Defining the end goal for the Naval Shipbuilding Plan

With $90 billion worth of naval shipbuilding programs, the Royal Australian Navy and naval shipbuilding industry would appear to be in an enviable position, however, the long lead time on key programs and ramp up in delivery poses challenges for industry.

Meanwhile, as a maritime nation, Australia is dependent on unlimited access to the ocean – as the regional paradigm changes, there is greater strain on the Navy to protect the national interests and naval assets like the Canberra Class amphibious warfare ships, combined with concerns about the continuity of Australia's sovereign naval shipbuilding industry in between major programs. 

Now, for the first time in the nation's history, Australia's prosperity, security and way of life is intrinsically linked to the ambition, stability and direction of its Indo-Pacific neighbours. Guaranteeing this requires the nation to find a balance between the expeditionary and interventionist focused 'Forward Defence' and the continental defence focused 'Defence of Australia' doctrines to counter the high and low intensity threats to the nation's security and interests.

Australia's focus on the Indo-Pacific region makes a great deal of sense, particularly given the positioning of key regional economic and strategic partners across what has been referred to as the 'Arc of Instability', which plays host to a range of traditional state and asymmetric economic and political challenges, however the growth of China and India and smaller nations surrounding them, combined with the importance of the Indo-Pacific as a pillar of the national, regional and global economy, now requires renewed Australian focus.

While both the Defence Industrial Capability Plan and the $95 billion Naval Shipbuilding Plan set out how the government is delivering on the commitment to build a strong, sustainable and innovative Australian naval shipbuilding industry, stating: "The goal of the Naval Shipbuilding Plan is to ensure that the regeneration of the Royal Australian Navy over the coming decades will ensure both a cost-effective solution for the government provide Navy the assured capability to fight and win. The National Naval Shipbuilding Office has been established to implement the Naval Shipbuilding Plan."

The thinly defined concepts of 'sovereign' and 'sustainable' as they relate to Australia's naval shipbuilding leave many unanswered questions, as does the ever-present spectre of the infamous 'valleys of death' between major projects that severely impact the capability, sustainability and cost of delivering major naval platforms. 

Supporting Australia's naval shipbuilding capacity 

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Contemporary naval shipbuilding expands beyond the traditional manufacturing side of the process and requires extensive and costly research and development processes throughout the concept development and life of the platforms to enhance capability and sustainability over the life of service – something often overlooked in existing policy. 

Accordingly, supporting Australia's domestic ability to design warships, designed by both government and the private sector, with a focus on providing through-life support for both domestic and export customers in a manner similar to the model implemented by BAE Systems through the $35 billion Hunter Class program is an existing model of success for Australian industry and government to use as a reference point for developing future policy. 

Further supporting this is the requirement to begin developing and implementing a National Strategic Industry Act to support the development of the nation's naval shipbuilding industry and broader reindustrialisation of the Australian economy using defence industry as a best-of-practice model to draw examples from. 

Supporting the development of Australia's naval shipbuilding industry also requires the legislative power of government to counter-balance industry development policies of allied, yet still competitor nations like South Korea – which leverages the industrial development policies of export oriented industrialisation (EOI) to develop its economy into a major economic and modern, advanced manufacturing powerhouse.  

Korea's industry development is driven by a range of government incentives for industry, including corporate tax incentives, employment incentives and payroll tax incentives. As a result, in order to develop Australia's own naval shipbuilding industry, similar innovative and adaptive policy making is essential to developing a competitive domestic naval shipbuilding industry. 

Defining Australia's role in the domestic and allied supply chain

Australia has a number of naval shipyards beyond those located at Osborne and Henderson, such as the Williamstown facility just outside of Melbourne and the former-Forgacs naval shipyard located in Newcastle, which were responsible for the fit out of the Canberra Class and construction of the Anzac and Adelaide Class frigates, respectively.

These existing facilities, combined with the model established by the temporary BAE Systems Australia acquisition of ASC Shipbuilding throughout the life of the $35 billion Hunter Class construction phase, provides an ideal model for the Australian government to collaborate with local or international naval warship designers and builders to develop specialised 'warship centres of excellence'.

Developing these centres of excellence across the full spectrum of naval shipbuilding operations, including research and development, design, production and through-life sustainment can leverage the policy levers used to develop other national naval shipbuilding facilities and integration within global supply chains and programs to support the development and rehabilitation of local naval shipbuilding capabilities with a focus on capitalising on the growing demand for warships in the Indo-Pacific and Middle East in particular. 

Additionally, this international collaboration also provides further avenues for Australian shipyards to increase domestic unit acquisition of platforms like the Hobart Class destroyers or the Hunter Class (Type 26 Global Combat Ship) vessels in support of international, allied acquisition programs – namely the British and Canadian acquisition of the Type 26 vessels and the potential US acquisition of a variant of the Australian Hobart Class as part of the FFG[X] program, which will see up to 20 vessels procured. 

Australia's 'value add' proposition fits in the edge of acquisition and operational cycle of naval acquisition – namely in the research and development and design phases, with production costs impacting the bottom line due to small economies of scale (which have been discussed at length here), and through life support, modernisation and sustainment adding additional value throughout the life of warship and submarine development and acquisition programs.

Diversifying Australia's naval shipbuilding capabilities beyond focusing on Australia's own shipbuilding requirements is a necessity should the broader naval shipbuilding plan be successful – targeting growing export demands in the region and Middle East, combined with international industry collaboration and partnerships, is central to this.

Developing and implementing a cohesive, innovative and long-term vision for Australia's sovereign defence industry capability can also serve as the basis for developing, and in some cases redeveloping, a robust, advanced manufacturing economy taking advantage of Australia's unrivalled resource wealth – supporting the broader national security and interests in the Indo-Pacific. 

So, let's ask the question, what is the long-term goal for Australia's naval shipbuilding industry and capability, what does it look like and what does it involve? How can Australian industry work collaboratively with government beyond the 2030s? Let us know your thoughts and ideas supporting the next stages of development for Australia's sovereign defence capability in the comments section below, or get in touch with This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..