Squeezing every penny: Learning lessons, building expertise and tightening the ‘behind the scenes’ decision making

Few nations truly embraced the post-Cold War concept of a “Peace Dividend” quite like Australia, with now well-documented and major implications on the nation’s capability definition, development and acquisition remaining to this day.

From the old “fitted for but not with” controversy that plagued a range of the Royal Australian Navy’s surface combatants during the mid-to-late-1990s and into the early-2000s through to the repeated delay and politicisation of critical replacement and modernisation programs that have resulted in costly capability gaps, delayed and even cancelled programs.

This reality has impacted not just a single branch of the Australian Defence Force but the entire force in being, with now dramatic consequences as Australia and the Indo-Pacific face a period of increasing competition and instability posing direct and indirect threats to our national security and interests throughout the region.

As a result, we have seen successive Australian governments seek to reinforce the uncomfortable truth that Australia no longer enjoys it’s “10-year warning time” and the degree of security provided by this buffer, yet as has been discussed ad nauseum, with little progress seemingly made.

Just for reference, the first time Australia floated a doubling of the Collins Class replacement fleet was in 2009, as was the plans to build the original nine, now six Hunter Class frigates; however, decisions weren’t made until nearly 10 years later, with subsequent decisions having a dramatic impact on the project costs and capability delivery with significant second and third order affects on the nation’s Defence budget.

The factors have only been compounded by the nation’s pursuit of a fleet of conventionally armed, nuclear-powered submarines under the AUKUS trilateral partnership and the planned acceleration acquisition of a host of advanced capabilities designed to build an “integrated, focused force”.

Indeed, as Minister for Defence Industry and Capability Delivery Pat Conroy said in February 2024, “We’ve made it clear that we expect excellence from the Department of Defence, and that the department is on a journey...

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“We’ve made no secret that we were of the intent on reforming Defence and expect excellence from the department, and I’ve got to say, we’ve got the full support of the Defence leadership as we go through that process,” Minister Conroy said.

In the first part of this short series, we spoke with Dr Marcus Hellyer and Michael Shoebridge of Strategic Analysis Australia, detailing their thoughts about how Australia can maximise the value for money and the capability delivered while mitigating delays to delivery at a time when we can ill afford continued delay and cost blowouts.

But how do we achieve this? Well, former Australian submariner and senator for South Australia Rex Patrick has a few ideas.

Learn the lessons of the past

Many will no doubt be aware of Australia’s tried-and-true history of constantly reinventing the wheel when it comes to developing and acquiring critical Defence capabilities. Indeed, the challenges associated with this emerged as one of the key focal points identified by the government’s 2023 Defence Strategic Review with the government seeking to prioritise viable “off-the-shelf” capabilities where they already exist.

This attempt to deliver 80 per cent of some capability, rather than 100 per cent of nothing isn’t anything new, but it does reflect a broader problem that plagues Australian and, indeed, broader Western defence capability development and acquisition.

Highlighting this, Patrick explained to Defence Connect, “Defence need to dust off and pay regard to the outcomes of the Kinnaird and Mortimer reviews, which placed a requirement of Defence to buy off the shelf. Where it makes sense, the chosen off-the-shelf design should be built here in Australia [e.g. naval shipbuilding]. Local builds serve as a knowledge and skills catalyst for sovereign sustainment.”

This approach serves a number of purposes, with pull-through benefits for the broader national defence industrial base, particularly if our intent is to build a robust, competitive and viable defence industry capable of competing on the world stage, something Patrick hints at, saying, “Australian industry should be supported to provide niche add-ons and upgrades in capability to the proven platform.”

Building on this factor and something that often goes unsaid is Australia’s long-held approach of letting budget drive strategy, not strategy drive budget, particularly since the end of the Cold War and the 1987 Defence of Australia white paper which, in some ways, continues to shape our strategic thinking and the impact of failing to fully deliver the forces proposed in said white paper.

I will cite a prominent example that frequently figures in my thinking, that is the replacement of Australia’s three Perth Class guided missile destroyers and six Adelaide Class guided missile frigates with three, Adelaide-built Hobart Class guided missile destroyers. Now yes, the argument that our threat environment had changed holds; however, you mathematically cannot replace nine ships with three.

This example is emblematic of Australian strategic thinking which has a dramatic impact on the defence industrial base and workforce as Australia often views Defence spending as “nice to have” not a “must have”, thus leaving the nation woefully unprepared and underequipped for the current threat environment.

Patrick added, “Unfortunately, it is the consistent departure from buying off-the-shelf designs that causes the cost and schedule blowouts. Defence depart from the golden rule and then end up in a mess. The taxpayer suffers, as do your servicemen and women.”

Bringing us back to learning the lessons of the past and, where possible, maximising the opportunities provided by off-the-shelf capability design. Patrick added, “Our military leader should not think exclusively in terms of capability. If there are off the shelf frigate designs that go 28 knots, really consider carefully whether the RAN requirement needs to be 30 knots. It goes to the proper trade-off between capability, cost and risk."”

Horses for courses

However, there are other mindset changes that need to take place in order to reform the policies and procedures that shape our capability acquisition and development pipeline, something Patrick is very clear on.

“Every new senior officer that gets sent to CASG thinks they can do better, in terms of project stewardship, than their predecessors. There needs to be an edict from the Defence Minister – any officer, and especially admirals, air marshals and generals, who propose bespoke equipment designs will be discharged. There needs to be an edict from the Prime Minister – any Defence Minister who propose bespoke equipment designs will be removed from the ministry list,” Patrick told Defence Connect.

Going further, Patrick called on Defence to emphasise relevant skills, experience and expertise throughout the capability acquisition life cycle, particularly in the project management environment, put simply, calling for “horses for courses”.

Patrick explained this, saying, “You would not take a really good project manager and assign them a submarine to command. So why would you take a really good submarine captain and assign them a project to run.”

Again, this seems like a pretty common sense approach, yet something that doesn’t seem to translate to practical implementation with potentially devastating consequences.

This brings me back to the comments made by Minister Conroy earlier this year, when he said, “The taxpayers of Australia would expect us to demand the best possible performance from all government departments, but especially the Department of Defence, given the amount of money spent and the critical importance of defending our nation.”

Final thoughts

While we have seen repeated attempts to shift both the narrative and the culture towards both Defence and the acquisition of defence capability in recent years, we still see reluctance to embrace the change. Don’t believe me? Walk the halls of the Avalon, Land Forces or Indo-Pac expos and you will hear it.

So getting this right has never been more critical, as is shifting our national approach of letting our budget drive the strategy, rather than strategy driving budget which will ensure that Australia is capable of defending itself, while also providing significant flow-through benefits as a result of domestic industry development.

This final point ensures that we maximise the Defence budget and its pull through to actual capability fielded by the Australian Defence Force and can have a truly transformative impact on our national security and prosperity at an accelerating pace.

As I have said a number of times before, if both Australian policymakers and the Australian public don’t snap out of the comforting security blanket that is the belief in the “End of History”, the nation will continue to rapidly face an uncomfortable and increasingly dangerous new reality, where we truly are no longer the masters of our own destiny.

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..