic-based decision-making when such considerations are subordinated to an economic rationale that is inconsistent with the prevailing geopolitical circumstances.

In this way the Government can drive towards the development of domestic industry capability and capacity that is likely to be of greatest value should major conflict occur.

More of the same in the industrial space, which we what we are getting, is demonstrably an inadequate response to our current circumstances. The world has moved on. The world is watching.

The development of a visible, vibrant, innovative, and capable industry sector, a sector able to design, manufacture and upgrade critical capabilities, is important. Without that, there can be no deterrence.

Graeme Dunk has completed a PhD into defence industry sovereignty at the Strategic and Defence Studies Centre, Australian National University and is Head of Strategy at Shoal Group, a defence-oriented company.

This article was published by Strategic Analysis Australia on April 15, 2024.

 

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The Australian Government’s Approach to Shaping its Future Strike Enterprise

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If one is trying to navigate the complexities of what the current Australian government is really trying to do and find a way to assess the ADF effects which result from such an effort, I would argue that one would focus on the ability to deliver strike across the areas of strategic and tactical interest to Australia and its core allies.

It is about effects and real delivery of an impact, not simply a focus on future platforms which are not going to be here any time soon.

So how to navigate through the blizzard of reports, statements and assertions by the government?

Let me start by simply citing the government’s recent release indeed on their approach to strike.

According to a government press release:

Long-range strike capabilities and advanced targeting systems will receive $28 billion to $35 billion in the coming decade under the 2024 Integrated Investment Program.

The largest portion, $12 billion to $15 billion, will go to bolstering Navy’s sea-based strike capability, including the acquisition of Tomahawk cruise missiles.

These will arm Hobart-class destroyers, Hunter-class frigates and, potentially, Virginia-class submarines, allowing them to hold targets at risk at longer ranges. 

The funding covers Evolved Sea Sparrow Block II, SM-2 and SM-6 missiles to intercept airborne threats, along with continued integration of the Naval Strike Missile for use against heavily protected targets.

RAAF’s air-launched strike capability also received investment for the F/A-18F Super Hornet, P-8A Poseidon and F-35A Lightning II to be equipped with more advanced weapons.

Funding for development of hypersonic missiles could give Super Hornets the ability to attack targets at longer ranges.

Army’s acquisition of land-based long-range fires are also covered in the investment program.

This includes accelerated and expanded acquisition of 42 High Mobility Artillery Rocket Systems for Army’s first long-range fires regiment.

These will fire the Precision Strike Missile that can engage potential adversaries more than 500km away. 

Funding also covers Army’s Guided Multiple Launch Rocket System munitions, along with new radars to extend sensor and command and control networks.

But how to assess how these various programs will integrate across a kill web to deliver the kind of effects which will be credible to an adversary?

It is a question of how targeting is done, who the data for targeting can be passed to and the range of the weapon carried on a fixed or moving platform and location and with what effects when considered across the allied strike enterprise.

None of this is resolved only by funding considerations, and, for example, their needs to be a realistic public discussion of how new SSNs actually fit into the strike enterprise, for otherwise their is simply cacophony not coherence in the strike enterprise.

And any use of TLAMs by Australia in the context of a Pacific conflict where three adversarial nuclear powers are operating needs to be credibly sorted out if one is framing deterrence by denial as the core focus of Australian defence.

Malcolm Davis of ASPI raised some helpful insights in to how to interpret the government and its framing of the strike enterprise.

In his April 24, 2024 piece on “impactful projection constrained,” he highlighted the following:

Strike capability featured in the 2024 update of Australia’s Integrated Investment Plan (IIP), the equipment spending program that accompanied the National Defence Strategy (NDS) published on 17 April. But the strike capability acquisitions were all re-announcements—or, to take a positive view, confirmations. 

They included acquisition by the navy of more than 200 Tomahawk Block IV cruise missiles, to be deployed on Hobart-class destroyers, Virginia-class submarines and maybe Hunter-class frigates. Integration of the Naval Strike Missile on surface combatants was in there, too. 

The army’s long-range fires mission, highlighted in the 2023 Defence Strategic Review (DSR), is centered on acquisition of 47 HIMARS launcher vehicles that can fire various long-range guided munitions, including PRsM ballistic missiles, at land and maritime targets. PRsMs have a range of 500km but could eventually reach beyond 1000km. If forward host nation support is available in a crisis, then the littoral capability for the army will be crucial in supporting deterrence by denial with these land-based long-range fires—but we cannot assume availability of such support. With that uncertainty in mind, establishing agreements to ensure forward host nation support for the army should be a high priority for defence diplomacy, as noted in the NDS, in coming years. 

Air force capabilities include a previously announced acquisition of AGM-158C LRASM anti-ship missiles to be carried on F/A-18Fs, P-8As and eventually F-35As, as well as AGM-158B JASSM-ER air-to-ground missiles. Another item is integration of the Kongsberg Joint Strike Missile on the F-35A. E/A-18G Growlers will get 63 AGM-88E AARGM-ER missiles for attacking radars. 

What is not really clear is how this fits into a strategic mosaic whereby a kill web enabled force can deliver sustained strike to provide for integrated operations in Australia’s primary area of strategic interest which in my view is out to their first island chain.

This is important not just for the ADF and Australia but to credibly provide any ability to provide a sanctuary for allied forces to be able to leverage Australia’s evolving support structure.

Davis went on in his article to argue for a focus on longer range strike going forward. He argued: “Impactful projection as part of deterrence by denial is the right choice—but we need to reach farther to deter more effectively. A failure to extend our reach could see deterrence by denial fall short in a real crisis.”

But what remains a challenge is to build a force that would be meaningful for longer range strike which can work with allies whose interests both coincide and differ from Australia’s. What would South Korea, Japan, the United States and Australia agree on in terms of coordinated strike in a confrontation with China with North Korea and Russia almost certainly involved?

Featured Photo credited to the Australian Department of Defence and this is their caption to the photo (contained within the press release issued above):

Hobart-class destroyer HMAS Hobart fires an SM-2 standard missile. The Integrated Investment Program will direct funding to missiles that allow ships to hold targets at risk at longer ranges. Photo: Leading Seaman Thomas Sawtell

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