The Government, and many others, have described the grim parallels between Australia’s present strategic circumstances and those leading up to World War II ^[1]. As a maritime nation we must ask urgently how we find ourselves in a position where one of our 11 major surface combatants ^[2] has effectively been removed from service due to workforce pressures.

That’s exacerbated by suggestions that another two aging Anzac class ^[3] frigates will be laid up because we don’t have crew for them. If it happens, 27% of the Royal Australian Navy’s surface combatant fleet will be mothballed.

Much has been made of the challenges facing the Australian Defence Force, and the RAN in particular, in recruitment and retention, but the focus must be on a structure that can rapidly support a Navy capable of responding to the increased risk of conflict in our region.

Navy’s workforce issues are well known and are not a new constraint on its operations. The 2023 defence strategic review (DSR) ^[4] acknowledged that the Navy faced the biggest workforce challenges of the three services. Government and Navy have spoken extensively on recruitment and retention. Since the DSR, a new ADF 3-star position has been established to centralise the response to workforce issues and bonuses aplenty have been announced ^[5] to address retention rates.

Conversations around RAN workforce issues immediately focus on recruitment and retention. Whilst this is an issue for an RAN with a commitment to grow, it is not the main issue—in some circumstances it’s a distraction from structural changes that are required.

With wars in Europe and the Middle East, we cannot spend time wishing for the navy we would like to have. We must immediately structure the navy we have for the high-end conflict it may soon face. In doing that, dividends may well be achieved in recruitment and retention as a greater sense of purpose is achieved in naval personnel as mariners and war fighters.

It’s by no means a solid metric but, anecdotally, USS Carney’s engagements ^[6] in the Red Sea were followed rapidly by 15 re-enlistments on the vessel after its capable team intercepted a barrage of missiles.

Bonuses alone don’t fix retention but a sense of purpose goes a long way.

The 2020 defence strategic update (DSU) ^[7] clearly articulated that the Department of Defence could no longer rely on the concept of 10 years strategic warning time of a major conflict in our region. This assessment drove the force structure plan (FSP) that sought to reshape ADF capability. The FSP was followed by the 2022 announcement of a target increasing the Defence workforce (the uniformed services and the public service) by 30% by 2040. The intention is to increase the permanent Navy to 20,000 by 2040.

The problem with the Defence workforce growth announcement is that it was just about growth. The message that we may not have 10 years warning time of a possible major conflict did not prompt a fundamental rethink of the Navy’s personnel structure or the tasks it’s required to deliver. The workforce will need to grow to support the transition to larger crews for nuclear-powered submarines with a 130% increase in crewing requirements between the Collins’ class and Virginia class boats—and any further growth in surface combatant force crewing numbers. But the issues tying up the Anzacs are not, as they appear, fundamentally about navy numbers.

So, what are these numbers? Detail is often scant on the RAN workforce, but the 2022-23 Defence Annual Report is instructive. At the end of the last financial year the RAN consisted of 14,958 permanent and 4, 607 reserve personnel. ^[8] The permanent navy had contracted by 213 in 12 months and 543 in 24 months. However, it has grown by 752 since the 2019-2020 annual report and the current retraction may well be a response to the higher than usual growth during the Covid period as separation rates dropped to an abnormal 6.5% at 30 June 2020, and 7.4% at 30 June 2021.

Not only has the RAN grown from its pre-pandemic numbers, but this is also part of a wider growth story over the last 20 years following the catastrophic cuts in the 1990s. In 2012-13 the permanent navy had 13,760 personnel, and in 2003 it was 12,847. The RAN has grown 16% over 20 years.

Organisationally, it’s generally thought that 10% is a healthy separation rate. ^[9] The last annual report ^[8] gave the navy’s rolling separation rate as 9.2%, slightly down from the 9.7% in the previous report but substantially lower than the just under 12% rate in 2003. It was close to the five-year average of 9.1% until the impact of Covid in 2019-2020. Unfortunately, recruitment details are no longer made available in the annual report but it can be taken on face value, given the RAN’s contraction in the last two years, that recruitment is lower than it would like.

This isn’t to say that recruitment and retention isn’t an issue for an organisation that needs to grow, it is. But it’s not why the Navy cannot presently crew its ships. Information on separation rates in critical seagoing categories is not readily accessible to the public, so this may be part of the challenge.

Given that the RAN is growing when five, 10 and 20 year trends are considered but likely not at the rate it needs too, it must urgently prioritise structural reform. Assessing how to reform a navy structured around peacetime needs for the increasing risk of conflict in the region is difficult and complex. But there are areas it could quickly consider.

Specific elements of structural reform requiring urgent consideration include examining the tasks assigned to the Navy and how at sea logistics and constabulary roles may be adequately resourced. This requires bold changes and bold decision-making as I wrote in my 2023 ASPI report An Australian maritime strategy: resourcing the RAN ^[10]. It’s time to consider the allocation of at sea logistics to a fleet auxiliary, ^[11] designing and crewing auxiliary vessels to execute these roles with fewer crew.

It’s important to consider the Navy’s ability to execute all that is expected of it in a conflict. Passing constabulary roles to a coast guard would provide an important element of layered Defence, but would also free up the RAN for war fighting.

The DSR highlighted the need to review the structure of the ADF reserves and recommendations are due in 2025. Given our strategic circumstances, that’s unacceptably late. Immediate consideration needs to be given to recruiting personnel directly into the naval reserves, and to requiring reservists to keep their skills current.

The 2022-23 Defence Annual Report stated that the Navy had 4,607 permanent reserves. Mobilised reserves in the event of crisis or conflict allows the government to surge our maritime fighting capability. But short of crisis or conflict, using reserves in peacetime would bolster the RAN by allowing the permanent structure to focus on supporting and delivering a seagoing capability. Presently, unlike army reservists, civilians cannot join the naval reserves unless they are in a specialised capacities such as doctors, legal officers, media officers, psychologists etc. The current restrictions on joining the RAN reserves limit a whole spectrum of society which could support Australia’s maritime defence.

The RAN needs to adopt a cultural approach of treating its personnel as mariners and war fighters first. In an organisation struggling to crew its small number of major surface combatants there needs to be a reckoning on what roles within the RAN and ADF the Navy must focus its efforts on, and what can be supported by other means. The United States Navy Chief of Navy Operations (CNO) recently released her priorities as focusing on ‘warfighting, warfighters, and the foundation that supports them’. ^[12] The RAN needs to follow suit, shedding its structure, where possible, of non-seagoing categories and outsourcing certain roles to other services or the public service. Getting our ships to sea must be the priority.

This is a brief precis of some of the structural changes the Navy must reckon with to be fit to fight in an era of geopolitical tension. The situation is much more complicated than this space will allow, but the RAN must move past workforce discussions focused only on recruitment and retention. Yes recruitment is an issue, retention overall is healthy. The Navy must restructure to support a focus on its seagoing units, but also consider the tasks it undertakes and question whether these may be better undertaken by a fleet auxiliary or coast guard. Time is no longer on our side, and in an era of global tensions it is not acceptable for a navy of nearly 15,000 personnel to be tying up ships.