Australia's $40 billion project to replace our six Collins Class submarines with 12 Future Submarines is at risk of failing. In addition to the potential gap between the retirement of the Collins Class and the commissioning of the Future Submarine, there are unsolved problems with the Collins Class that threaten the viability of our future fleet.
Australia's diesel-powered Collins Class submarines are expensive and unreliable and these problems are likely to be inherited by any Australian-designed Future Submarine. As a result of these problems, Australia must explore leasing the US Navy's nuclear-powered Virginia Class attack submarine.
Nuclear-powered submarines can travel further, faster and remain deployed for much longer than their diesel-powered rivals. Nuclear-powered submarines operate more powerful sensors, systems and weaponry.
Despite these advantages, the government has refused to consider a nuclear option, instead preferring to substantially redesign an existing diesel submarine. The same process gave us the Collins Class; we don't need to repeat the mistake to know the likely outcome.
Each Collins Class submarine costs more than $110 million a year to maintain and operate, with total costs for the six submarines likely to exceed $1 billion a year by 2021. Nor has the higher cost meant greater reliability. Typically, no more than two Collins Class submarines have been available for deployment. The rest have been in maintenance or awaiting repair of serious defects.
By contrast, the Virginia Class submarine costs the United States approximately $50 million per submarine per year and is proving very reliable.
The acquisition costs are lower too. The upfront cost of leasing eight Virginia Class submarines (together with establishment costs) is $23 billion to $27 billion, substantially lesser than the $40 billion estimate for the diesel-powered Future Submarines.
The US would seriously consider a request from Australia to lease Virginia Class submarines. Leasing nuclear submarines to Australia is in the interests of both Australia and the United States.
The US is rebalancing its fleet towards the Pacific to face the challenges of the Asian Century and the security tensions in the region. As a key US ally in the region, Australia's submarine forces are effective force multipliers for the US so the US wants to ensure that Australia has capable, reliable submarines. At the same time, the US Defence Department is facing a mandatory 10% budget cut across all programs. Australia participating in the Virginia Class program would alleviate these concerns. There are also historical precedents, the United States exported nuclear submarine technology to the United Kingdom in the 1950s and agreed to do the same for Canada in the 1980s.
Arguments against nuclear-powered submarines don't add up. The defence minister cited self-reliance as the main reason for rejecting nuclear-powered submarines. However, the Collins Class submarine was the poster child for self-reliance and it is hardly a success story.
Moreover, Australia depends heavily on foreign defence companies (and their Australian subsidiaries) for development and sustainment of its platforms now, and that dependence will only increase given Australia's declining defence budgets.
While nuclear safety is an important consideration, US nuclear-powered submarines have a perfect safety record, having travelled more than 240 million kilometres without a single reactor incident and visited Australian bases since 1960 without any problems. Moreover, submarine reactors are a fraction of the size of a nuclear power plant and much less dangerous.
What is important is getting the best submarine we can for the money the government is willing to spend. Rejecting highly capable nuclear-powered submarines on the basis of ideological objections, or for reasons like defence industry protectionism, is a mistake. Australia must correct that mistake and consider nuclear-powered submarines for the Future Submarine project.
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