Pearls and Irritations

Swapping the expensive French conventionally powered submarines for nuclear submarines was the right decision, and it does not have to come at a cost to Australia’s independence.

Australia’s decision to cancel its contract with the French Naval Group for the Attack-class submarine and instead purchase nuclear submarines from either the British or the US has occasioned much criticism here in Australia.

This article responds to these criticisms and makes the case for the purchase of nuclear submarines.

Cancelling the contract with Naval Group

The process that led to the selection of the French submarine was completely flawed. According to the rulebook for tenders a number of competing designs should have been considered first, of which two would be shortlisted to produce a more detailed design with ideally a fixed price tender. No attempt has ever been made to explain the reasons for not following this proper approach.

Instead, Naval won the rights to build Australia’s next generation submarines based only on submission of a concept, not a full design. So, five years later, we still do not have a full design, but the costs have almost doubled, with each Attack-class submarine presently expected to cost two to three times world benchmarks for conventionally powered submarines.

In addition, the risks were enormous because the project entailed a completely new design for a conventional submarine that would be significantly larger than any previous submarine built by anyone, including Naval. Not surprisingly, the delivery dates have now blown out to 2035 (if we are lucky).

Australia should never have entered this contract, but better to quit now than continue throwing more good money after bad.

Future defence strategy

But if not the French Attack submarine, many are asking, “why go nuclear?” To answer that question, however, we first need to consider the nature of possible future threats and the effectiveness of our alliances in response.

The fact is that our region has become more volatile and uncertain. One reason is the emergence of China as a major power, and its determination to restore what it considers to be its past territorial sovereignty. Some have argued that is the limit of China’s ambitions, and that it presents no further threat to Australia or the region unless we go out of our way to provoke it.

But we cannot be sure about that, even if we continue, as we should to seek ways to work with China. As Hugh White said in his book How to Defend Australia:

“It would be a big gamble to assume that China would not contemplate the use of armed force … over issues that Beijing sees as affecting China’s internal stability or challenging the vision of a stable Chinese-led order in East Asia.”

Equally important, and contrary to the conventional wisdom, China has been the biggest economy in the world since 2014 if its GDP is compared to America’s in terms of their purchasing power (as it should be). Furthermore, Treasury projected in 2017 that by the end of this decade China’s GDP will be as much as 77 per cent bigger than America’s. Consistent with its rising economic power, China is also increasing its military capability relative to America’s.

Accordingly, as White concluded in 2019:

“Australia would be very unwise to assume that America will play the role in stabilising Asia and defending Australia that our defence policy still assumes it will”. The risk is too high that short of nuclear Armageddon America would lose. On the other hand, the good news (as White puts it) “is that we probably can defend ourselves independently even from a major Asian power.”

Of course, that doesn’t mean that we want to provoke an attack by China (or anyone else); a point that I will return to later. But just as taking out insurance does not mean that you expect your house to burn down, it is sensible to insure against potential aggression by maintaining sufficient defence capability that you can deter possible aggression by your ability to impose heavy costs on the attacker.

Why a nuclear submarine

Given the nature of potential threats, the defence of Australia will mainly be a maritime defence, dominated by submarines, aircraft, drones, missiles, and satellites. We don’t want to be involved in any more land wars in Asia.

Submarines are therefore critical, and nuclear submarines are much more capable than conventionally powered submarines. A nuclear submarine has a lot more stealth, speed, and ability to project destructive power, and would make any country think again about attacking us.

On the other hand, some have argued that the number of submarines is important, and that if you can buy a lot more conventional submarines for the same amount of money as nuclear, then there is no need to go nuclear.

However, the budget for the proposed French Attack-class submarine was $50 billion at constant prices for 12 submarines which works out at a cost of around $4.5 billion each in today’s prices. By comparison, the cost of the last British Astute submarine is $3 billion.

Australia would have to pay more than $3 billion if it chooses the British submarine, to cover overheads and other setting-up costs. Nevertheless, even allowing handsome provision for overheads and other costs, it is not clear that going nuclear will cost much more.

