Royal Australian Navy Sea Power Conference, International Convention Centre, Sydney

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Senator the Hon Linda Reynolds CSC

Minister for Defence

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Nicky Hamer (Minister Reynolds’ Office): +61 437 989 927

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8 October 2019

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Thank you very much Chief of Navy for that introduction and welcome to you all ladies and gentlemen – you are all very welcome here to Sydney. Welcome to the Sea Power Conference.

I would also like to begin by acknowledging the traditional custodians of the land on which this most important event is happening this week — the Gadigal people of the Eora Nation — and I pay my respects to their elders past, present and emerging.

I don’t know if Chris is still here, but how good was that welcome to country? So Chris, thank you very much for that.

I also pass on my very special thanks to industry, academia, and our international counterparts who are taking part in this week’s activities. You will hear a lot about collaboration and partnership and it has never been more important than it is today for the reasons I will go through with you now.

Today is not the first Sea Power Conference for me. Two years ago, I stood on this very stage and spoke in my capacity as Chair of Parliament’s Defence Sub-Committee, a former Army Logistician, and someone who had led three large change programs within Army. That day, as some of you who are here, may recall, I spoke about the historic interplay between politics and defence — and the historical dysfunction that it had created. I noted how these dynamics had, in my opinion, thwarted the full delivery of white papers and capability plans since federation in 1901. I warned that historical legacies could not be allowed to derail the delivery of the Naval Shipbuilding Plan — and a fifth-generation Navy. That is why I concluded my remarks back then with this challenge. It was a challenge to find ways to break free of the shackles of these historical legacies to deliver capability in new, collaborative and far more agile ways. That challenge stands today, even as we are on track to deliver the most ambitious naval build-up in Australia since the Second World War.

To be blunt – we are investing in this new naval capability because we must.

As the Prime Minister said last week: “We have entered a new era of strategic competition – a not unnatural result of shifting power dynamics, in our modern more multi-polar world and globalised economy.” Australia is an Indo-Pacific nation and our region is the epicentre of that change. Our region is anxious as it goes through the most significant geopolitical change since the Second World War, which is why in my first month as Minister for Defence, I laid out the following three priorities to Defence’s senior leaders that relate to strategy, capability and transformation.

Firstly – strategy. In our challenging and dynamic strategic environment we need a government-led defence strategy and a supporting strategic framework within the department that is fit for purpose. That means one fit for adaptation, transformation and technological disruption.

Secondly – capability delivery and force integration. As we implement a $200 billion investment in the ADF - $90 billion alone into our Navy - we must ensure that all capabilities are:

1.       Delivered on time and on budget;

2.       Technologically superior;

3.       Fully integrated into a joint Australian force; and

4.       Seamlessly interoperable with our Allies and partners globally.

To achieve these we need seamless collaboration with our trusted industrial base partners here in Australia.

Thirdly – reform. To achieve the first two, we have to continue heprocess of reform within Defence. Transforming Defence into a single strategy-led organisation that is astute in how it sees the world, insightful about how that world is changing, attuned to technological disruption, and is agile and flexible in responding to its external environment. This is true for all parts of Defence — ADF and APS. We must now become One Defence – both in name and also in practice. A whole that is far greater than the sum of the individual parts. Because unity of effort behind a unified purpose – one that has been so clearly and decisively laid out by Prime Minister Scott Morrison - will be vital for protecting the nation and its interests in the decades ahead.

The 2016 Defence White Paper identified major trends shaping our region:

·         The US-China relationship;

·         Challenges to the rules-based global order;

·         The threat of terrorism;

·         State fragility;

·         Military modernisation; and

·         The emergence of new, and complex, non-geographic threats in the space and cyber domains.  

