Future submarine: informed debate needed.

An unhelpful and regrettably uninformed contribution to the debate about Australia’s future submarine capability, and indeed about the current Collins Class submarines, was made last week by a senior official who ought to know better, and upon whom we ought to be able to rely for public utterances underpinned by careful research and analysis.

In Australia’s mining boom: what’s the problem?, an address to The Melbourne Institute and The Australian Economic and Social Outlook Conference, 30 June 2011, Productivity Commission Chairman Gary Banks had this to say, in a section of his address which canvassed areas which might contribute to fiscal consolidation:

But no doubt there is more low-hanging fruit waiting to be picked. For example, the case for Australia spending $36 billion or so on another dozen homemade submarines, when imported alternatives could be purchased for a fraction of the cost (and risk) has never been adequately explained publicly — notwithstanding the generally acknowledged failure of the Collins Class precedent. The whole area of defence procurement seems ripe for a thorough independent review.

While I would agree with Mr Banks about the need to review defence procurement, his comments about the availability from an overseas supplier of an acceptable future submarine are remarkably ill-informed.  He appears to believe that a submarine is a commodity, like sand or cement – as long as the article travels under the label “submarine” it will do the job.

In fact a submarine is one of the most complex pieces of military equipment in existence, the design of which involves wicked trade-offs between range, capability and stealth. Because of these trade-offs, submarines are carefully designed for the particular roles they are to perform, with equally careful regard to the geographical environment in which they are to serve.

To put it in a nutshell, European submarines are typically built for short patrols in deep cold water.  Australia needs long range submarines, to operate in warm shallow water.  All other navies which operate long-range submarines operate nuclear fleets, so if we want a long range fleet it is going to have to be purpose designed.

As long ago as 2008 a group of some of the nation’s leading experts on submarine design and operation advised the Government that there is no military off the shelf option which will provide the capabilities which Australia requires, and that this will of necessity be a developmental project. The nearest design which meets Australia’s capability requirements is the Collins Class submarine, and accordingly this represents the lowest risk starting point for the development of a new design for the mid-21st century. 

In addition, there is good reason to believe that the United States will refuse to release certain critical technologies for incorporation into a European designed and/or built submarine, for fear of technology leakage.

This advice of these experts informed the Government’s thinking about the requirements for Australia’s future submarine capability and was reflected in the 2009 Defence White Paper. The case which was made and accepted had nothing to do with “skilled job creation or technological spillovers” as suggested by Mr Banks in his presentation – it was purely and simply a clear case of there being no off the shelf option that goes even close to meeting the need.

As for his claim about “the generally acknowledged failure of the Collins Class precedent”, I know of no-one in the submarine world who thinks that the Collins Class was a failure. The Defence Materiel Organisation has never provided enough budget to maintain them properly, but that is another story.

And just for the record, there was no significant cost over-run with the Collins project, notwithstanding the Howard Government’s beat-up to the contrary, which as far as I can discern was intended to demonstrate that the then Leader of the Opposition, Kym Beazley, had made a foolish decision when, as Defence Minister in the Hawke Government, he had opted to have the submarines built in Australia. Of the $1.7 billion allocated to “fix” the submarines following the 1998 McIntosh-Prescott Report, only $143 was for areas where the submarines failed to meet the requirements of a contract well in excess of $5 billion (in other words, to fix the submarines); $300 million was for changed operational requirements and $727 for technological obsolescence (i.e., technological developments which had taken place during the build).

These remarks by Mr Banks were a reprise of a comment he made in his keynote address to the Annual Forecasting Conference of Australian Business Economists in December 2010 (see here), at which he referred to “submarines costing multiples of equivalent imported models”.  The key word there is “equivalent” – the best advice available to the Government that Mr Banks serves is that there is no equivalent imported model. Who told Mr Banks that there was?

Comments by senior commentators like Mr Banks matter.  His recent remarks were enthusiastically quoted by Australian Financial Review Economics Editor Allan Mitchell in an opinion piece on Wednesday 6 July, and by columnist Brian Toohey in a piece posted on Inside Story on 7 July (see Luxury vessels here). And so the notion that building the submarines is an unnecessary indulgence receives further confirmation in the public mind.

There is a debate to be had about Australia’s future submarine, an important debate – so let’s hope that it can be a better informed debate than it seems to be at the moment.

Note: The information cited above about the budget allocations for completion of the Collins Class project was drawn from Peter Yule and Derek Woolner, The Collins Class Submarine Story: Steel, Spies and Spin, Cambridge University Press, 2008, p. 324.