An Israeli solution may offer the best value-for-money for the integrated air-and-missile defence (IAMD) capability that Australia urgently needs.
The Australian Defence Force and Australian civilian infrastructure are facing a plethora of advanced air and missile threats, including fast, hard-to-intercept ones such as ballistic missiles, hypersonic boost-glide missiles and now weapons that reach orbit before descending.
China’s DF-27 ballistic missile has a range of 5,000 to 8,000 km, and its H-20 stealth bomber, still in development, will have a range exceeding 10,000 km, implying a radius of more than 5,000 km. These distances are enough to directly threaten Australia, so it’s no wonder that the 2023 Defence Strategic Review determined that the ADF must urgently field an IAMD capability.
This would consist of batteries of interceptor missiles, launchers, radars and control vehicles, all placed for protection of priority targets and knitted together by an information network that passes target data and commands.
The ADF needs an effective IAMD capability on a moderate budget. US systems like THAAD and PAC-3 are advanced and effective but arguably too expensive for the ADF, which would require an estimated 20 to 30 batteries.
This article compares Israeli systems against those offered by the United States, Australia’s preferred source for advanced military equipment. European countries are also potential suppliers but their IAMD systems are not reviewed in this analysis.
Here are four criteria that a value-for-money IAMD solution for the ADF should meet:
—The seller should be allied or at least friendly and have no close ties with China, Russia or Iran. The US and Israel both tick this box.
—The seller must agree to Australian manufacturing of the interceptors, which would require transferring intellectual property and providing help in mobilising Australian industry. Israeli interceptors are jointly manufactured with the US and the US already allows its interceptors to be manufactured by other countries.
—The seller must also offer a suite of systems to defend against threats approaching from outside and entirely inside the atmosphere. Outside-the-atmosphere threats include intercontinental and intermediate range ballistic missiles plus warheads that descend from orbit. The latter, called fractional orbit bombardment systems, offer shorter warning time for the defender. Medium- to high-altitude threats within the atmosphere include hypersonic gliders, hypersonic cruise missiles, supersonic cruise missiles, aircraft and subsonic cruise missiles. Low-altitude threats within the atmosphere again include cruise missiles and aircraft.
—IAMD systems for the ADF must also have an affordable costs per battery and per interceptor round. The value-for-money standard for batteries may be US$1 billion or less. For interceptors, it may be US$6 million or less per round for outside-the-atmosphere threats, US$2 million or less for medium- and high-altitude threats, and US$100,000 or less for low-altitude threats. These standards are based on the cost of world-leading US IAMD systems.
For outside-the-atmosphere threats, the US offers Thaad and Israel offers Arrow 3. For medium- to high-altitude threats within the atmosphere, US PAC-3 MSE competes against the Israeli David’s Sling. For low-altitude threats, the US offers Nasams and Israel offers Iron Dome.
While American and Israeli IAMD systems are designed to handle similar threats, they diverge in price. Thaad costs US$1 billion per battery and US$12.7 million per interceptor; Israel’s Arrow 3 costs US$170 million per battery and US$3 million per interceptor. Similarly, PAC-3 costs US$1 billion per battery and around US$5 million per PAC-3 MSE interceptor versus the Israeli David’s Sling at US$330 million per battery and US$1 million per interceptor. Nasams is also more expensive at around US$90 million per battery and US$1 million per Amraam interceptor versus Iron Dome at around US$100 million per battery and US$50,000 per interceptor.
An affordable cost per shot is arguably more important than the cost per battery because in any high-intensity war the ADF might expend thousands of interceptors.
An affordable cost per shot is also essential to tip the cost-exchange ratio in the ADF’s favour. If parrying an attack costs less than making one, the strike becomes uneconomic for the attacker. For example, a reasonable estimate for the cost of a DF-26 is US$21 million, and interception of such ballistic missiles, which come in very fast, typically requires shooting two interceptors at once. If they are Thaads, the intercept cost is US$25.4 million, and China can happily know that, while it may expend a ballistic missile that fails to hit a target, Australia will have expended greater value in intercepting it. But if the interceptors are Arrow 3s (and at least one of them hits), the defence cost is US$6 million and China is on the losing side of the transaction.
The US and Israel arguably make the world’s most advanced combat-proven systems for IAMD. Israel’s Iron Dome, David’s Sling and Arrow 3 interceptors are jointly manufactured in Israel and the US, yet Israeli systems are significantly cheaper per battery and per shot while remaining highly effective against advanced threats.
If the government for political reasons did not want to buy from Israel, it could buy David’s Sling and Iron Dome systems from Raytheon, which also makes them.
The inadequacy of Australia’s defence funding and the urgency of its need for IAMD capability together heighten the need for excellent value for money. Israeli IAMD systems seem to offer it.
