Op-Ed: We All Lose if We Buy Submarines Off The Shelf
(Source: The Australian; published July 5, 2010)
In 1990 it fell to me as a lieutenant colonel in Headquarters Special Forces to co-ordinate Special Forces capability needs for the vessel.

I was impressed. Here was a bold and significant defence project that pushed us towards the 21st century. We had taken a leap of faith.

Such endeavours do not unfold without trials and challenges. So it was with the Collins Class submarines. There were problems but in the end we have a first-class capability.

The Gillard government must now ensure we build on this success with the 12 new submarines envisaged in the SEA 1000 project that forms part of the 2009 defence white paper.

Much is riding on this project for the Rann government in South Australia. At the recent election, state Labor promised the people of the state the submarines would be worth $30 billion.

Yet according to the recent Australian Strategic Policy Institute Strategic Insight by Sean Costello and Andrew Davies, the project could be worth as little as $9bn if we buy a less capable off-the-shelf submarine from an overseas supplier. Costello and Davies estimate locally designed and built submarines could be worth up to $36bn.

There are already signs the federal government is getting cold feet and looking to the soft options.

Is this because the money and the surplus we once enjoyed has been spent many times over by the government? Or is it that after a series of recent bungles the government has become risk averse?

In recent defence estimates, the opposition spokesman on defence, Senator David Johnston, heard from senior defence officials that an off-the-shelf purchase of submarines is under consideration. What is not clear is whether the federal government may be planning to emulate the model chosen for the Landing Helicopter Dock ships, hulls for which have been sourced from Spain and will be constructed overseas.

In a recent ASPI special report, economist Henry Ergas argued in favour of off-the-shelf buys from overseas. Ergas dismissed the benefits of Australian design and build, which include capability and infrastructure development, self-reliance in time of conflict, and workforce and taxation benefits to broader economic growth.

Sooner or later, Australia needs to stand up in areas other than mining and primary production, and with a manufacturing sector under challenge from emerging economies, the pathway to success is through science, innovation and entrepreneurship. If European nations can establish and maintain first-class shipbuilding design capabilities, why can't Australia? The first thing Australia needs from its 12 new submarines is a war-fighting capability.

But the second thing we need from the SEA 1000 project is a good old-fashioned dose of nation building. How could an Australian government commit so many billions of the taxpayer’s dollars to such a project without maximising the benefits across the Australian economy for the long term?

The expensive part of modern warships is the smart technology on board and it is here the SEA 1000 project may prove to be the foundation on which a smart naval ship superhighway could be built, right here. We must ensure the Defence Science and Technology Organisation, our universities and Australian industry are fully engaged with this project and leverage opportunities for growth from it.

This has particular implications for ASC in Adelaide and for companies in other states that form part of the consortium to build vessels.

It makes sound strategic sense that we further develop our collaboration with the US on naval ship design because that is where the science and technology originates, particularly for warfighting systems, which are the expensive part of any build. It also deals with security of information best managed on a nation-to-nation basis. A good start would be to look beyond the defence white paper to the third generation of submarines.

We last built a Collins Class submarine in Australia in 2001 and the first of the SEA 1000s will roll off the line in about 2022. The 21-year gap has been unfortunate. We should roll out the SEA 1000 submarines over a period that enables third-generation submarines to be built as a follow-on from the last of the 12 SEA 1000 vessels. In this way we will provide "deal flow" for industry and a sustainable future.

If the government wimps out by failing to invest in designing and building our own submarine and buys off the shelf, we all lose. We may partner with an overseas designer, but this is an opportunity to be bold. It is an opportunity for nation building. It is a test of our resolve as a nation to think big.

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