We know what’s in, but what’s out? Assessing the reprioritisations and the ‘cuts’ of the IIP and NDS (Part 2)

Australia’s future naval capabilities is set to be defined by two distinct, yet complementary decisions. The first being the acquisition of a nuclear-powered submarine fleet as part of the trilateral AUKUS agreement and the plan as outlined by the government’s response to the Independent Analysis into Navy’s Surface Combatant Fleet.

At the micro-level, both the AUKUS decision and the future surface combatant fleet, outlined in the government’s response, are designed to fill the maritime aspect of deterrence and the nation’s push to shape, deter, and respond to the deteriorating regional geopolitical environment.

Meanwhile, at the macro-level, as an island nation dependent on unmolested access to the regional and global maritime commons, these two decisions will deliver the naval component of “whole-of-nation national defence” and “strategy of denial” as articulated in the nation’s first National Defence Strategy and supporting Integrated Investment Program.

As it relates to this, Deputy Prime Minister and Defence Minister Richard Marles in his speech launching both the 2024 NDS and IIP, stated, “Front and centre is a $53–63 billion commitment over the next 10 years to acquire a nuclear‑powered submarine capability under the banner of AUKUS ... A nuclear‑powered submarine capability represents the biggest leap in Australia’s military capability since the establishment of the Royal Australian Navy. More than any other capability, this platform will give an adversary pause for thought and hold their assets at risk further from our shores.”

Going further, Marles added, “In addition, $51–69 billion of investment will build and support the Navy’s future surface combatant fleet and continuous naval shipbuilding ... We are a maritime trading island nation. Having the most capable Navy in our history will be at the heart of our projection and, our strategy of denial.”

In order to fund this transformational recapitalisation of the Royal Australian Navy, it will be subject to the same “reprioritisation” strategy outlined by the Deputy Prime Minister, like its sister services, with a stated $22.5 billion over the forward estimates, and $72.8 billion over the decade.

So what does this mean for Navy and how does it compare to the similar plans and programs of the recent past?

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The elephant in the room – Australia’s shift to nuclear-powered submarines and future undersea warfare capabilities

First and foremost, Australia’s announcement in September 2021 that it would be developing a nuclear-powered, conventionally-armed submarine fleet, scrapping the $100 billion Attack Class submarine, is a major departure from the plans outlined in the 2020 Defence Strategic Update (DSU) and 2020 Force Structure Plan (FSP) and their own foundational documents, the 2016 Integrated Investment Program and 2016 Defence white paper.

It should be noted that as planned, Australia will operate “three Virginia Class submarines to be acquired from the United States, with an option to seek approval for a subsequent acquisition of an additional two Virginia Class submarines if required”, reducing the capability gap between the retirement of Australia’s conventionally-powered Collins Class submarines and the entry into service of Australia’s first SSN-AUKUS submarine.

To support this acquisition, the government announced it would invest $53–63 billion over the coming decade, with the development of supporting infrastructure, workforce, and nuclear industry in-country described as an “uplift” that is “is unprecedented and will be a whole‑of‑nation undertaking”.

For comparison, the 2020 DSU and 2020 FSP detailed that the “out-turned” cost associated with the acquisition of the now defunct Attack Class acquisition was $89.7 billion in 2019–20 Mid-Year Economic and Fiscal Outlook (MYEFO) dollars, the DSU and FSP allocating a total of $75 billion worth of investment over the next-decade for expanding Australia’s maritime capabilities.

Meanwhile, the 2016 Integrated Investment Program and 2016 Defence white paper earmarked a quarter of the proposed budget for the 2016 IIP (which saw a total investment of $195 billion to 2025–26) worth $48.75 billion for the development of the nation’s next generation of undersea warfare capabilities.

In the meantime, Australia’s ageing Collins Class submarines will undergo the planned life-of-type-extension (LOTE) first announced in the 2016 IIP to ensure that the fleet “remains a potent capability through the rest of its life”, worth between $3.5–6 billion (now $4–5 billion as of the 2024 IIP), as articulated in the 2020 DSU and 2020 FPS ahead of the planned transition to the now-cancelled Attack Class submarine fleet.

It should also be noted that the plans for Australia’s Collins Class fleet have been long-lead time, “known known” commitments articulated in the preceding plans from 2016 and arguably further back than that to the 2000 Defence white paper.

