On Thursday morning Australians woke to perhaps the most significant defence capability news in recent memory: the Royal Australian Navy will acquire nuclear powered submarines under a new deal between Australia, the UK and the US.
The deal, known as AUKUS, was announced by US President Joe Biden, British PM Boris Johnson and PM Scott Morrison and also includes sharing information and expertise in AI, quantum technology, underwater systems, hypersonics and long-range strike capabilities, including Tomahawk cruise missiles for the Hobart class destroyers.
The repercussions are profound. First, the existing $90 billion Future Submarine contract with Naval Group – the largest military acquisition in Australian history – has been scrapped. In a statement, the company said the news was a 'major disappointment' and that it would work through the consequences with the Commonwealth.
Second, Australia's Collins class submarines will now likely need to stay in the water longer than anticipated, raising questions over whether Australia's naval power is sufficient to bridge the gap with the nuclear-powered boats. At least the full cycle docking (FCD) debate is now put to rest - South Australian Premier Steven Marshall confirmed on Thursday that it will take place in South Australia.
Third, the Australian public will now cast judgement on whether the security reasons for acquiring nuclear powered submarines outweigh this country's historical rejection of nuclear power.
Fourth, the acquisition signals that diesel powered submarines are now deemed insufficient for the military contingencies Australia expects to face, meaning those contingencies are changing much faster than anticipated even a year ago when the Force Structure Plan and Defence Strategic Update were released.
Leaving aside the geopolitical ramifications (not least what Canada and New Zealand think of all this) we're left with a virtually endless list of questions on the capability itself and how it will be delivered.
Most obviously, Defence has said at least eight subs will be built in Adelaide. When exactly will these be delivered and how will they be crewed? RAN says it has a long-term plan for growing the submarine workforce (currently just over 900 people) and that plans for crewing the 12 Attack class boats will translate over to the new submarines. Yet it still faces a major recruiting challenge.
The workforce issue for industry will also remain significant – will the delay lead to a new valley of death for submarine building and expertise in Australia? The PM has outlined a plan to redistribute talent, but confidence will be shaken nonetheless.
"The Government will actively work with industry to ensure the people and skills developed under the existing program are not lost to the Government’s Naval Shipbuilding Enterprise as we establish a new program to support the delivery of nuclear-powered submarines to the Navy," PM Morrison said. "The Government will partner with our Australian-owned sovereign shipbuilder, ASC, to manage and implement a new Sovereign Shipbuilding Talent Pool.
"The Sovereign Shipbuilding Talent Pool will re-deploy the existing shipbuilding workforce throughout current and new shipbuilding programs, while building the nuclear-powered submarine skills that will be crucial for the success of the nuclear-powered submarine program."
Meanwhile, will the Collins class be capable of assuring Australia's security by the time the first nuclear powered boat is delivered? To some extent the burden will be reduced, as AUKUS will also reportedly see US Virginia class submarines operating out of Fleet Base West, but cannot be offset entirely.
The government has said it will not be required to refuel the submarines in their lifetime, but there are still questions around what nuclear infrastructure (if any) is needed in Australia. What will the public tolerate? How will Defence manage nuclear security and technology issues with the UK and the US? Where will the IP and technical expertise come from and how will it be managed?
Then there's the question of the quality of Australia's strategic planning. The decision to abandon the Attack class for nuclear powered boats represents a major (and expensive) failure to anticipate strategic developments and the likelihood of convincing the Americans to share their nuclear secrets, and how those changes impact RAN's operational requirements. The government is now touting the superiority of nuclear submarines – so why did it ever think that diesel boats would be fit for purpose?
Australian defence industry, particularly those that have invested significant time and effort into getting involved in the Sea 1000 program, will now be wondering where this decision leaves them. At the very least, it's hardly a mark of confidence for defence industry or investors if a program as significant as Sea 1000 can be scrapped virtually overnight.
Yet there are no questions on the undertones of this announcement. Fundamentally, the change that prompted this decision is the power that Xi Jinping now exerts over China.
The Australian Government has reportedly offered to brief China on a ministerial level about the new submarines. It knows Beijing will see this as a bold move on the chessboard – one on which India and Japan are also more active than ever, as the first all-leader meeting of the Quadrilateral Security Dialogue is set to take place soon at the White House.
ADM will continue to provide coverage of this announcement over coming weeks and in the October edition of the magazine.