Introduction
5.1
This chapter will, by drawing on the material in the previous chapters, provide final conclusions and committee comment.
5.2
The inquiry has morphed into something complete different following the Australia-United Kingdom-United States (AUKUS) announcement and the cancellation of the Attack-class submarines. The whole premise of the Naval Shipbuilding Plan, and thus this inquiry, has changed. Specifically, the risk to the continuous build and the questions hanging over Australian sovereignty of its submarine fleet have given a new dimension to this inquiry.
Impact of the COVID—19 pandemic on the inquiry
5.3
The committee commenced this inquiry with the intention of visiting as many relevant facilities and institutions as possible. Unfortunately, along with everyone else, the committee’s work was curtailed and disrupted by the COVID—19 pandemic. A planned program of visits to facilities such as the Australian Submarine Corporation shipyards at Osbourne in South Australia, had to be shelved and then, eventually, cancelled entirely. Closed borders, severely truncated airlines schedules and the risk of carrying infection to other parts of Australia made the cancellation of our inter-state public hearing program inevitable. The committee regrets this outcome.
5.4
In particular, the committee would have liked to explore in greater detail workforce issues such as training and continued employment at the relevant locations. This is certainly one aspect of the inquiry which has been affected by the pandemic restrictions and is now of even greater importance given the expected maintenance issues regarding the future nuclear submarines.
5.5
That said, the committee was able to conduct a series of public hearings in Canberra with interested parties and the evidence gathered provided a very useful insight into the status of the naval shipbuilding program.
The Naval Shipbuilding Plan—All at Sea
Status of the overall Plan
5.6
The review of the three vessel classes that together comprise the Naval Shipbuilding Plan conducted in the previous chapters shows the extent to which the Plan is now seriously adrift—possibly even sunk. The Attack-class submarines have been cancelled with their replacements yet to be decided. The Hunter-class frigates are in serious trouble, and it remains unclear if that project will proceed or, like the Attack-class, also be cancelled. And while the Offshore Patrol Vessels (OPVs) is the best performing of the three classes that make up the Plan they, too, are now suffering delays—albeit manageable ones.
5.7
The committee also notes that at the Senate Estimates of October 2021, the Department of Defence revealed that plans for the local construction of a Pacific Support Vessel had been scrapped in favour of an overseas purchase, which was not publicly announced by the Australian Government.
5.8
The Asia Pacific Defence Reporter noted:
The decision is a breach of the commitment made in 2018 by the government that the vessel would be built in Australia. The decision will disappoint the local shipbuilding industry, coming on top of the cancelled Attack-class submarine project and delays to the Hunter-class frigates.
5.9
It is still unclear whether the Morrison Government has made any further decisions to purchase vessels “off the shelf” or from foreign sources rather than build them in Australia.
The continuous build and the ‘Valley of Death’
5.10
The cancellation of the twelve Attack-class boats has placed a large question mark above the continuous build designed to avoid the ‘Valley of Death’. These boats were the backbone of the continuous build aspect of the Naval Shipbuilding Plan. Until the status of the AUKUS nuclear submarines and their build location is finalised there can be no way the committee can judge if a continuous build can be sustained, and the Naval Shipbuilding Plan can be continued, even in a modified form.
5.11
It is important that the Australian Government provide as much clarity as soon as possible to Australian industry and re-issue a revised shipbuilding plan at the earliest possible opportunity.
5.12
The Australian Government re-issue a revised Naval Shipbuilding Plan at the earliest possible opportunity.
The Question of Sovereignty
5.13
The Second Interim Report extensively covered the questions now hanging over the sovereignty aspect of the shipbuilding plan. Given that the nuclear submarines will be dependent on US and UK technology and support, a serious question now hangs over the sovereignty aspect of the shipbuilding plan. As the 18-month review phase has yet to be completed, the committee and the defence and strategic policy community remain in the dark as to what obligations Australia will have to those other countries regarding the provision of the nuclear technology for those vessels. This should be clarified as soon as possible.
5.14
The Australian Government clarify, at the earliest possible opportunity, Australia’s obligations regarding the exchange of nuclear technology from the US and UK and how this affects Australian sovereignty.
Committee comment
5.15
The Naval Shipbuilding Plan is now all at sea. The failed decision to acquire the Attack-class and the increasingly questionable decision to go with the Hunter-class frigates has resulted in a severely disrupted shipbuilding plan. The committee believes that the Australian Government and the Department of Defence have, through their poor decision-making, taken arms against a sea of troubles.
5.16
Disappointingly, this is not a unique occurrence. Greg Sheridan recently observed:
Every one of our major defence programs is in disarray or scheduled to deliver capability so far into the future that it’s in the realm of science fiction or delivers assets that have no weapons on them ……. or is completely irrelevant to the maritime military challenge we face.
5.17
Until the AUKUS submarine procurement and construction details are finalised there can be no revised shipbuilding plan. As that task is not expected to be complete before March 2023, this means yet another delay to an already delayed build program. The net result is that, according to Marcus Hellyer from the Australian Strategic Policy Institute: ‘the RAN’s entire warfighting capability is at risk’.
Defence accountability and transparency
5.18
In the previously tabled interim reports, the committee covered extensively the Department of Defence’s sub-standard performance with respect to accountability and transparency. The committee will not labour the point by providing yet another dossier of disappointments.
5.19
Nonetheless, from what the committee has seen it is more than apparent that Defence needs to raise its standards with regard to the information it provides parliamentary committees. With an annual budget of nearly $50 billion—a figure that is expected to increase in coming years—the Department needs to be more transparent and accountable to the Australian public about how wisely their money is being spent.
Final comments
5.20
The naval shipbuilding program is a multi-decade, multi-billion dollar endeavour. The ordering, construction and completion of these vessels will occupy Defence planners, shipbuilders and government ministers for many years to come. Moreover, they will be financed by the Australian taxpayer for many years to come. This is now particularly true since the AUKUS announcement.
5.21
Accordingly, the naval shipbuilding program will also require ongoing scrutiny by all the relevant government and state agencies—including the Australian Parliament. As the 46th Parliament has come to an end, the committee recommends that the new Parliament re-establish this inquiry so as to keep oversight on these important, long-standing and very expensive naval acquisitions.
5.22
Moreover, as many Members of the House of Representatives as well as Senators have an abiding interest in national security and Defence policy, this committee recommends the Parliament consider establishing a new Joint Standing Committee specifically dedicated to the AUKUS submarine acquisition so that the Parliament can have ongoing scrutiny of this extraordinary project.
5.23
The Senate re-refers the Australia’s sovereign naval shipbuilding capability inquiry to the Senate Economics References Committee or the Senate Foreign Affairs, Defence and Trade References Committee in the 47th Parliament.
5.24
That the Parliament consider establishing a Joint Select Committee on AUKUS in the 47th Parliament to examine in detail the progress of the nuclear submarines acquisition and other related matters. The Terms of Reference should also include strategic, diplomatic and financial considerations of the AUKUS arrangements.
Senator Anthony Chisholm
Chair
Labor Senator for Queensland