The Albanese government has announced a major overhaul of the navy’s surface combatant fleet, saying it would more than double the number of warships, including the intention to acquire six new large optionally crewed surface vessels (LOSVs) that can be operated remotely by a support vessel during wartime.
The plan will mean Australia reduces its order of Hunter-class frigates from nine to six. The new surface combatant fleet will also consist of three upgraded Hobart-class destroyers, 11 new general-purpose frigates to progressively replace the six remaining Anzac-class frigates, the six new LOSVs and 25 minor war vessels.
The announcement came after the government received independent analysis, led by the retired US navy Vice-Admiral William Hilarides, on changes needed to the navy fleet in parallel with the Aukus nuclear-powered submarine plan. The independent review of the “size, structure and composition of Navy’s surface combatant fleet” was handed to the government last year.
The analysis found that the current and planned surface combatant fleet was “not appropriate for the strategic environment we face, noting it is the oldest fleet Navy has operated in its history”.
It argued that Australia needed a surface fleet with “greater capability in integrated air and missile defence, multi-domain strike and undersea warfare”, echoing calls from the defence strategic review last year which found that the “plan for the surface combatant fleet is not fit for purpose”.
The independent analysis urged “immediate implementation” of the shake-up to the fleet, arguing that “any delay will exacerbate the risk” to Australia’s security.
$54bn total bill
The government announced an additional $1.7bn over forward estimates and $11.1bn over the next decade for accelerated delivery of the surface combatant fleet and to expand Australia’s shipbuilding industry, bringing the total cost of the plan over the next 10 years to $54bn.
The government says this investment will mean the defence spend in the early 2030s will reach 2.4% of GDP, compared with the 2.1% it was planned to be when the government came to office.
“This decision we are making right now sees a significant increase in defence spending in this country and it is needed given the complexity of the strategic circumstances that our country faces,” said Richard Marles, the defence minister and deputy prime minister.
The independent review also supports the defence strategic review and the government’s commitment to continuous naval shipbuilding in Australia, calling it “an essential foundation for sovereign capability and independence”.
The chief of navy, Admiral Mark Hammond, called the announcement a “welcome intervention” and a “shot in the arm”, saying it was the “most significant investment in the surface combatant fleet” in the navy’s history.
The LOSVs are now being developed by the US, with the Australian government in talks with Washington and planning to be a “fast follower” once the ships were operational. Australia intends to build the six LOSVs in Western Australia.
A model for the general-purpose frigates to be acquired has not been settled on, with models from the US, South Korea, Germany and Spain under consideration.
More work for Adelaide and Perth shipyards
Construction of the Hunter-class vessels will begin at the Osborne shipyard in South Australia this year, with the government saying the work would sustain at least 2,000 local jobs and create 500 jobs over the next decade.
The remainder of the vessels will be built in WA at the Henderson precinct, with the government saying its plan would create at least 1,200 jobs. The review noted that the precinct was not yet set up for shipbuilding on this scale.
Pat Conroy, the minister for defence industry, said the news represented a “good day for the Australian Defence Force and it’s a great day for the Australian naval shipbuilding industry. We are delivering a large, more lethal Navy sooner and that means continuous shipbuilding work for our skilled workers around the country, particularly in Adelaide and Perth.”
The decision to reduce the number of Hunter-class frigates from the government aligns with a report published by the Australian Strategic Policy Institute (last year, which said sticking with the production of nine Hunter-class frigates would result in an “unbalanced” fleet “biased” towards anti-submarine warfare.
The frigates are geared towards anti-submarine warfare and have fewer “vertical-launching system” missile cells, meaning they have less capability to destroy aircraft and other surface ships.
The government said that under the new plan, they’s missile strike capability would increase dramatically, from 432 planned vertical missile cells to 702.
The number of Arafura-class offshore patrol vessels will also be reduced from 12 to six, with their role focused on civil maritime security operations.
Marles said the plan would also lead to the delivery of the warships sooner than had been planned – accelerating procurement of the general-purpose frigate, the first of which would be received this decade.
“This blueprint will see Navy equipped with a major surface combatant fleet over twice as large as planned when we came to government, with more surface combatants in the water sooner.”
