September 15, 2015
Australia expected to buy Only Eight future submarines
Prime Minister Malcolm Turnbull (now sworn in) to date has had few views and little knowledge of defence issues. But he learns quickly. So his views and policies on future submarines are unpredictable (Photo courtesy Herald Sun)
Kevin Andrews, Defence Minister for 9 months. His submarine views very much depended on Abbott's views. Andrews may leave office by September 21, 2015, when a new ministry is likely to be announced.
Christopher Pyne may become next Defence Minister. He was considered an Abbott loyalist and has no real record on defence issues. Pyne is a Federal MP from Adelaide which may be his main qualification for Defence, with uncertain implications for submarine issues. (Photo courtesy Courier Mail).
It is becoming more certain that Australia now aims to buy only 8 submarines (not 12). Hence the upfront purchase price of $20 Billion is likely to drop to a lower amount.
The official announcement of 8 submarines is expected to take place in the 2015 Defence White Paper that may be published in November this year (2015).
That 2015 White Paper has, to date, been drafted under an Abbott Government. It is unknown whether submarine numbers will change under the new Malcolm Turnbull Government. Unlike the outgoing Abbott Prime Minister Turnbull is expected to rely less on a defence power-base for his image. However Turnbull may rate highly the impact of submarine building on regional infrastructure development and therefore votes prior to Australia next election (perhaps in August 2016).
Turnbull may just continue Abbott's naval building policies or perhaps revise down submarine numbers to 6 (+ an option of 2 more, maybe).
News that the Australian Government wants 8 is unpopular with Australia's depressed shipbuilding industry (especially in Adelaide, Williamstown (Victoria) and Western Australia (mainly south of Perth)). Eight means less Government spending for the upfront price and downstream maintenance costs of the future submarines.
Australia’s likely decision to only build 8 submarines not 12 is due to:
- the requirement for 12 submarines being uncosted and minimally justified in the 2009 White Paper (large PDF, see page 70, section 9.3) drawn up under the Rudd Government.
- the Australian government’s depleted revenue base. A major reason is less company tax from Australia's mining (especially iron), energy (especially coal) and manufacturing (car factories closing down) industries. The declining mining and energy industries are largely tied to Chinese demand (which is growing at a lower rate since the beginning of 2015).
- the competing need for defence funding for Australia's growing commitment to fighting in the Middle East. This includes Syrian and Iraq air commitments and Iraq land commitments.
- the competition for naval funds for surface shipbuilding. This includes the Australian Government's intention, over the next 20 years, to build:
= 9 x Future Frigates (which I estimate will weigh around 6,000 tons) under SEA 5000, and
= 15-20 x "Corvettes" (which may average 1,500 tons) under SEA 1180 .
The Corvettes (a term Abbott preferred) have also been called Offshore Patrol Vessels (OPVs) and Offshore Combatant Vessel (OCVs).
So a less defence minded Turnbull, further decline in Australia's revenue base and change in Defence Minister (the new one may be Christopher Pyne, a Federal MP for Adelaide) make submarine numbers unpredictable. But I think 8 or 6 future submarines is likely.
BACKGROUND ON NUMBERS
Historically the Australian Navy has asked for more submarines than it finally receives. As I advised in my On Line Opinion article Future submarine choices: more than a one horse race of December 11, 2014 I advised:
- for the UK built Oberon submarines (in RAN service 1967-1999) numbers for Australia shrank from 8 to 6 .
- numbers proposed for the Collins (in commission 1996 - ) shrank from 10, to 8, to 6.
The Collins’ formula of 8 = 6 + (an option of 2 that were never ordered) may eventually be repeated for the future submarine.
Posted by Peter Coates