Second is a look at Tony Abbott\u2019s view of Australia\u2019s foreign policy in the middle of last year, from a speech he gave to to the Heritage Foundation.<\/i><\/p>\n
*****<\/p>\n
Graph(s) of the week: some (qualified) good news on Collins<\/a><\/b><\/h2>\nIn our\u00a0Mind the gap<\/a><\/em>\u00a0paper earlier this year, Mark Thomson and I made the comment that a successful program to extend the life of the Collins class submarines would give the future submarine program a fighting chance of avoiding a capability gap in the second half of the 2020s.<\/p>\nAt last week\u2019s\u00a0Submarine Institute of Australia 2012 conference<\/a>, we heard for the first time in public from Defence officials who have been involved in the Submarine Life Evaluation Program (SLEP) which has been looking at the feasibility and mechanics of keeping the Collins class going. The news was generally good\u2014there are no identified \u2018show stoppers\u2019 in such a program. And there seems to be a realistic opportunity to do a much-needed technology refresh of the submarine systems, and to fix the propulsion system issues that have plagued the fleet. Moreover, it\u2019s thought that the additional duty cycle for the boats might be ten years rather than the eight of the first two.<\/p>\nIf that happens, the availability of submarines might look something like the graph below (with the same somewhat idealised assumptions about the maintenance throughput of the Collins boats as in our earlier paper). A ten year extension of the Collins fleet life would give a reasonable amount of breathing space for the replacement program to deliver the first couple of new boats and trial them. That won\u2019t be easy\u2014we\u2019ll have to manage the substantial industrial and fleet management overheads of having two different Collins configurations at the same time as developing and building the next generation boat. But provided that can be done, and barring a failure of the follow-on build to deliver a functional product, the capability gap we warned of would effectively disappear.<\/p>\n
\u00a0![\"SubmarinesAvailable\"](\"http:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2013\/10\/SubmarinesAvailable-1024x568.gif\")
<\/a><\/p>\nThat\u2019s all good news, but it has to be qualified for a couple of reasons. First, it\u2019s not clear that the engineering solutions required have been worked through in sufficient detail to be confident of schedules. In fact, given that other talks at the conference stressed the continued importance of a land-based test facility for mechanical and electrical integration work on propulsion systems, I suspect that the solutions are more conceptual than blueprint ready.<\/p>\n
Second, we have no idea of the likely cost. The only indication we got at the meeting was that it would fit within the current DCP but would struggle if the DCP funding envelope didn\u2019t materialise as promised. And there lies the rub. The current DCP funding outlook is likely to prove to be a work of fiction. Here\u2019s the chart from\u00a0ASPI\u2019s 2012\u201313 budget brief<\/a>.<\/p>\n![\"SubmarinesAvailable2\"](\"http:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2013\/10\/SubmarinesAvailable2.gif\")
<\/a><\/p>\nAs Mark Thomson pointed out in his discussion of this figure, there\u2019s a full 133% increase required to move from the 2013\u201314 figure of a little over $3 billion to the \u2018beyond the forward estimates\u2019 (i.e. unreal) 2016\u201317 figure of almost $8 billion. For a variety of reasons, ranging from the political (money is promised for other portfolios) to the practical (Defence would have to ramp up its ability to administer a program far larger than anything it has done before), the peaks of the later part of this decade are almost certain to shrink. If the Collins SLEP is depending on that money, we might yet have problems.<\/p>\n
Even there there\u2019s room to be cautiously optimistic. There\u2019s already a fair bit of money approved for Collins maintenance and upgrades, which should allow some of the more pressing system obsolescence problems to be addressed before embarking on major work for the SLEP. In fact, that\u2019s the basis for the relatively upbeat assumptions Mark and I made about the Collins availability in the years to come. It\u2019s not always appreciated that some (although not all) of the problems with Collins availability were due to neglect and under resourcing for much of the past decade. For example, in the 2006\u201307 financial year the submarines were receiving only 60% of the resources allocated to Navy\u2019s surface combatants, after allowing for the difference in crew size and tonnage. This isn\u2019t credible given the complexity of the design. In no small part, the submarines didn\u2019t work properly because they weren\u2019t being maintained properly.<\/p>\n