While the White Paper’s analysis of these drivers still holds, it underestimated the speed of that change. Indeed, the world itself has changed more quickly than we assessed in 2016 and so too are the consequential challenges. These challenges operate simultaneously in a dynamic, and quite unpredictable mix. At any point they can compound and cascade, creating challenges of much greater strategic significance than any single one challenge or problem on its own. The challenges are multifaceted, they are multidimensional and they require a whole-of-nation response. There is simply no point wishing that these changes are not happening. They are – the world is rapidly changing.

As a government, under the Prime Minister’s strong leadership - we are working in new ways with regional and global friends and allies to ensure that the rules-based global order adapts to the new realities of our world. Adapting in ways that preserves sovereignty and the elements of that order that have - and must continue to deliver peace and prosperity. For Defence, this means we need to assess these changes and challenges in a hard-headed manner to adapt to the reality of the changes around us:

·         What changes we need to make to our strategy;

·         What changes we need to make to our capability; and

·         And how we transform Defence into an organisation that can deliver on the national tasks for the decades ahead.

This is particularly true for sea power. To protect and defend our national interests — and the nation itself — we will need a Navy that can do many things. It will need to understand its many roles in the national security strategy, it will need to have cutting-edge capabilities integrated across the Fleet, across the ADF and is fully interoperable with our allies; and a Navy that is able to progressively transform itself to meet evolving challenges.

Ladies and gentleman, today our Navy is busier than ever – Navy has on average 20 ships at sea per day, conducting in excess of 200 foreign port visits across 32 nations and participates in up to 30 Naval exercises per year. We are very proud of our Navy and their role. This year alone, Indo-Pacific Endeavour alone, saw five ships visiting seven countries, with 1,100 ADF personnel aboard for five months. That tempo is only set to increase. As a three ocean nation with the one of the world’s largest exclusive economic zones, this is abundantly clear. It is also very clear that all three oceans are becoming increasingly contested.

We are ensuring we maintain a deployable force capable of providing options to government. From assisting with disaster response to operating in high threat environments with coalition partners. Across the Fleet, Navy is supporting our national security interests across the world. Our patrol boats help to keep the nation’s borders secure. Our supply ships are supporting the Navy’s operations, and those of our allies and partners in the region. Our hydrographic and mine-hunting ships are supporting national and military tasking’s — flying the flag and keeping the maritime environment safe.

We have frigates regularly deploying to the Middle East to provide security and stability in that region. Next year, a frigate will participate in the International Maritime Security Construct to support the free passage of civil maritime flows through the Strait of Hormuz.

Our ships are more regularly visiting neighbours across the Indian Ocean to build our relationships through joint exercises and activities. As they traverse the region, our ships exercise rights of freedom of navigation and help keep our oceans open, consistent with international law.

As part of this Government’s Pacific Step Up, we have ships regularly visiting our Pacific island neighbours and working together on security, disaster response and surveillance and also law enforcement. Of course, our Navy also trains regularly with our ally the United States and other close partners for high-end warfare. Navy is not doing this in isolation. Navy is working across the ADF, and indeed across government, to build greater capability. This is particularly clear in the development of the ADF’s amphibious capability.

The rebuilding of knowledge and skills required for amphibious operations has been a major task across the ADF, and Navy is central to that. In short, we ask our Navy to do a wide range of tasks in pursuit of two central goals: protecting and advancing the national interest. Engaging in the region, training for all contingencies — including for high-end warfare, you’d think that would be enough to keep Navy busy but there are more challenges ahead in delivering a major acquisition program while accommodating emerging and rapidly changing disruptive technologies.

Over the coming decades, the Australian Government is investing more than $90 billion in the acquisition of new naval capabilities, including 36 new vessels that will join the Royal Australian Navy fleet. Naval platforms are large and complex – out of necessity. To deliver humanitarian assistance to an island devastated by a natural disaster, we need ships like HMAS Adelaide and Canberra that are capable of deploying hundreds of service men and women, along with helicopters, landing craft, earthmoving equipment, medical support, and the people to operate and maintain them all.