Each of the respective documents, beginning with the 2016 IIP and 2016 Defence white paper saw a growing emphasis on the development and integration of uncrewed and autonomous underwater systems as mechanism for adding critical mass and removing humans from harm’s way in the undersea environment.

However, it wasn’t until the 2020 DSU and FSP that the shift and prioritisation of uncrewed and autonomous underwater systems really took off, with the FSP stating, ”to further safeguard Australia’s undersea capability, the government will also invest in an integrated undersea surveillance system (including exploration of optionally crewed and/or uncrewed surface systems and uncrewed undersea systems), an undersea signature management range, and expanded undersea warfare facilities and infrastructure”.

Bringing us finally to the 2024 IIP, which earmarked $5.2–7.2 billion for the “development and acquisition of subsea warfare capabilities and new autonomous and uncrewed maritime vehicles, including through AUKUS Pillar II – Advanced Capabilities” which will complement the nation’s fleet of Collins, Virginia, and eventually SSN-AUKUS submarines.

We have already seen progress on this priority, with Defence Industry Minister Pat Conroy recently announcing the selection of Anduril’s Ghost Shark as Mission 0 for the Advanced Strategic Capabilities Accelerator, which, in some ways, will serve as the “proof-of-concept” for the development of expendable, “low-cost” systems designed to minimise human operators in harm’s way.

Perhaps the most concerning development to come from the 2024 IIP is the government’s shift to an entirely uncrewed and autonomous minehunting and mine countermeasures capability, marking a major departure from not only established Australian methodology and doctrine, but globally.

Cutting edge, yes, fraught with risk, undoubtedly, and also sees a formal cancellation of the future mine warfare and hydrographic vessel program, worth $3.3–5 billion, according to the 2020 FSP, with Minister Conroy explaining to ABC’s Greg Jennett, “One is the previous government had a plan to build mine sweepers to hunt mines. We’re investing in autonomous undersea vessels to do the same thing. We think that’s a more effective and safer way of delivering that effect.”

But Navy is more than just the existing and planned submarine and undersea warfare capabilities.

The future of the surface fleet – what is new, what is business as usual?

By now, people will be sick of hearing about the future of the Royal Australian Navy’s surface fleet (and frankly, I don’t blame you), but it is important to understand how the new Integrated Investment Program and the proposed fleet structure stacks up, what is new and what is just a rehash of previous plans?

First things first though, it is important to begin with the findings of the Independent Analysis into Navy’s Surface Combatant Fleet and the government’s response to the findings.

Deputy Prime Minister Marles confirmed at the launch of the 2024 National Defence Strategy and Integrated Investment Program that “$51–69 billion of investment will build and support the Navy’s future surface combatant fleet and continuous naval shipbuilding. The six Hunter Class frigates will be the most capable anti-submarine warfare frigates in the world.

“The 11 general-purpose frigates will ultimately see the size of our surface combatant fleet double to the largest fleet Australia will have operated since the Second World War. Together with the six large optionally crewed surface vessels, our Navy’s vertical launch missile capacity will more than triple from around 200 cells to over 700 cells," the Deputy Prime Minister explained.

Sounds pretty good, right? Hard to argue with the rhetoric surrounding the development of the “largest” surface combatant fleet since the Second World War, again, the Navy is more than just the frigates and destroyers that make up the bulk of the surface fleet, as any contemporary navy needs to be well rounded and capable of sustained operations.

To get a sense of the evolution of Australia’s naval capability plans, we first have to look more closely at the 2009 Defence white paper, which in many ways served as the foundational document and informed the subsequent white papers, strategic updates, integrated investment programs, and force structure plans.

In particular, the 2009 white paper called for the development of “eight new, larger frigates optimised for anti-submarine warfare, to replace the eight Anzac frigates”, “12 new, non-nuclear and long-range submarines to be ‘assembled’ in South Australia, replacing the existing six Collins Class submarines” and a “a 10,000–15,000-tonne strategic sealift ship”.

This nominal surface fleet would be enhanced by the three, then in construction Hobart Class destroyers, along with the two Canberra Class, as well as a replacement for HMAS Success, which would ultimately become the Supply Class replenishment vessels now in service with the Navy.

If all of that sounds vaguely familiar, it is because in essence, it is the same core naval force structure advocated in each of the subsequent plans outlined by government of both sides. In the case of the 2016 IIP and 2016 Defence white paper, Navy committed to a slight increase in the Hunter Class with nine, rather than eight (initially projected to be worth $35–$45.6 billion), along with the 12 Attack Class submarines (worth approximately $89.7 billion).

