JON STANFORD. Australia’s Future Submarine; Part 2 of 3 : Addressing the problems in a second-best world

At the National Press Club in Canberra on 27 September 2017, Hugh White, Professor of Strategic Studies at the ANU, launched an independent report by Insight Economics on Australia’s future submarine (FSM). The report, Australia’s Future Submarine: Getting This Key Capability Right, was commissioned by Gary Johnston, a Sydney businessman and owner of the website, submarinesforaustralia.

This second post (of three) focuses on our thoughts on how to address the major problems with the FSM acquisition.

As stated in Part 1 of this story, the two main dangers in our current situation are that:

  • Australia will have a significant gap in submarine capability, perhaps lasting for over a decade
  • Should the design of the FSM fail or be unaffordable or run too late, we will have no options available for providing a credible submarine capability.

The objectives of our proposed policy approach are to:

  • Take action in the very near future to ensure there will not be a gap in Australia’s submarine capability through the 2030s
  • Provide an insurance policy in the event that the design of the Shortfin Barracuda fails to provide the required capability at an acceptable cost
  • Introduce some contestability into the process
  • In order to provide practical solutions, not require the government to change any existing decisions on the FSM programme.

Avoiding a capability gap

If everything goes according to plan, the first of the FSMs will be delivered in 2033-34. With the Collins class submarines  reaching the end of their lives between 2026 and 2033, even if all goes well, this will leave a capability gap. As a solution to this, we understand that Defence has proposed, a 10-year life extension of Collins that may cost around $15 billion. In our view, there is a significant probability that the first FSM will not be delivered until around 2040. There is also a high probability that the Collins upgrade will incur major problems and at best will not deliver submarines capable of being sent into a high threat environment in the 2030s and beyond. The bottom line is that we do not believe that a Collins class life extension provides an adequate insurance against a capability gap.

There is, therefore, an acute possibility that Australia could have no submarines at all that could responsibly be sent on operations through the 2030s and possibly into the 2040s. In making this judgement we need to remember three things. First, Australia’s strategic environment is growing more threatening and submarines are a critical element in the ADF’s order of battle.  Secondly, half of the world’s submarines, many of them very modern, will be operating in this region by 2035. Thirdly, and as Defence well recognises, the Australian government has a duty of care not to send ADF personnel into harm’s way on obsolete platforms or equipped with inadequate kit.

So if the Collins class life extension is ruled out as a too risky and costly approach to fill the looming capability gap, what is the answer? Clearly we need six new submarines to be delivered between 2028 and 2034, the same timetable as the life extended Collins as proposed by Defence. The only option in that time period is to acquire off-the-shelf submarines, modified to extend their range. Presumably the government would want to build these new modified off-the-shelf (MMOTS) submarines in Adelaide, but as always this should be subject to a value for money criterion as was specified in the 2016 Defence White Paper (and subsequently ignored).

In our report we suggested that only the French Scorpène and the German Type 212 would be suitable contenders, but now we consider the Japanese government should also be invited to propose their latest version of the Soryu class in a three-way competition. The three contenders should be required to provide a detailed project definition study (PDS) and a fixed price tender for building the submarines either in Australia or overseas with construction commencing in 2020.

An enduring problem confronted by the Submarine Force is the very long transits between their base at HMAS Stirling near Fremantle and their areas of operation (AOs) in the waters to our north. The time travelling in transit can account for up to five weeks in total in a single operation. In economists’ terms, this is a major inhibitor of the productivity of the Submarine Force. The length of submarine operations also results in crew fatigue and, because of the cramped space on board, may inhibit recruitment and retention of submarine crews. This is one of the major reasons why Defence has the idée fixé that Australia needs a very large submarine and should not acquire many more and less expensive platforms off the shelf.

For this reason, we also propose the government should acquire a tender ship for the submarines. This would provide accommodation for the crews, medical facilities and the ability to undertake repairs to the submarines and provide routine maintenance. It would also allow the submarines to refuel, re-victual and replenish munitions. Patrols could be reduced to four weeks and, with replacement fly-in, fly-out crews, the Submarine Force would spend more time on station. The tender ship would have the effect of being a force multiplier.

Insurance policy for the Shortfin Barracuda

In the longer term, the new MMOTS submarines plus the tender will provide some competition for the Shortfin Barracuda in terms of deploying submarine capability on station in the most efficient way. The government has contracted with Naval Group for the detailed design of the FSM, but it is not obliged to build it. It may be that the design does not provide sufficient capability consistent with the value for money criterion. In that case, the government could decide to build more of the MMOTS boats.

The 2016 White Paper stated that a review of Australia’s future requirement for submarine capability would be held in the late 2020s. We propose that this review should be brought forward by a few years and consider three options for the future:

  • Build the Shortfin Barracuda as planned; or
  • Do not build the Shortfin Barracuda and continue with a continuous build of the MMOTS submarine, in flights of three incorporating improvements over time; or
  • In the event of a significant deterioration in Australia’s strategic circumstances, begin the lengthy process of acquiring nuclear submarines, while constructing a total of twelve MMOTS submarines.