To keep other ships safe in a potentially hostile environment, we need high-tech ships with advanced air warfare capabilities. To provide the stealth necessary to protect our sea lanes, a submarine force will remain an essential element for decades to come. By 2035 we expect around 300 submarines to be active in our region.

But building these platforms, integrating the combat systems, installing the weapons systems and then delivering the full capability will take many years.

In this job, I hear some people say that by the time these platforms are delivered they will be redundant. That misunderstands the reality. Naval platforms adapt and evolve as a capability over time. They are part of sophisticated systems – so focussing only on the platform is a mistake. Weapons systems and countermeasures develop in a never-ending race. Stealth and detection technologies are on the same fast cycle.

But the importance of having the ability to exercise sea control — using air, surface and subsurface assets in unison — will not disappear.

Nations still need the ability to exert their national power through the force of arms if required, and large naval platforms will remain a part of that equation.

The challenge for Navy, for Defence and for the nation, is how to remain flexible enough in defence acquisition to augment major platforms using new and emerging technologies to secure both our offensive and our defensive advantages. This challenge is not, I must be clear, is not simply about getting the right mix of technologies to ensure high-performing naval platforms. Intelligence, surveillance and reconnaissance technology is evolving equally as quickly. Maintaining the information advantage is as important as platform superiority.

The impact of cyber warfare and changing cyber threats to naval platforms and related infrastructure too, is significant. Hypersonic weapons that reduce warning times of an attack to mere minutes are a crucial example. If perfected or when perfected, these weapons will provide an adversary the ability to attack ships from a great distance with a weapon that is unstoppable by current defence systems. Rail guns on ships are another potential game changing technology. The first navy to regularly deploy a rail gun on its vessels will be able to engage adversaries from a much greater distance. Unmanned underwater, air and surface vehicles assisted by Artificial Intelligence are other rapidly emerging areas of technology that will change traditional ways of thinking about naval warfare and sea control.

Ladies and gentlemen, Australia’s Naval Shipbuilding Plan is a truly national endeavour. Navy and Defence cannot do this alone. This Government has recognised that a strong local defence industry is a fundamental input to capability. To succeed we need strong, trusted and reliable long-term industry partnerships – with our small and medium enterprises as well as with the primes.

Industry must do its part – from research and development, to construction; from through-life support to disposal. We need construction infrastructure to deliver the projects; and the workforce to do everything from designing and building ships and submarines, to integrating combat systems and managing the complexity of major programs.

Navy is at the centre of this effort as it sets the requirements, engages industry partners, oversees construction, delivers the vessels, then puts them into service – integrating them with the broader Fleet and the rest of the ADF. The fleet we need in the future will be far more than the capable platforms we currently have in service. The fleet of the future will need to be one that is integrated with the entirety of the joint force, capable of defending itself against everything from small boat swarms to cyber-attacks, and equipped with the intelligence to provide commanders with a clear decision-making edge.

An integrated future fleet needs seamless communication with all platforms in the Australian force and the ability to share information and data with our allies.

It needs to be integrated with a system of threat detection and real-time intelligence analysis that provides insights into the intent and also the capability of adversaries. Just as important as all of these capabilities, is a system that allows us to monitor and evaluate technological and strategic challenges, and adjust our capabilities and policies. Navy — as with any capability manager — needs to be active in its horizon scanning to understand threats and also to rapidly action opportunities. Navy is working with the Defence Science and Technology Group, which needs a clear understanding of what is coming its way and the agility to respond.

As we all know here, the real capability edge that Navy has is its people. Into the future, growing the workforce, finding new employment models and making greater use of autonomous systems - with be key to maintaining this edge.

So how is this government responding to these challenges? Within Defence, two substantial and significant initiatives are underway. Steps that build on the work of the 2016 White Paper, the Integrated Investment Plan and the First Principles Review. First, we are sustaining a dynamic Force Structure Planning process.