And that\u2019s the final reason for some cautious optimism. The\u00a0Coles review<\/a>\u00a0identified many dysfunctional relationships that were contributing to this malaise. With some new management appointments at both ASC and within Defence\u2014including the \u2018tsar of all submarines\u2019\u00a0we once recommended<\/a>\u00a0(PDF) in the form of the new\u00a0General Manager Submarines<\/a>\u00a0(PDF, pages 8-9)\u2014there are signs that more attention is being paid to getting things right. But, as ever, time will tell.<\/p>\nAndrew Davies is senior analyst for defence capability at ASPI and executive editor of\u00a0<\/em>The Strategist.<\/em><\/p>\n\u00a0*****<\/p>\n
Defence and Tony Abbott\u2019s Heritage Foundation speech<\/a><\/strong><\/h2>\nTony Abbott\u2019s\u00a0speech<\/a>\u00a0at the Heritage Foundation in Washington last week had some messages for Canberra policymakers to help shape next year\u2019s \u2018blue\u2019 Incoming Government Brief. The speech was oddly constructed as some commentators have said, but there were four interesting themes: one announced a new bipartisan approach with government and three pointed to emerging differences.<\/p>\nAbbott\u2019s bipartisan point was about defence spending. The one line on spending in the prepared speech said: \u2018we will seek efficiencies in defence spending but never at the expense of defence capability.\u2019 In the\u00a0Q&A<\/a>, Abbott criticised the cumulative effect of spending cuts but stressed savings could be made as long as they didn\u2019t damage military capability. He said \u2018the last thing we want to do is dismay our friends and allies.\u2019 He did not say that a Coalition government would reverse spending cuts.<\/p>\nThis is a new element of bipartisanship\u2014to cut defence spending in the four-year period of budget forward estimates. Some\u00a0Coalition Speaker\u2019s Notes<\/em><\/a>\u00a0obtained by Crikey \u2018commit to restoring the funding of Defence to 3% real growth out to 2017\u201318 as soon as we can afford it.\u2019 But 3% growth won\u2019t restore what has been cut and Abbott\u2019s comments suggest the Coalition prefers the government\u2019s approach. No one in Defence should imagine they will get an easy ride under a Coalition government. Nor should the Coalition think that cutting Defence will be easy. If they do form government they will get a shock when the Incoming Government Brief advises that cutting future capability is the only way to stay within the new spending guidelines.<\/p>\nSo, to the emerging differences. The first was on values. Abbott said, \u2018Australia\u2019s foreign policy should be driven as much by our values as our interests.\u2019 How that translates into diplomacy remains to be seen. But it points to a close US alliance relationship even though Abbott used a lot of his speech to tell the Americans to toughen up. Abbott also claimed \u2018a vindication\u2019 of Western values that underpin economic and political reform in the Asia\u2013Pacific. While\u00a0some<\/a>\u00a0have said this sounds old fashioned, one of the quiet successes of the last decade has been the revitalisation of the Five Eyes community of the US, UK, Canada, Australia and New Zealand. The Five Eyes concept has a pedigree in intelligence but beyond that the grouping is one of the most effective multilateral security institutions in the world. More could be done to strengthen strategic engagement between the five.<\/p>\nAbbott\u2019s take on the \u2018Asian Century\u2019 amounts to a second difference with government. It will be an Indian and Japanese century, he said, as well as a Chinese one. It will also be an American century: Abbott talked-up the continuing relevance of the US in Asia and also dwelt on Indonesia\u2019s rising significance. The theme of an Asia-focussed Labor policy versus a more internationalist Coalition approach could shape into an interesting debate. Much will depend on how\u2014or if\u2014Ken Henry resolves his treatment of the US in his Asian Century White Paper.<\/p>\n
A third theme in the paper was how to manage the risk of conflict. Abbott rather bluntly said that alliances in the Asia\u2013Pacific have \u2018the potential to draw in America and its partners\u2019 into \u2018serious military conflict.\u2019 The solution, he claimed was political reform and economic growth: \u2018A China that was freer as well as richer would be the best guarantee of peace and stability in the Asia\u2013Pacific.\u2019 Not surprisingly Abbott lowered the volume on that during his China visit, although he still commented in his\u00a0Beijing speech<\/a>\u00a0that the Chinese \u2018still can\u2019t choose their government\u2019\u2014a long way from the pragmatic Howard approach on China.<\/p>\nAbbott\u2019s Heritage Foundation audience did not bite at the line that alliances might draw the US and Australia into conflict. Indeed in the rest of the speech Abbott made clear his commitment to the defence relationship. Some clarity is needed here. While the domestic defence debate fixates on the cost of military force, government and opposition should acknowledge that the defence organisation is not just a cost-overhead: it helps build stability in the region. Stability is the platform for growth, not the other way around.<\/p>\n
