Australia - Navy restructuring is needed

Australia must have a strategic submarine command to take account of changing circumstances.

This week the government is scheduled to make some fundamental decisions about how the Royal Australian Navy can plan to acquire a fleet of 12 new submarines, likely to become Australia's most expensive defence equipment project. So far, most public commentary has argued the cost benefits of lower-priced European designs or urged that nuclear powered boats be leased from the US. This is the wrong place to start. The first question cabinet should ask is ''can the navy run submarines - any type of submarines''? The answer seems to be: only if the management of the submarine force and its support is radically restructured.

The navy has struggled to keep its Collins class submarines at sea. Insufficient crews, shortages of parts, unreliability of some systems and poor support for some overseas supplied components have made it difficult to sustain and operate the fleet. The experience has been enough to place Collins class sustainment on the government's list of ''projects of concern''.

Operating submarines is demanding and the navy's record is better than most. Canada's four ex-British Upholder class submarines do not yet meet the required standard of operational readiness after 13 years of service; in late 2011 none was in the water. Yet the release before Christmas of Phase 1 of the Coles review raised concerns about the Australian situation to a higher level. Coles's study of Collins class sustainment found a range of deficiencies so severe that they questioned whether Australia has arrangements fit for managing a submarine force.

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What is particularly alarming is that so many of the problems appear to be the same as those that bedeviled the completion of the construction phase of the Collins project in the late 1990s. Then, as now, tension between the navy and the builder derailed project management and complicated problem solving. The same shortages reduced availability, constraining operational expertise. No one had ultimate authority to correct the situation.

These problems were overcome by appointing a task force to draw together all elements of the project and get operational submarines in the water. The team under Admiral Peter Briggs rectified shortcomings in the Collins submarines' performance and allowed delivery of the last of the boats in 2003. Unfortunately, in the decade since, the focus Briggs' group brought to submarine matters has been allowed to dissipate.

Submarine executive positions were dispatched to Western Australia, leaving barely any expertise in Canberra. Submarine sustainment was bundled in when maintenance of ADF equipment was transferred to the Defence Materiel Organisation, producing a situation where spares are sent from Adelaide to Sydney and thence to the submarine base near Fremantle.

Government policy has also contributed. The structures that had fostered the navy's submarine expertise since the 1970s and supported the success of the build phase of the Collins project were dismantled in successive waves of efficiency reviews. The navy's response to recurrent cost cutting saw it losing far too many of its marine engineers.

Today the builder, ASC, which could produce a new submarine a year, takes three years for a major maintenance docking. For its part, the defence bureaucracy stifles the sustainment process with excessive intervention. And the navy does not have command of the situation, with Coles reporting that the review could find no one in overall command of the operation.

The situation needs to be fixed, not just to make effective use of the navy's current submarine force but because of the very reasons that the government wishes to spend tens of billions of taxpayer dollars on an even larger force for the future.

Australia's strategic circumstances are changing fundamentally. From the beginnings of European settlement, Australians have looked to a supreme power (British naval superiority then the US superpower status) to guarantee security in their Asia-Pacific isolation. The 21st century will see this comfort fade.

China, soon the world's largest economy, will become a major military power, challenging American primacy in cyberspace, space and north-east Asia. The US, mired in debt (mostly to China) and with an underperforming economy, will reduce defence spending. Its current size will keep the US as the predominant global power for some time but its security options may become less certain. Already, the invasions of Afghanistan and Iraq have demonstrated the limits of US military power and lost public support for its use. American security decisions may become increasingly difficult as the century progresses, with outcomes perhaps not always to Australia's advantage.

In a less predictable future, increasingly flexible Australia security planning seems required, with the ADF maximising an independent capacity to support policy. Submarines may be the only means of bringing military pressure to bear in some future circumstances that may be very different from those of today. Hence they are seen as a strategic asset in future military options.

An Australian submarine industry that can both maintain and modernise submarines is the basis of implementing this strategy and changes are being made to improve submarine sustainability. The navy has created a post of Director General Submarine Capability. It's likely that the Coles enquiry will instigate further improvements. But, as the enquiry itself asks, why should these steps be any more successful than past initiatives?

There is no answer. Yet, when it comes to consider the future submarine project cabinet will be contemplating an undertaking stretching into the second half of the century when existing arrangements have been unable to support submarine operations effectively for less than a decade.

The project cannot be implemented unless the submarine force is supported by a self-sustaining structure with a focus on submarines stretching beyond 2050.

This is a challenge for cabinet, since the scope of submarine sustainment goes beyond the powers of the ADF and Defence. Control of ASC lies with the Department of Finance and Coles found that this arrangement was one ''in which the exercise of ownership of elements of the design often presents … difficulties''.

Only a cabinet directive can change this situation and ensure that all elements of the submarine enterprise are focused on effective submarine operations.

Australia needs to copy other nations, particularly the US, where strategic forces are organised into strategic commands. There is a general suspicion of creating public empires because they can become self-aggrandising - but that is exactly what the Australian submarine force needs behind it. Its problems have been repetitious and predictable, its technical demands are challenging and the lack of focus of the past decade has cost heavily in dollars and lost military potential.

Cabinet should mandate that an Australian strategic submarine command be created. This single command would develop the expertise to manage all aspects of the submarine force from acquisition, through sustainment to development of future potential, to ensure the effectiveness of whatever the submarine force may look like in 2050.

Cabinet need not delay decision until the creation of a submarine strategic command. The future submarine project has suffered too many delays already.

However, it can mandate that such a command be established before final source selection contracts are awarded. While carrying no inevitability, this will be enough of a bone for Treasury and Finance to chew over before binding decisions are reached.

Instead of arguing about what type of future submarine is appropriate, the first step of cabinet should be putting in place the arrangements for their proper management.