This was one of our key lessons from the First Principles Review into Defence completed in 2015. We determined then, that we needed to maintain a force structure planning capability, rather than continually rebuilding it from the ground up each time a new Defence White Paper is commissioned. So now we have a force structure team that is working on how to adjust our current force structure plan to meet new and rapidly emerging threats. Today, we are analysing more contingencies than ever before.

As part of this work Navy has conducted a deep review into its gaps and opportunities to ensure all options are investigated so the future force will be lethal, it will be sustainable and it will be affordable. At the same time, Defence is working through a re-assessment of the strategic underpinnings of the 2016 Defence White Paper and I expect this work to be delivered to me early next year for government consideration.

Secondly we are undertaking a review of how to transform Defence into a truly adaptive One Defence. The First Principles Review made Defence a far more strategy-led organisation. It succeeded, in my mind, in getting the Defence enterprise aligned at the starting line of on an ongoing transformation process. The next step is to define this new, more adaptive strategy framework, to ensure One Defence is agile in responding to current circumstances. This work, too, will be delivered to me early next year for consideration by Government.

Together, these two bodies of work will provide a sound basis for a thorough analysis of our broadening capability requirements and inform any ongoing adjustments we will need to make, now and into the future. I do not envisage any changes to our major capability programs. Advanced frigates and a regionally superior submarine will be a part of our future force. But changing technology means that we cannot rest on our laurels and simply deliver platforms and capability to meet today’s challenges and threats.

Just as important, is future proofing our capability programs by allowing for evolution. Take the Attack Class submarines for example. Submarine number 12 will be a different vessel to the first of class. The program of continuous ship building will allow for an evolution in the technology and the weapons systems, the countermeasures and the materials. This is what continuous shipbuilding is all about. For example, we are already involved in a spiral development partnership for the BYG-1 combat system and Mk48 torpedo. Continuous shipbuilding will enable us to extend that methodology to communications, sensor and platform systems.

I am very confident that Australia as a nation — and the Royal Australian Navy — can rise to these challenges. Why do I say that?  Because we are already doing so. I’m sure it is absolutely no news to this audience when I say, in the past we have had one or two issues with our Collins Class submarines. But it might surprise you to know that these days the Collins are beating world’s best practice in terms of availability, and are continuing to deliver a potent and unique capability to the government and to our nation. This is now the case because we’ve learned and applied critical lessons in submarine sustainment and developed some scar tissue along the way for many people. We recognised problems and we went through a thorough process to rectify them.

We have learnt from our shipbuilding projects too. The Air Warfare Destroyer project started six years after we finished building the ANZAC frigates. Even a gap of a few years, meant that we had lost much of the skills and expertise developed during the frigate build. As a result, we ran into schedule and cost issues with the AWDs. But we turned that around. The Government instituted a Reform program in late 2015 that saw the insertion of Spanish shipbuilding management expertise into the shipyard. Overall, shipyard productivity improved more than 30-percent from Ship 2 to Ship 3. It was in the trades’ work where the greatest efficiencies were found. Structural steel fabrication and electrical cable installation improved by around 50-percent. Painting by almost 70-percent.

The AWD project is back on track. Two ships have already been commissioned into service, and the third will be delivered and commissioned next year. All who have seen them will all agree that they are a magnificent vessel. We also learned more about the workforce needed to transition to new classes of ship. We cannot afford to stop deployments or operations to transition to new capabilities, so the Navy workforce will need to grow. Having learned those lessons, we now have the opportunity to apply them to all our projects. The lessons will set the scene for naval shipbuilding in Australia, and they demonstrate industry’s fundamental input to capability. Over the past decade or so, we have learnt many lessons. We are now embedding these lessons in our thinking, our strategies and also our delivery.

Ladies and gentlemen in conclusion, the Royal Australian Navy has been an integral part of the nation it has served with great distinction for over a century.

It is now another challenging phase of its history, but one that it is poised to embrace for Australia’s long-term strategic advantage and also our national interest. sWe are rebuilding our fleet and transforming our sea power to ensure a potent capability for whatever challenges this century brings our nation.

Thank you.

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