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Australia’s navy will get extra warships that are more lethal on a faster timetable to counter the threat posed by a rapidly militarising China under a major review of the surface fleet to be released on Tuesday.
The surface fleet review has warned the Albanese government that current and planned structure of the navy is not up to the task for the risks confronting Australia, and the multi-billion dollar build up is already under cost pressure.
Concept artwork of BAE Systems’ proposed guided missile frigate.
The review and its 18 recommendations will chart a new course for the Australian navy over coming decades, with an emphasis on warships laden with missiles, a likely new class of smaller vessels and the promise of continuous shipbuilding in both Adelaide and Perth.
“Their analysis included an assessment of capability requirements, cost, workforce, schedule, risk and continuous Australian naval shipbuilding,” Deputy Prime Minister Richard Marles said in the foreward to the report.
“The Independent Analysis Team concurred with the [Defence Strategic Review’s] findings that the current and planned surface combatant fleet is not appropriate for the levels of risk we now face and that cost pressures already existed in the program. They also noted that the current surface fleet is the oldest navy has operated in its history.”
The review also backed the government that a program of continuous naval shipbuilding was essential for Australia’s sovereign capability and avoiding a so-called ‘valley of death’ of job losses when projects finish without new ones being ready to replace them.
It is understood the government will agree to boost the number of surface combatants the navy now has – currently the eight ANZAC class frigates and three Hobart class Air Warfare Destroyers – while the new warships will have greater capability and be delivered soon.
However, with the military undermanned across the services, the biggest challenge remains recruiting the extra sailors required to crew both the new warships and larger nuclear-powered submarines.
While much of the attention will be on the pledge of new warships, the review is tipped to kill off the troubled patrol boat project partway through construction, and could signal the retirement of the ageing Anzac class frigates.
The naval review emerged out of last year’s Defence Strategic Review, questioned whether following the planned AUKUS acquisition of nuclear-powered submarines nine new frigates were still needed to conduct anti-submarine warfare, and noted a trend for navies to move towards bigger fleets of smaller warships.
The $45 billion Hunter class frigate project has been beset by delays, design and weight issues and the realisation it was undergunned for a new era of maritime warfare dominated by missiles.
The surface combatant review, helmed by retired US admiral William Hilarides, is expected to recommend the number of frigates be reduced from nine to six.
Instead, the ship’s designer, BAE Systems, may be given the chance to build a guided missile frigate based on the same hull, capable of being fitted with up to 96 vertical launch missile cells (the Hunter has just 32).
Sources have told The Australian Financial Review Chief of Navy Mark Hammond is attracted to the idea of a “common hull” for the naval fleet.
The potential acquisition of the smaller warships – dubbed Tier 2 – has already sparked competition with shipbuilders from Japan, South Korea, Germany, the UK and Spain circling with various corvettes or light frigates.
German shipbuilder TKMS is offering an updated version that has its roots in the Anzac frigate design, Britain’s Babcock is pitching its Arrowhead light frigate, but arguably the most developed bid comes from Spanish shipbuilder Navantia, which is proposing six ships to be built in Perth teamed with local shipbuilders Austal and Civmec.
Sources anticipate the government will terminate the number of patrol boats being built by German shipbuilder Luerssen in Perth at six, half the original order, amid issues with production and design.
Vice Admiral Hammond also admitted at a Senate estimates hearing last week that the oldest ship, HMAS Anzac, was essentially worn out and could be scrapped rather than put through an upgrade to extend its life.
Australian Strategic Policy Institute senior analyst Euan Graham said the naval review risks being an “orphaned document” unless it closely aligns with the upcoming national defence strategy and was matched by budget dollars for its recommendations.
“Given the government’s failure to properly resource the DSR, and the lack of urgency around the release of the fleet review itself, there will inevitably be a lot of scepticism about follow-through, unless funding and timescales are made explicit,” he said.
“From a conceptual perspective, the review should also make clear that the AUKUS submarines will operate in conjunction with a surface fleet that exists not simply to project force, but to escort high-value assets, secure strategic imports and neutralise threats as far from Australia as possible.
“Without seaborne supply, Australia would not function for long in a conflict. Protection against air, submarine and surface threats is not a nice-to-have, but an indispensable naval capability for an island nation – even a continental one.”
Opposition defence spokesman Andrew Hastie said the government had caused uncertainty for the defence industry and South Australia with its review.
“What we’re after is a decision … that’s based in a maritime strategy, which we’re yet to see, that secures our Defence Force and builds a stronger navy,” he said.
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