Another criticism of both the Attack-class submarine and the nuclear alternative is the delivery delay. But the delay for the nuclear submarine is only five years longer than for the conventional submarine, and if we can negotiate an arrangement that enables us to gain access to a nuclear submarine or two in advance then there may be no more delay than with the French.

Whether we bought the French Attack submarine or a nuclear submarine, either way we need to fill the looming submarine capability gap that we are facing in the 2030s. Extending the lives of the Collins submarines is a must, purchasing some more conventionally powered submarines 0ff-the-shelf, so they are available quickly to fill that gap looks inescapable too.

How will AUKUS affect Australia’s independence?

A common criticism of AUKUS is that Australia will have lost its independence. But frankly I find this criticism strange.

The reason we need nuclear submarines is precisely because we must be able to defend Australia on our own. While, on the other hand, without agreeing to AUKUS, we would never have got access to American or British nuclear submarines and been able to mount an independent defence. In addition, AUKUS will allow Australia to collaborate with the UK and US on artificial intelligence, quantum technologies, and additional undersea capabilities, all of which will add to our defence capability.

The key question is whether and by how much AUKUS has reduced our sovereignty and operational independence. According to the available information, AUKUS does not require us to take on any more obligations to provide military support to any other nation in any circumstances. As before, the ANZUS Treaty describes the extent of our alliance with America.

Furthermore, we have been buying military equipment from America for a long time, and often this decision has been influenced by the desire to ensure the interoperability of both nations’ military hardware. This has made sense when we have been fighting side by side.

The irony is that the decision to purchase the very large French Attack submarine could only be justified by the demand that it could undertake extended missions and sit off the coast of China. Its purpose would have been to gather intelligence for the Americans, while it depended upon their support for its security.

But looking ahead another 20 years, it is doubtful whether the Americans will still be maintaining a presence off the coast of China, while our nuclear submarines will be less dependent on American support for their security.

In short, the purchase of nuclear submarines can make us more independent, not less, and it is difficult to see that AUKUS has changed anything significant other than to give Australia access to technologies that were previously unavailable.

How much independence we actually experience in the future is really a matter for us. As Jon Stanford said in his article for Pearls and Irritations, Australia should assert its independence when it feels that is necessary, as the British have done in the past without damaging their access to American technology.

The need to balance hard and soft power

AUKUS does represent an important increase in Australia’s access to hard power based on the most advanced military technology. However, the initial presentation of AUKUS, may have encouraged the view that we wanted to resurrect the Anglosphere.

Any such impression is not helpful in our relations with other countries in our region, and it needs to be corrected promptly. As Paul Keating memorably said, we need to find our security in Asia and not from Asia.

Unfortunately, in recent years Australia has underplayed the importance of soft power through diplomacy and foreign aid, with foreign aid falling by as much as 31 per cent in real terms between 2011 and 2020. This needs to be reversed and quickly, with the aim of ensuring that our neighbours fully understand that Australia acts independently in its own interests and no one else’s.

In particular, more effort needs to be expended in building our relations and supporting our close neighbour, Indonesia. We should ensure that Indonesia appreciates that a well-armed Australia can be a more valued ally.

Equally, Paul Keating is right that if we insist on treating China as an enemy, then it will become one. Instead of unnecessarily provoking China we need to be on the lookout for opportunities to work collaboratively, such as on climate change and China’s application to join the Trans-Pacific Partnership sponsoring free and open trade.

Conclusion

Stopping the enormous waste of money on the French Attack submarine was necessary. But the critics of AUKUS are wrong. Gaining American and British support for Australian nuclear submarines is a welcome breakthrough which provides a critical enhancement of our defence capability and at no real cost to our independence.

Nevertheless, our national security depends equally on us establishing good relations within the region. We need to work harder and be prepared to spend more to improve these relations.

In particular, we must try to work with China, but we also need adequate defence capability as an insurance policy. The two are not incompatible, as China should be the first to acknowledge, given its own increasing military expenditure. Indeed, it is not Australia that is starting an arms race.