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Opinion: Australia prides itself on maintaining a small but technologically advanced and well-maintained force; however, the return of “great power competition” and the potential for kinetic conflict with a peer adversary highlight how brittle the nation’s defence materiel stockpiles are, necessitating a serious rethink, explains Todd Newett.
While this is a logical focus for Australia’s defence strategy given our small population plus high costs, as well as the limited national resources allocated to defence, it also means that the ADF is relatively “thin”.
Currently, Australia has 10 major surface combatant ships, six submarines, just under 100 combat aircraft and about 60 main battle tanks. The loss of even one ship or submarine or a handful of aircraft or tanks would significantly degrade Australia’s defence capabilities.
It is not inconceivable that Australia could lose the bulk of its surface combatant ships and combat aircraft in the opening days of a major peer-to-peer conflict. Given the increased geopolitical risks in our region identified in the 2020 Strategic Defence Update, the possibility of Australia becoming involved in a major conflict without significant notice needs to be taken seriously.
The sudden loss of significant numbers of ships, aircraft and/or armoured vehicles would be disastrous for the country as we would find it extremely difficult to replace those losses. Australia currently does not build submarines, combat aircraft or heavy armoured vehicles locally. We do build surface combatants, but each ship takes several years to build.
In the event of a major conflict, it is by no means certain that we would be able to replace these losses from our allies overseas in a timely manner either. If such a conflict occurred, it is likely that other countries would prioritise the build-up and replenishment of their own forces rather than assisting Australia, meaning that we may not be able to take advantage of our allies’ industrial capacity.
There is also the risk that Australia’s lines of communication may be disrupted, making it difficult for shipments to arrive in Australia anyway.
A reasonably cost-effective way of “thickening” the ADF somewhat would be establishing a strategic reserve of deactivated ships, aircraft, vehicles and other equipment. This strategic reserve would be built-up opportunistically as the ADF retires equipment from active service from now on. Fortunately, the ADF is upgrading a wide variety of platforms over the next few years, which would provide opportunities to make a start to this strategic reserve. Upcoming examples of platforms to be retired include the Navy’s Anzac Class frigates, the Air Force’s F/A-18F Super Hornets, and the Army’s ASLAVs and M113s.
The strategic reserve would work by accepting platforms and equipment into storage. Platforms in storage would be maintained at a level which would enable reactivation in a reasonable time frame, say 90 days. Weapons and sensitive equipment would be stored and maintained alongside the platforms they belong to.
Consideration would be given to munitions, spare parts and fuel requirements these platforms would need if reactivated. If funding allows, some upgrades may be provided to these inactive platforms from time to time. These storage facilities would be located in strategic “rear” areas of Australia, such as South Australia, Victoria or Tasmania, or near existing local industry centres if this proximity would lower maintenance costs and/or speed up reactivation time.
Transferring surplus platforms into the new strategic reserve should be the default option for any ships, aircraft or vehicles moving out of active service, barring any geopolitical imperative necessitating that they go elsewhere (examples include sending vehicles to Ukraine or materiel to equip our regional neighbours). Standards for assessing obsolescence should be difficult to attain.
The overriding principle should be based on this question: “If this platform was reactivated, would the capability it provides be better than nothing?” This principle is based on the fact that the strategic reserve is designed to replace losses in a timely manner that would otherwise go unreplaced.
This change in thinking would represent a significant change in procurement thinking for Defence. Instead of selling outgoing platforms to partially offset the cost of new incoming platforms, Defence would not only forego the income from the sales but also incur additional costs from storing and maintaining additional platforms.
However, the income from selling older platforms is often minimal. Take for example the recent replacement of the F/A-18s with the F-35s. Twenty-five of these aircraft were sold to Canada but following failed attempts to sell the remaining aircraft to a US defence company or donate them to Ukraine, they were ultimately scrapped. This means that out of 71 airframes, 25 were sold and 46 were destroyed.
Total income from the disposal of these airframes was around AU$95 million, roughly equivalent to the unit cost of one F-35A. Retaining 71 fourth-generation airframes (at least some of which) that could have been reactivated many years in the future and provide effective service would have been a better option than a disposal which funded just one F-35.
The ongoing invasion of Ukraine by Russia provides a salient example of the importance of strategic reserves in modern peer-to-peer conflicts. As the invasion went well beyond Russia’s initial planned time frames, neither side could rely on their domestic industries or foreign aid to replace losses and expand their forces. Both sides (but particularly Russia) began to rely on reactivating old Soviet stocks of armoured vehicles and artillery pieces in storage in order to continue the fight.
In the event that the strategic reserve is required, platforms would be reactivated as needed. In the first instance, reactivated platforms would be used for training purposes to assist with force expansion and/or in second-line duties to free up modern platforms for front-line use. In emergencies where modern platforms have been severely attrited and cannot be replaced in the short-term, reactivated platforms could be used in front-line roles.
Under benign geopolitical conditions, strategic reserves of ships, aircraft and vehicles are largely a waste; money is spent maintaining and storing platforms that are unlikely to ever be reactivated while they slowly degrade and become completely obsolete.
However, as outlined in the 2020 Strategic Defence Update, geopolitical tensions mean that Australia must take steps to improve the resilience of the ADF and its ability to fight an intense peer-to-peer conflict that lasts more than a few days. A cost-effective way of helping to achieve this is to establish a strategic reserve of ships, aircraft, vehicles and other equipment which could assist in rapidly expanding forces and/or replacing losses.
Todd Newett is an economist and public policy manager. He was previously a Reservist.
