Australia and the New Build Submarine: Options for the Next Government

By Robbin Laird and Harald Malmgren

Current talks between France and Australia to build a new submarine are facing significant challenges.

If these challenges are not met prior to a new Australian government being elected next year, the next Australian government might well look for new solutions to getting the submarine they need and want in a timely manner.

In 2016, the Australian government announced that it would build a new submarine with the French. The new build submarine would replace the aging six Collins Class submarines with 12 longer range, and more effective “regionally superior submarines,’ to use the language of the Australian government.

This new submarine has never been built before, but would leverage French technology but built in Australia by new innovative production technologies and a 21st century Australian workforce.  Australian and French engineers would work closely together and the new submarine would be operational within the next decade.

The problem is that the agreements to do all of this are not in place and the challenge of putting a complex co-development project in place are proving challenging.  In part this is a question of trust and confidence of the two sides in each other; and neither the French nor the Australians have put together defense projects on this scale of co-develop together.

Recent reports have highlighted that the agreement is providing difficult to finalize.  Since the Australia-French sub project began in the design stage, a new government was elected in France, with a new Defense Minister and new officials within the French procurement agency, the DGA.  The core agreement with Australia remained in limbo within which the core issues of intellectual property rights and other key issues involving the build of the new submarine remained unresolved.

For the Australians, the key issue revolves around the build and the IP involved as well as the ability to continuously build and support the new class of submarines.

They are looking at a co-development project of fundamentally new types of submarines with their partner, through which there would be two-way technology transfer and a long-term commitment to working through the evolution of submarine technology in a very dynamic threat environment.

In addition to a new government coming to power in Paris and now responsible for putting the agreement into place, soon Australia will have a new government.  Parliamentary elections have to be held no later than next Spring.  The current Defense Minister, Christopher Pyne, has been involved with the project from the outset.  As a Parliamentarian from South Australia where the submarine will be built and as the former defense industrial minister, he would clearly like to see an agreement in place prior to a change of government.

But what if it is not?

Are their alternatives to the French solution which the next government might pursue?

From several inputs in both France and Australia, there is a French assumption in play that Australia has no options other than France, and all that France has to do is wait out the process and the current or next Australian government will come around to the inevitable, namely, a submarine negotiated on more classic technology transfer lines, while the Aussies are seeking a wide-ranging co-development process of a next generation submarine.

Australia is looking for a build and support approach which provides a sovereign submarine capability but with a very close-knit operational capability with the U.S. and Japanese navies.  This makes sense of course because the nature of the Chinese challenge is central to the Australia-Japanese-US ASW triangle in the Pacific.

The clearest option for Australia should the French option fail, something which the Australian government clearly is not eager to see, would be to work with Japan and plus up their American options as well.

The Japanese industry has come a long way since the failure to prevail in the earlier competition.

In their failure, they have learned and what they have learned is that they need to commit completely to co-development and a new build in Australia as well.

With the growing focus of Japan on extended perimeter defense and the need to rebuild their defense industrial capability, Australia is the perfect partner.  Both seek ways to have enhanced sovereignty while still working closely with the United States.  Both wish to have hedging options given the political dynamics in the United States.  And both seek to expand their defense industrial capabilities.  Both technological aspirations and political timing of Australia’s growing ties with the U.S. are converging into opportunity for a bold new industrial thrust in Australia.

By working together on submarines, the Japanese and Australians might find other ways to work together on defense systems.

The Australian submarine will have an American combat system.  That is already decided with Lockheed Martin as the key systems integrator.

The Japanese option provides flexibility as well.  The Australians are modernizing the Collins class and have worked out an effective sustainment approach to buy them time, A new build submarine, larger and very upgradeable, could be built in Australia with Japan agreeing to buy some of the new build submarines from Australia as well.

This is something which the Japanese themselves need when they come to replace their current class of submarines, one designed to optimize the defense of the islands of Japan, not to reach out into the expanded defense perimeter of Japan.

In other words, Australia and Japan have very similar strategic requirements for their next submarine force.

The United States Navy would be extensively involved in such a new endeavor.

With the Japanese looking very hard at expanding their regional defense capabilities, Australia remains the most significant partner in such a strategic calculus.

If the French government wants to complete their clear opportunity working with Australia, it would be wise for Paris to take a hard look at the changing dynamics in the Asian Pacific and the emerging ambitions of Australia to be a major player militarily and industrially.

The Abe government in Japan is currently rethinking not only its security role in partnership with the US, but its underlying industrial support capabilities which could be applied more effectively in joint projects with Australia and the US.

Japanese economic relations with Australia, long based on trade and direct investment, are now in a new stage where co-development of new military hardware and software would be in the mutual interests of both nations.

That would also put Australia on the forefront of the global industrial development map, rather simply fork-lifting platforms built elsewhere into Australia.

This story was first published by Breaking Defense on October 5, 2018.