Budget Estimates - Monday 3 June 2013 - Foreign Affairs Defence and Trade Committee
Senator LUDLAM: I have a couple of questions for Navy. I have a couple, firstly, on HMAS Sydney, which I understand is embedded with the US Navy 7th Fleet George Washington carrier strike group. Can you tell us what the command arrangements for the Sydney are in the event of hostilities?
Vice Adm. Griggs : The Sydney is on a training activity with the George Washington strike group. It is under national command, Australian national command. It is only under the tactical control of the strike group commander. There are designated training activities that we have said the ship is to be involved in. That is the only thing that can be directed by the strike group commander for the ship's employment. This was made very, very clear in the discussions and preparations for this. The ship is operating under national rules of engagement, not under any other. The US is very clear that should the Australian government not want to be involved in something, it would not be involved in something. So it is not tying us to the strike group.
Senator LUDLAM: When you say it is undergoing training, is that the entire purpose of that deployment?
Vice Adm. Griggs : It is the primary purpose. What we are preparing for is the introduction into service of the Air Warfare Destroyer. We have not been in what we would call in Navy the area air warfare game since the demise of the DDGs in the late 1990s, early 2000s, so we have to regain that skill. This is in fact the second formal activity. The first one was done in 2011. HMAS Darwin last year did a similar activity during the RIMPAC exercise. We are trying to build our skills to be the air warfare commander in a task group. When we have the LHD, the AWDs, the frigates and our combat support ships steaming along, we really need to regain that skill as an air warfare commander. We are going to have a very capable air warfare platform. That is what we are using these training activities for.
Senator LUDLAM: When you say it is under tactical command-
Vice Adm. Griggs : Tactical control.
Senator LUDLAM: Tactical control-
Vice Adm. Griggs : Sorry, but it is a very distinct-
Senator LUDLAM: I understand. I am happy for you to be specific with your language. What happens in the event that the battle group finds itself very unexpectedly in a hostile situation? You have said the rules of engagement are national rules of engagement.
Vice Adm. Griggs : Well, Senator, every warship on the ocean of every nation has an inherent right of self-defence. That is an international norm. The ship has an inherent right of self-defence.
Senator LUDLAM: But it is not that operational command of the vessel would pass to the US Navy?
Vice Adm. Griggs : No. It is very clear in the arrangement that that is not the case.
Senator LUDLAM: I want to return to the defence white paper on submarines. I do not know whether this would have been addressed already. There are two sets of questions. The first is on the submarine propulsion energy support and integration facility in Australia. That is a land based facility. I wonder what the status of that is since it was announced? What happens next?
Mr King : I will ask the general manager of submarines to join me. We have government approval now to proceed with the future work on the establishment of that facility. I think I recall there is funding of $34 million to start that work.
Senator LUDLAM: Can you tell me what elements of that, if any, will be in Western Australia? Is that still the intention?
Mr King : If there is an element, we are still doing further work on it-it would be a training and support element.
Senator LUDLAM: Where is the main facility proposed to be located?
Mr King : We have not finalised that, but most likely it would be HMAS Stirling.
Senator LUDLAM: So that training element would be at Stirling. Presumably, the larger part of the activity or the establishment of that facility would be somewhere else?
Mr King : If you like, the central part-the part that supports tests, evaluation and production readiness-will be in Adelaide.
Senator LUDLAM: A Victorian component as well?
Mr King : The Victorian component will be in support of research and development.
Senator LUDLAM: Of the $214 million that was announced in May 2012 for the detailed studies and analysis to inform the decision-making around the next generation of submarines, how much of that has been spent? How has it been spent?
Mr King : It is a very small amount spent. I think it is in the order of $19 million.
Senator LUDLAM: And that $19 million worth of evaluation allowed us to make the decision to cast off the off the shelf option for the submarines that was announced just before the budget?
Mr Gould : Yes, it did. Most of the money allocated from the $214 million is yet to be spent. I should point out that the committed figure is about $70 million of that. So we have spent $19 million and committed $70 million. But the work that led up to that decision to do no further work for the time being on the off the shelf options was involved in doing studies into the capability of off the shelf submarines and whether they could actually fulfil the operation, which even the Collins class does at the moment. It was quite clear from that study work that they did not. What the remainder of the money is for is to carry out concept work on the capability that can be expected from a revised and redesigned Collins class or, indeed, what can be achieved in concept work on a new design. So the bulk of the work is actually on that rather than studying what is available from off the shelf submarines.