\u2018We\u2019re more than allies, we\u2019re family\u2019 Abbott said, but expectations of what we can and should deliver have been raised by a decade of difficult military operations. For all the talk of family the US will push Australia hard on defence spending regardless of who wins their Presidential election, or who wins our federal poll.<\/p>\n
At last week\u2019s\u00a0Submarine Institute of Australia 2012 conference<\/a>, we heard for the first time in public from Defence officials who have been involved in the Submarine Life Evaluation Program (SLEP) which has been looking at the feasibility and mechanics of keeping the Collins class going. The news was generally good\u2014there are no identified \u2018show stoppers\u2019 in such a program. And there seems to be a realistic opportunity to do a much-needed technology refresh of the submarine systems, and to fix the propulsion system issues that have plagued the fleet. Moreover, it\u2019s thought that the additional duty cycle for the boats might be ten years rather than the eight of the first two.<\/p>\n If that happens, the availability of submarines might look something like the graph below (with the same somewhat idealised assumptions about the maintenance throughput of the Collins boats as in our earlier paper). A ten year extension of the Collins fleet life would give a reasonable amount of breathing space for the replacement program to deliver the first couple of new boats and trial them. That won\u2019t be easy\u2014we\u2019ll have to manage the substantial industrial and fleet management overheads of having two different Collins configurations at the same time as developing and building the next generation boat. But provided that can be done, and barring a failure of the follow-on build to deliver a functional product, the capability gap we warned of would effectively disappear.<\/p>\n \u00a0 That\u2019s all good news, but it has to be qualified for a couple of reasons. First, it\u2019s not clear that the engineering solutions required have been worked through in sufficient detail to be confident of schedules. In fact, given that other talks at the conference stressed the continued importance of a land-based test facility for mechanical and electrical integration work on propulsion systems, I suspect that the solutions are more conceptual than blueprint ready.<\/p>\n Second, we have no idea of the likely cost. The only indication we got at the meeting was that it would fit within the current DCP but would struggle if the DCP funding envelope didn\u2019t materialise as promised. And there lies the rub. The current DCP funding outlook is likely to prove to be a work of fiction. Here\u2019s the chart from\u00a0ASPI\u2019s 2012\u201313 budget brief<\/a>.<\/p>\n As Mark Thomson pointed out in his discussion of this figure, there\u2019s a full 133% increase required to move from the 2013\u201314 figure of a little over $3 billion to the \u2018beyond the forward estimates\u2019 (i.e. unreal) 2016\u201317 figure of almost $8 billion. For a variety of reasons, ranging from the political (money is promised for other portfolios) to the practical (Defence would have to ramp up its ability to administer a program far larger than anything it has done before), the peaks of the later part of this decade are almost certain to shrink. If the Collins SLEP is depending on that money, we might yet have problems.<\/p>\n Even there there\u2019s room to be cautiously optimistic. There\u2019s already a fair bit of money approved for Collins maintenance and upgrades, which should allow some of the more pressing system obsolescence problems to be addressed before embarking on major work for the SLEP. In fact, that\u2019s the basis for the relatively upbeat assumptions Mark and I made about the Collins availability in the years to come. It\u2019s not always appreciated that some (although not all) of the problems with Collins availability were due to neglect and under resourcing for much of the past decade. For example, in the 2006\u201307 financial year the submarines were receiving only 60% of the resources allocated to Navy\u2019s surface combatants, after allowing for the difference in crew size and tonnage. This isn\u2019t credible given the complexity of the design. In no small part, the submarines didn\u2019t work properly because they weren\u2019t being maintained properly.<\/p>\n And that\u2019s the final reason for some cautious optimism. The\u00a0Coles review<\/a>\u00a0identified many dysfunctional relationships that were contributing to this malaise. With some new management appointments at both ASC and within Defence\u2014including the \u2018tsar of all submarines\u2019\u00a0we once recommended<\/a>\u00a0(PDF) in the form of the new\u00a0General Manager Submarines<\/a>\u00a0(PDF, pages 8-9)\u2014there are signs that more attention is being paid to getting things right. But, as ever, time will tell.<\/p>\n Andrew Davies is senior analyst for defence capability at ASPI and executive editor of\u00a0<\/em>The Strategist.