What would an Australian sovereign submarine capability look like?
29 Jul 2022|

After the cancellation of the Attack-class submarine program in favour of nuclear-powered boats (SSNs), Australia’s new government must urgently consider the $100-billion-plus question of what a sovereign capability should look like.

Assuming that ‘sovereign’ means Australian control over its submarines, ‘control’ needs to be considered in terms of both military and industrial capacity.

Australia will need full national control over the tasking and operations of its submarines with the expectation that they’ll be employed within broad strategic agreements with the US and UK.

Australia can be confident in its SSNs’ operational capability only if it can evaluate them in its own environment, with other elements of the joint force. The 2018 defence industrial capability plan recognised the need for sovereign testing, evaluation, certification and systems assurance. In practice, much of that will be done by the Defence Department rather than industry. Defence will need to maximise its ability to test and evaluate our SSNs while optimising the corresponding abilities of the boats’ parent nation.

Australia must be able to sustain the SSN fleet throughout its life to ensure availability and control. Most of that work will need to be done by Australian industry. In-country sustainment must encompass all systems, including the platform, onboard management systems, weapon systems, combat systems (including sensors) and communications. Access to intellectual property will be essential.

Significant investment in Australian industry will be required to build this capability. The propulsion system is a special case; minimal work is likely to be needed—or able to be done—in Australia, and there will be almost complete reliance on the US or UK. Even with the other systems, Australia will never be fully independent. The limited size of the Australian fleet and of local industry, and the range and complexity of the systems, means there will be ongoing reliance on the partner’s supply chain. That said, facilities, spares and expertise in Australia will help support our partners’ submarines in the Indo-Pacific.

Australia’s experience with the US combat system in the Collins-class submarine demonstrates the opportunities. The combat system, a variant of the AN/BYG-1 used in the Virginia-class submarine, is being developed by the US in partnership with Australia, and by all accounts it has served us well. Australia is also helping to further develop the Mk-48 torpedo. It’s unclear how much these partnerships benefit local industry, though they have delivered clear capability benefits. To maximise Australian control of its SSNs and industry opportunities, these partnerships should be extended across all systems. In the weapons area, that will need to be conducted in conjunction with Defence’s sovereign guided weapons and explosive ordnance enterprise.

If we acquire an existing US or UK submarine, what access to design capability could we achieve? Would we want to make modifications to the design, given that it could make our boats different from the broader submarine fleet with all the costs and risks that would entail? It would be more realistic to take part in collaborative development as part of future upgrades.

And is the aim to build complete submarines and all their systems, or to assemble them from pre-configured hull sections, as General Dynamics Electric Boat does in Groton, Connecticut? One argument to assemble submarines in Australia is that it would enhance our sustainment capabilities and perhaps take pressure off US or UK assembly yards. Italy and Japan have done this in the F-35 joint strike fighter program with national final assembly and checkout facilities. Any build capability beyond that should be based on a value-for-money assessment that considers the potential broader benefits across Defence and industry and the overall alliance SSN capability.

To get a sense of what a sovereign submarine capability could look like, it’s instructive to examine our air combat capability. Australia has long accepted that it can’t afford a ‘sovereign’ air combat capability. Governments have accepted the trade-offs necessary to achieve an affordable, high-end capability that’s sustained in Australia; is interoperable with our allies’ systems; and has significant industry involvement in production, sustainment and follow-on development.

Defence estimates that by 2023, 50 Australian companies will have been awarded around $2.7 billion in F-35 contracts. That’s expected to grow to around $5.3 billion by 2038 and has been achieved in a best-value environment where local companies compete for the work without charging a premium to do it here. Generally, Australian industry is a second-source supplier, which adds capacity and resilience to the overall program. Estimating the number of jobs created is much harder. While Defence considers a peak as high as 5,000, a more conservative estimate is around 1,500.

A similar approach to a collaborative SSN enterprise could deliver even larger benefits to Australian industry, noting that the submarine project is around five times the value of Australia’s F-35 program. While neither the US’s nor the UK’s SSN project has been established as a collaborative arrangement, it’s possible for such an arrangement to succeed.

Australia would be the only non-US or non-UK member, so it wouldn’t be competing against any other non-US or non-UK partner. In the case of the Virginia-class submarine, Australian contributions are already enabled by our inclusion in the US’s national technological and industrial base.

US production will be enduring and would provide Australian industry with ongoing opportunities. If Australia’s contributions are essential to sustainment, that workshare will be even greater. An additional amount could be expected if something like the Japanese or Italian F-35 facility were established, and there’s already been significant investment in infrastructure in South Australia’s Osborne Naval Shipyard. Additional industry benefits will accrue if Australia builds major hull sections.

Much work would be required to embed Australian industry in existing nuclear submarine supply chains, probably as second-source suppliers. But it’s likely to be much more useful and cost-effective than trying to build a separate supply chain for the relatively small number of Australian SSNs. By focusing industrial capability in the areas where the US and UK supply chains face constraints, even if that requires considerable investment, Australia could achieve a good industry outcome while enhancing alliance production capacity and supply-chain resilience. Enhancing the alliance SSN build capability could potentially speed up delivery of Australia’s boats, reducing the risk of a capability gap and the need to buy or build an interim boat.

To boost defence industry capability while contributing to the alliance in a cost-effective way,  Australia could invest more in basing and operational support suitable for the alliance fleet. Most of that money would be spent in Australia. Consideration could also be given to domestic construction of one or more submarine tenders, like the 45-year-old USS Frank Cable that recently visited Australia. That would complement efforts to establish a sovereign naval shipbuilding enterprise, develop understanding of nuclear submarine support and add quickly to the capacity, mobility and flexibility of Australian and allied submarines in the Indo-Pacific.

Rather than focusing on an Australian ‘sovereign’ submarine capability and the associated price, schedule and capability costs and risks, we should focus our investment on enhancing overall alliance submarine capability while building up our defence industry in a cost-effective way.