At the heart of the Albanese government’s navy overhaul is a fundamental risk assessment: Australia does not face the prospect of a major conflict in the Indo-Pacific by the end of the decade. Or if such a conflict does erupt, it will be fine for the Australian navy to sit on the sidelines.
That’s because despite headline-grabbing promises to double the navy’s fleet of warships, the fine print of the announcement is less attractive. In the short term, the navy’s already meagre surface fleet is shrinking.
A previous plan to extend the life of the current fleet of eight Anzac-class frigates is being scrapped to save money. The oldest of these warships, HMAS Anzac, will never sail again and will soon be harvested for spare parts. Another frigate, HMAS Arunta, is due to go out of service in 2026. That’s two warships down before any new vessels are scheduled to arrive.
Defence Minister Richard Marles says this is the biggest naval overhaul since World War II.Credit: Nick Moir
This is a big gamble given the government has repeatedly said that the nation faces its most dangerous strategic circumstances since World War II. Chinese President Xi Jinping has instructed the People’s Liberation Army to be capable of capturing the self-governing island of Taiwan by 2027, a move that would probably draw China into a war with Australia’s most important ally: the United States.
Fewer Anzac-class frigates mean Australia will be less able to participate in freedom-of-navigation and other training exercises in the region in coming years despite China’s increasing assertiveness in the South China Sea.
If things turn ugly in the mid-2040s, though, the government promises that the navy will have a fleet brimming with missile-laden ships equipped to defend the continent and promote stability in the region.
By that time, according to the government, the navy will have added three new types of warships to its arsenal: six Hunter-class frigates, up to 11 general purpose frigates and six “optionally crewed” vessels.
One doesn’t have to be a cynic to wonder whether such grand dreams will ever become a reality. Major defence projects have had a long tendency to run over budget, behind schedule and be overtaken by technological developments and changed strategic circumstances.
The troubled Hunter-class frigate program, pared back in this iteration, is a perfect example of all three.
If the government’s overhaul runs perfectly to plan, it will not just be an anomaly but a history-defying miracle. Especially given the navy is already busy with the massive undertaking of converting to nuclear-powered submarines under the AUKUS pact.
The government has also failed to explain the strategic rationale for betting big on surface ships when the war in Ukraine and Houthi aggression in the Red Sea have shown such vessels to be increasingly vulnerable to cheap drone and missile attacks.
Experts such as Hugh White say we would be better off investing in our own stocks of drones and missiles, preferably dropped on ships from the sky.
Defence Minister Richard Marles, however, deserves credit for three key aspects of the shake-up.
Firstly, he has found more money for defence: $1.7 billion over the budget forward estimates and $11 billion over a decade. Marles has been under fire from military experts and the defence industry for failing to match his rhetoric with cash, and there has been persistent speculation that he has been “rolled” in Cabinet’s expenditure review committee by Foreign Minister Penny Wong and other colleagues. Defence spending is set to rise to 2.4 per cent of gross domestic product by the early 2030s, a significant rise from Labor’s election pledge of 2.1 per cent.
Secondly, Marles is shattering the expectation that the navy’s ships must be built in Australia and tinkered with to make them uniquely Australian. While committing to continuous shipbuilding in Perth and Adelaide, the government says it will buy the first three general purpose frigates “off the shelf” from overseas. Crucially, a mature ship design will also be selected. This will cut down on risk and allow the ships to enter the water sooner.
Third, the navy is finally embracing the possibilities of autonomous systems rather than hulking vessels that can require crews of more than 100 sailors. The big surprise in Tuesday’s announcement was the government’s plan to acquire six US Navy “drone boats” that do not require sailors on board to operate. Such boats are still in a developmental phase, but it is good the government is thinking about the technology of the future rather than the past.
The government has laid out an ambitious plan for the navy, one that looks impressive on paper. Whether it can be implemented in the real world, with all its complexities, will determine whether the overhaul sinks or swims.
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