<\/em><\/p>\n \u00a0*****<\/p>\n Tony Abbott\u2019s\u00a0speech<\/a>\u00a0at the Heritage Foundation in Washington last week had some messages for Canberra policymakers to help shape next year\u2019s \u2018blue\u2019 Incoming Government Brief. The speech was oddly constructed as some commentators have said, but there were four interesting themes: one announced a new bipartisan approach with government and three pointed to emerging differences.<\/p>\n Abbott\u2019s bipartisan point was about defence spending. The one line on spending in the prepared speech said: \u2018we will seek efficiencies in defence spending but never at the expense of defence capability.\u2019 In the\u00a0Q&A<\/a>, Abbott criticised the cumulative effect of spending cuts but stressed savings could be made as long as they didn\u2019t damage military capability. He said \u2018the last thing we want to do is dismay our friends and allies.\u2019 He did not say that a Coalition government would reverse spending cuts.<\/p>\n This is a new element of bipartisanship\u2014to cut defence spending in the four-year period of budget forward estimates. Some\u00a0Coalition Speaker\u2019s Notes<\/em><\/a>\u00a0obtained by Crikey \u2018commit to restoring the funding of Defence to 3% real growth out to 2017\u201318 as soon as we can afford it.\u2019 But 3% growth won\u2019t restore what has been cut and Abbott\u2019s comments suggest the Coalition prefers the government\u2019s approach. No one in Defence should imagine they will get an easy ride under a Coalition government. Nor should the Coalition think that cutting Defence will be easy. If they do form government they will get a shock when the Incoming Government Brief advises that cutting future capability is the only way to stay within the new spending guidelines.<\/p>\n So, to the emerging differences. The first was on values. Abbott said, \u2018Australia\u2019s foreign policy should be driven as much by our values as our interests.\u2019 How that translates into diplomacy remains to be seen. But it points to a close US alliance relationship even though Abbott used a lot of his speech to tell the Americans to toughen up. Abbott also claimed \u2018a vindication\u2019 of Western values that underpin economic and political reform in the Asia\u2013Pacific. While\u00a0some<\/a>\u00a0have said this sounds old fashioned, one of the quiet successes of the last decade has been the revitalisation of the Five Eyes community of the US, UK, Canada, Australia and New Zealand. The Five Eyes concept has a pedigree in intelligence but beyond that the grouping is one of the most effective multilateral security institutions in the world. More could be done to strengthen strategic engagement between the five.<\/p>\n Abbott\u2019s take on the \u2018Asian Century\u2019 amounts to a second difference with government. It will be an Indian and Japanese century, he said, as well as a Chinese one. It will also be an American century: Abbott talked-up the continuing relevance of the US in Asia and also dwelt on Indonesia\u2019s rising significance. The theme of an Asia-focussed Labor policy versus a more internationalist Coalition approach could shape into an interesting debate. Much will depend on how\u2014or if\u2014Ken Henry resolves his treatment of the US in his Asian Century White Paper.<\/p>\n A third theme in the paper was how to manage the risk of conflict. Abbott rather bluntly said that alliances in the Asia\u2013Pacific have \u2018the potential to draw in America and its partners\u2019 into \u2018serious military conflict.\u2019 The solution, he claimed was political reform and economic growth: \u2018A China that was freer as well as richer would be the best guarantee of peace and stability in the Asia\u2013Pacific.\u2019 Not surprisingly Abbott lowered the volume on that during his China visit, although he still commented in his\u00a0Beijing speech<\/a>\u00a0that the Chinese \u2018still can\u2019t choose their government\u2019\u2014a long way from the pragmatic Howard approach on China.<\/p>\n Abbott\u2019s Heritage Foundation audience did not bite at the line that alliances might draw the US and Australia into conflict. Indeed in the rest of the speech Abbott made clear his commitment to the defence relationship. Some clarity is needed here. While the domestic defence debate fixates on the cost of military force, government and opposition should acknowledge that the defence organisation is not just a cost-overhead: it helps build stability in the region. Stability is the platform for growth, not the other way around.<\/p>\n \u2018We\u2019re more than allies, we\u2019re family\u2019 Abbott said, but expectations of what we can and should deliver have been raised by a decade of difficult military operations. For all the talk of family the US will push Australia hard on defence spending regardless of who wins their Presidential election, or who wins our federal poll.<\/p>\n<\/a><\/p>\n<\/a><\/p>\nDefence and Tony Abbott\u2019s Heritage Foundation speech<\/a><\/strong><\/h2>\n