Minister for Defence – Opinion Editorial – Reply to Hugh White, The Age

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The Hon Kevin Andrews MP

Minister for Defence

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20 August 2015

Hugh White claims that the Government’s plan to invest in appropriately capable maritime forces is a mistake and part of a cynical vote buying exercise. This couldn’t be further from the truth. As the Chief of Navy said on 4 August 2015, "This (continuous shipbuilding plan) provides certainty for not just the naval shipbuilding side of things but it also provides certainty for planning, not just within Navy, but within the Australian Defence Force".

His concerns appear to be threefold: that the Government will be building ships here that could be bought much cheaper overseas; that the management of the projects will follow the same course as the troubled Air Warfare Destroyer program; and that spending money on warships is irrelevant to Australia’s key operational priorities. Let me respond to each of these claims, one by one.

When it comes to making decisions on Defence capability, the needs of the Australian Defence Force must – and will always – come first. The forthcoming Defence White Paper will set out an integrated investment programme that is underpinned by a force structure review. Given this, the Government will acquire Defence capability that supports ADF requirements first.

Australian industry has a very significant role to play in this process. However, the only way Australia can continue to have a naval ship building industry is if the industry is properly structured to drive efficiencies and improve productivity and reduce the domestic build premium. A key factor in previous poor productivity in the Australian industry has been the limited and stop-start demand for shipbuilding work which has significantly and adversely impacted productivity. That’s why the Government's shipbuilding plan is based on a continuous build strategy of major and minor naval surface vessels to ensure the most efficient and effective mechanism for Australian shipbuilding.

Moreover, the Government has adopted a set of robust principles to drive a productive shipbuilding industry. This will include preferring mature designs that can be built in Australian shipyards, limiting the amount of design changes for 'unique' Australian requirements, developing a close relationship between designer and builder, contracting to ensure the designer has incentives to make the shipbuilder succeed, and having an Australian shipbuilder take overall responsibility for the ship class.

The Government also knows that addressing the serious cost overruns, delays and productivity problems affecting the Air Warfare Destroyer programme is essential to restore public confidence in Australian naval shipbuilding and ensure future projects deliver world-class capabilities for the Defence Force and value for taxpayers.

Building on significant improvements made through the recent interim phase of reforms, the Government is acting decisively to reform the AWD programme. By the end of October 2015 substantial additional shipbuilding management expertise will be inserted into the AWD programme.

The Government will also undertake further reform of ASC to ensure Australian shipbuilding is best structured to support a continuous build programme and future naval projects are delivered on time and on budget.

But Professor White’s major concern appears to be questioning whether we need the Future Frigate in the first place.

Australia’s national security and economy rely on the unencumbered use of the sea. Seventy per cent of Australia’s exported goods and services, by value, travel by sea, an export trade worth more than $220 billion in 2012-13. We are a maritime nation and we need maritime security, and maritime security requires a robust surface force capability.

The ANZAC class frigates were originally designed as a low intensity patrol frigate but their role has expanded over time. They have been significantly upgraded and have become the ‘workhorse’ for the Navy, operating across a range of peacetime and military roles. This required successive investments in new capabilities for the ANZAC fleet to keep pace with their expanding roles. At a maximum displacement of 3,900 tonnes, the ships are approaching their weight and stability limits, restricting any further upgrades.

In light of this, the Future Frigates are expected to face more demanding operational requirements and will need to be more capable than the ANZAC class. They will be required to conduct a range of missions, from low-level constabulary roles through to regional conflict, but with a particular focus on anti-submarine warfare and theatre-level anti-submarine operations. By 2030 about half of the world’s submarines will be in Australia’s broader strategic region.

Operating along Australia’s coastline, northern approaches and throughout the Indo-Pacific will require the Future Frigate to have the range, endurance, sea-keeping qualities, survivability and weapons load-out to support prolonged operations throughout our substantial region and, when called to do so, globally.

The nature of the threat environment will require the vessels to be equipped with a range of offensive, defensive and self-protection systems. They need to be of adequate displacement to facilitate a growth path for future weapons system and sensors. That’s one of the reasons why there is a global trend among most navies towards larger-sized frigates.

Upgrading the Royal Australian Navy fleet in this way is the best way to reinforce Australia’s strategic edge in our region and the wider global maritime environment.

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