Fast forward to the 2020 DSU and 2020 FSP, the government, at the time, earmarked “around $75 billion over the next decade” (to 2030) to enhance the nation’s maritime defence capabilities, with little in the way of major changes to the surface fleet despite increased rhetoric surrounding the deterioration of our geopolitical and strategic circumstances.

Today, in the aftermath of the release of the 2024 NDS and IIP, with government committing “$39–55 billion” to deliver the government’s recent response to the surface fleet review, we see a significant shift in the composition of the surface fleet, at least in terms of the major surface combatants and the littoral sealift capabilities to support Army’s own pivot to become an amphibious force.

In terms of the surface fleet’s current “Tier One” combatants, the Hobart Class, the planned upgrades to the Aegis combat system bringing them up to Baseline 9 standard, are set to continue as planned in the 2020 DSU and FSP, with only $1.5 billion approved for the planned upgrades and future follow on capability assurance programs totalling $6.5–8.5 billion (of which $5–7 billion are currently unapproved, but planned investments).

Meanwhile, the government’s planned scaling back of the Hunter Class frigates, from nine to six, is designed to save money and seemingly to “reprioritise” some of the savings towards the fleet of “at least seven, but optimally 11” general-purpose patrol frigates, with only $2.3 billion approved for the Hunter Class as it stands and $20–30 billion still considered “unapproved planned” investment.

For the general-purpose frigate fleet, however, Navy is yet to receive any formally approved funding, with $7–10 billion still considered “unapproved planned” investment. The same goes for the $400–500 million “unapproved planned” investment for the six large optionally crewed surface vessels that are “to be delivered in the 2030s” as identified in the government’s response to the surface fleet review.

Meanwhile, as previously mentioned, Navy will also see a “reprioritisation” or a “cut”, depending on how you look at it, with the pivot towards uncrewed and autonomous mine warfare and hydrographic vessels, saving $3.3–5 billion, a sizeable chunk of change, that is for sure.

Navy’s planned, now semi-scrapped Arafura Class offshore patrol vessels (which saw a slash in the program from 12 to six hulls) will serve alongside the existing fleet of evolved Cape Class patrol boats, with further cost savings coming from the decommissioning of HMAS Anzac and HMAS Arunta, respectively, rather than putting the ships through the costly Anzac Midlife Capability Assurance Program (AMCAP).

Additionally, Navy will see the two additional joint sealift and replenishment ships (up from the single ship proposed in the 2009 Defence white paper) – proposed in the 2020 DSU and FSP as part of SEA 2200 worth $4–6 billion – cut from the fleet, with savings being reprioritised to “continued investment in the two Supply Class replenishment oilers and sustainment enhancements to the two Canberra Class landing helicopter docks and HMAS Choules”.

Meanwhile, Fleet Air Arm will continue with the recapitalisation of the anti-submarine warfare helicopter fleet, replacing the troubled MRH-90 Taipans with up to 36 MH-60R Romeo Seahawk helicopters, providing Navy with much needed reliability and criticality, economies of scale to support sustained operations across the “expanded” surface fleet.

Final thoughts

There still remains some significant questions around just how solid the funding commitments are when it comes to government announcements, given that as it stands, only $10 billion in funding had been approved for the surface Navy, with $40–58 billion still very much in the “unapproved planned investment” category, according to the government’s own IIP.

Equally, it has to be asked if the bet we have on a number of as yet unproven technologies (namely moves like the solely autonomous and uncrewed mine countermeasures program and the still-developmental large optionally crewed surface vessels) will ultimately pay off, or have the figures associated and the number of ships given by government are enough.

Additionally major concerns about the capacity of this future fleet to maintain sustained combat operations in support of "localised sea control" without a subsequent expansion of the nation's auxiliary support vessels and replenishment vessels, as we're not always going to be able to depend on allied capability and the two Supply class will be stretched.

I have questions about how Navy (as planned) is going to deliver “localised sea control” without sustained indigenous fleet airpower despite the Air Force’s push to embrace “expeditionary air operations” in a contested environment. Finally, I have questions about the make-up of the fleet and whether or not we really are getting the transformational capability we have been promised.

In the next part of this series, I will take a closer look at the Royal Australian Air Force and the future as projected and outlined in the 2024 NDS and IIP and how it compares to previous incarnations of the Integrated Investment Program and respective Defence strategic updates and force structure plans.

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