Australian Industry Can Support Allied Supply Chains and Our Own Committees
I rise to speak on this report because the works to be done in Western Australia to facilitate the rotational force there are important.
Because of the way these things are tabled, in my not being a member of the committee, I’ve only just received the report.
But what it highlights is that Defence is proceeding with what they’re calling their optimal pathway towards developing our capabilities to support SSN submarines, both those that are rotating through from the US and UK down the track within the decade—the, hopefully, three SSN that will be sold to Australia by the United States—and eventually the SSN-AUKUS, which is the submarine built with the UK.
At the moment, that optimal pathway is based on the assumption that the best way to get additional capability for the US forces in the Pacific to provide the deterrent factor which people are looking for is to build new submarines, hence the investment in US boat yards, both HII and EB, electric boat, to build new Virginia class submarines.
That’s good; I support that.
But the target of getting to 2.33 submarines out of those yards in what the Americans are now calling ‘the speed of relevance’—that is, before the peak threat of the conflict in our region, which is late this decade—will make it very difficult to get the sort of numbers that they need to provide that deterrent factor and that we expect the US to need in order for a future president to sign off on the sale.
I’m still optimistic that that will occur.
As a former experimental test pilot, as I’ve often said before, I’m an optimist by nature, almost by definition, but we could make that job easier if we looked at the Congressional Research Service report which was provided to the US Congress as part of their preparatory works for debating the AUKUS legislation.
What that highlights is that the new build of submarines is a pathway that they support, but it also highlights that there are 18 Virginia SSN which are in a backlog of maintenance. They’re in a backlog of maintenance because there are insufficient shipyard facilities to do the work, there are insufficient workers, and there’s insufficient capacity within their supply chain.
If you look back through history, Australia, during World War II, actually provided one of the largest operating and maintenance bases in the world for UK and US submarines.
We have the capacity in Australia, as we have demonstrated through joint maintenance of things like the mark 48 ADCAP torpedo and as we demonstrate through our maintenance for the Collins Class submarine, to do the work that is required for complex working systems.
There is a solution that has not been widely discussed, but it is a viable solution worthy of consideration.
This report endorses having an optimal pathway as the preparatory works that will help get us the workforce and the infrastructure, in particular, by the mid-2030s. This report goes to the infrastructure to do deep level maintenance—what we would call a full-cycle docking on the Collins; the Americans have a different term, but it’s that deep maintenance—rather than investing slowly in this cruel walk/run process that gets us there by 2030.
If that were compressed, such that we could assist the US to remediate those 18 boats, or some of those 18 boats, ahead of the end of this decade, what that then does is two things.
In the US interest, it means that they get to the commander of the Pacific fleet more SSN Virginias to increase the deterrent effect that the USINDOPACOM force have in our region, which decreases the likelihood of conflict.
That’s a win for them and it’s a win for the region, including us.
The win for us is that we can actually invest now in building the capability and workforce within our industry to do the work that we need to get done by the early 2030s anyway, and so we actually incentivise, through contracts, companies to start employing people for this work.
We could bring them in, for example, from the offshore patrol vessel with the contract being halved.
In my discussions with industry there is workforce there from the TransCap program on the Anzac. There are some of the new joint ventures that are being stood up, including British firms such as Babcock, who already work in the US. There are opportunities there for workforces to be focused on this task.
There is also spare capacity in many elements of Australian industry.
For example, in South Australia we have MacTaggart Scott, which, as you could probably guess, is a company that has its origins in Scotland.
MacTaggart Scott UK not only supports the British submarines but it also supports the US. MacTaggart Scott Australia has spare capacity, from its work on our submarines, and could support the US. I’ve spoken to many companies who indicate the same thing: given a contract and a task, they could step up to support the supply chain for the US.
What are some missing pieces if that were to happen in a meaningful way?
There are two.
The first is that the US would have to change their legislation.
At the moment their legislation requires that deep maintenance is done in a US port. I understand their reasons for that—sovereign capability and workflow—but at the moment it’s actually harming their national interest, not helping.
They have 18 boats in the backlog.
They should only have 10 or less at any given time, according to their strategic planning, but this congressional research report indicates that they have got 18, and that’s harming their ability to get deterrent capability.
It’s harming our prospects of a future US President saying: ‘I’m comfortable to sign off. Sell the three SSN Virginias to Australia.’ There’s an interest for them in making something like this work, and there’s an interest for us in doing it.
So the legislation is one thing and given the interest to them I don’t see a problem with them dealing with that—at least in the short order—to allow this remediation to occur.
The second is the facilities to do this work.
On a nuclear boat where the reactor has to keep running, the potential for where we’re going to end up by the mid-2030s of having a land-based graving dock are not achievable. Even looking back to the Captain Cook dock in Sydney, the fact is that it was built under wartime conditions but still took over five years.
My discussions with industry indicate it would take at least five to six years now. So the only solution that is viable is a floating dock, and there are floating docks that have been certified to lift Virginia SSN out of the water and keep the reactors running. Industry tells me that could be built in under two years.
Just as we have contributed funding to US shipyards for the building of new boats, were the US to say ‘Yes, this would be in our benefit because we could get more boats more quickly to our war fighters in the Pacific,’ an investment by them in a floating dock to operate off Henderson would be the starting point to focus our industry, our workforce and our productive capacity to remediate some, even one or two, of those 18 boats, which would help deter conflict and help improve the chances of making sure that we also get those Virginia SSN down the track.
The other benefit for us long term has to do with the fact that the graving dock in Sydney is badly in need of an upgrade. But it’s the only one we have for vessels that size, so we can’t take it out of service at the moment.
Were this floating dock to be in place, they could build the graving dock in the west, on the original timeline into the 2030s, and then relocate the floating dock to a facility on the east coast, while the Captain Cook dock had the remediation work done.
Whilst I support the PWC’s report because it approves investment in the current plan, I would argue that we need to think outside the box.
If we accept the strategic imperative of both the 2020 Defence strategic update and the Defence strategic review 2023, then we need to take steps that are not our normal way of doing business in order to deter conflict and make sure we have the industrial resilience and military capability to win if we have to, in the end, defend Australia and our interests.