Senator LUDLAM: Has the government completely given up the option of off the shelf?
Mr Gould : No. We could return to it later if, for whatever reason, the other options turned out to be not executable.
Senator LUDLAM: Where in your flow chart is that decision point?
Mr Gould : I think we could take that decision probably as late as 2016, something like that, and still have a reasonable time scale.
Senator LUDLAM: And will that decision-making period-I will not hold you to it-to as late as 2016 consume the remainder of the $214 million?
Mr Gould : It would consume more than that.
Senator LUDLAM: More than that?
Mr Gould : Yes. What we need to do is complete the work I have described on options 3 and 4-the improved Collins class design and the new concept design. You want to take that work a bit further before you get to the point where you would fall back on something else. We would not be spending money on the off the shelf options until we had returned to them. That is the point.
Senator LUDLAM: I understand. That is helpful. But it is effectively the case, as ASPI put it, that the two most expensive and risky options are now the ones that are on the table and the option of purchasing something, which would have cost a great deal less and been satisfied, arguably, with a lesser capability, has been taken off the table for the moment?
Mr Richardson : I do not think we would necessarily accept that the two options actively in play are riskier. For instance, the evolve Collins would not necessarily be riskier. The base requirement is that if an off the shelf does not meet your strategic requirements, you are really playing with risk. The off the shelf and the modified off the shelf simply do not meet certain requirements.
Senator LUDLAM: So what are we likely to see between now and 2016? There is that study group, or however I should refer to it. What is next?
Mr Gould : We are currently in discussion, and will be in negotiation, with Kockums, the original designer of the Collins class, on what they could do and what they could produce by revising, improving and correcting design faults but not actually changing the diameter of the hull in the design. That puts some limitation on what you can do with the design. The object of the exercise over the next 18 months to two years is to understand how much you could improve a revised Collins design and what the limitations on that would be. At the same time, we have a team that is being set up in Adelaide as we speak to look at a concept study for a new design which takes that limitation away but then looks at how much more you could achieve in terms of capability by not having the limitation on hull diameter with a new design. That is about 18 months to two years work to be able to compare those two potential outcomes.
Senator LUDLAM: So the threshold between whether it is a modified Collins or something completely new is whether you expand the hull diameter?
Mr Gould : Basically, if you expand the hull diameter, you are going to, in effect, a new design. That gives you opportunity in terms of capability. Obviously, it is potentially a bigger design class than not.
Senator LUDLAM: So for the forthcoming two years, at the end of that period, there will actually be a decision that a future government is going to need to make. You will return to the original selection of four options as to which of the four to pursue?
Mr Gould : What we will be able to do in that 18 months to two-year period is answer the question about some ideas on how much risk is really involved in making those design changes or going to a new design, what capability range that would offer and how much future proofing that would offer, because a new submarine is going to last 30 years or so and technology and things will change during that period. That will be the advice given to government, and government will then have to make some choices about whether we continue with both or one of those options or it is conceivable that they come to the conclusion that they are both too difficult. But if you did that, as the secretary said, you are into a completely different capability equation.
Senator LUDLAM: And there are people in the field who believe that we should not have written off an off the shelf capability and maybe we do not need to go all the way to North Asia in Australian submarines, that maybe we could stay closer to home.
Mr Richardson : That is a strategic judgement. We simply respectfully disagree with those people.
Mr King : The whole reason we put in place the considered decision-making-the first and second pass and interim passes-is to achieve the expert opinion versus information and detail. It has proved well. A lot of experts have opinions, but assembling the right amount of information, the right level of detail and doing these studies has proved invaluable.
Senator LUDLAM: Well, we are not there yet. I do not know who to direct this to. Is it the view of the people at the table that it is likely that the existing Collins fleet will have to serve at least another eight-year full duty cycle given the delays inherent in the planning processes thus far?
Mr Gould : I think it is very likely that some of the Collins fleet will have to have some form of extension to their cycle. But how many and for how long, I really could not say at the moment.
Senator LUDLAM: Could you phase the new ones in one at a time?
Mr Gould : You would have to phase them in one at a time for no other reason than it is the practicality of how fast you can build and the practicality of how fast you can crew. So doing them with a reasonable interval in between each boat is a very sensible thing to do.
Senator LUDLAM: I will leave it there.