The final post in this series will consider the reaction to our report and respond to some of the criticisms.

Jon Stanford is a Director of Insight Economics and was the principal author of its submarine report, available at: and

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2 Responses to JON STANFORD. Australia’s Future Submarine; Part 2 of 3 : Addressing the problems in a second-best world

  1. Julian says:

    The comment below was attached to an earlier post by the same author, but it seems appropriate to include it here also.
    Block quote:
    I am indebted to the present author and to others who have had the wisdom and fortitude to query the many “interests” involved in the proposed new submarine project.

    For reasons best known to itself, the government, the RAN, the ADF and others, will apparent brook no opposition to this project. As usual (one might say), the Australian public have had no say – nor will they be asked for any input into this hugely expensive project.

    So, if it be permissible or pertinent to ask: does Australia really need submarines, then, can the type of threats – be they historical, actual or potential that are said to be best dealt with by the use of submarines, be adequately dealt with by other means?

    Short answer: probably not. But maybe, just maybe there could be alternatives.

    Consider the following comment (in support): “There is no current substitute for the capabilities that submarines deliver in maritime warfare, and maritime warfare capabilities are important for Australia…While there are claims about the increasing vulnerability of submarines to detection, these must be balanced against the realities of the environment.” [1]


    As readers will know, the background to this topic is that on 26 April, 2016 the Australian government committed to spending $A50 billion on a fleet of 12 new submarines, contracted to French company DCNS – with the subs to be built in South Australia.

    Almost from the time of that announcement different opinions began to be heard – whether for example, autonomous subs might either be more prevalent or effective. “There is great technological and political risk in the Future Submarine Project. I don’t think robot submarines can replace crewed submarines but they can augment them and, for some missions, shift risk from vital human crews to more expendable machines.” [2]


    On the same day as the government’s announcement, one writer stated: “The decision embraces a long-discredited protectionist industry policy that will add billions of dollars to the cost.” The same writer later noted that: “Australia’s new submarines won’t be fully operational until long after their size becomes a liability.” The writer also noted, correctly in my view: “If there is some other advantage in buying submarines that will be double the size of proven off-the-shelf options, the massive extra cost needs to be assessed against the marginal increment, if any, in overall capability.” [3]


    Then there was Terry Barnes, policy consultant, and former senior Howard government adviser who was impertinent enough to ask almost straight away (27 April, 2016) whether new subs were in fact needed at all, and was quickly to the point: “With little in the way of strategic justification, it’s hard to avoid the conclusion that the $50 billion submarines project is actually about bailing out South Australia as a tight election nears…”.

    Mr. Barnes then summarized as follows: “While Australia is an island with a 36,000km littoral coastline, and we depend on Indian and Pacific Ocean sea-lanes for our trade, we have an effective smallish but powerful surface fleet of frigates, patrol boats and other large specialized vessels, including two new large amphibious support ships…

    …Beyond these existing units, an extensive building programme of new Future Frigates and two classes of patrol boats vessels was announced by Turnbull and Payne just last week. All our current and future large surface vessels have range and reach across our Pacific and Indian Ocean access routes, enabling the RAN to work independently or in concert with America and other allies…What do submarines add?” [4]


    Another writer (equally impertinently perhaps) raised as an example the financial black hole that is the Joint Strike Fighter project and queried whether the sub project might just go the same way. [5] This article contains a splendidly realized cartoon on a subject close to the heart of many a politician.


    Mr. Barnes had earlier made the point that: “Furthermore, the [2016] White Paper, the Government, a Labor Opposition equally committed to new submarines, the RAN and ADF, defence industries and the South Australian government haven’t really justified to the lay Australian public why any submarines are needed at all, let alone 12 of them.”

    In January, 2013 Nic Stuart, then a columnist with the Canberra Times wrote an article which subsequently appeared in The Strategist, with the following title: “The unmentionable question: do we really need a submarine?” Mr. Stuart concluded that we did not, and part of his summary is worth repeating here: “The question shouldn’t be ‘what submarine will we buy’? Instead, go back to fundamentals. Ask yourself: ‘What do we need to achieve within a limited budget’?

    …A submarine can do a great deal and it would be a terrific capability to possess. But ask yourself, what, specifically, do we need a submarine for that couldn’t be achieved in other, more cost effective ways. With perhaps the single exception of firing nuclear missiles (which we’re not getting, anyway), my guess any achievements would be dwarfed beside their enormous cost and drain on resources…And we’re buying more problems.” [6]


    As a member of the public I submit the following suggestion: perhaps it is time for the present Government (and the Opposition) to grow a back-bone and say to the RAN – and others: NO !
    End block quote.


    The idea of a tender ship to allow a smaller submarine to operate in the northern areas of the South China Sea is irrational. It would make it easier to do something we should not be doing.



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