Decision to Revisit $32 Billion Purchase Comes as Asian Neighbors Bulk Up Military Muscle
By ROB TAYLOR And PATRICK BARTA CONNECT
Updated Feb. 27, 2014 5:19 a.m. ET
The first of Australia’s six Collins class submarines hitting the water at Port Adelaide in 1993; Australia is reviewing a plan to replace its fleet with 12 new subs at a cost of more than $30 billion. Agence France-Presse/Getty Images
CANBERRA, Australia—Australia will review plans to double its fleet of submarines, with the new conservative government under pressure to rein in its budget even as Asian neighbors dramatically ramp up military spending.
Defense Minister David Johnston said he was unconvinced that Australia needed as many as 12 new conventional submarines currently foreseen by military planners. It comes as regional neighbors, led by China, build up their naval and air arsenals amid disputes over territorial waters, especially in North Asia.
At a cost of up to 36 billion Australian dollars (US$32.28 billion), doubling the submarine fleet would be the country’s largest single military purchase.
“It’s a mystery to me [where that number of 12 came from],” said Mr. Johnston, who has called for a review of military-equipment spending as part of a yearlong strategic planning process launched by the conservatives, who swept to power in September elections on a promise of fiscal restraint.
“That is a technical issue that the current circumstances will dictate and I want [the] navy to tell me what they foresee is the way forward. It might be more than 12, it might be less. I’m not sure,” he said in an interview.
Australia’s former Labor government in 2009 released a defense planning paper that called for a dozen large, conventionally powered submarines to replace the country’s existing six-boat fleet of Collins class submarines.
Although much larger than submarines operated by regional neighbors, the Collins class submarines have been plagued by technical problems. On Thursday, a fire erupted on the submarine HMAS Waller off the West Australian coast, Australia’s Defense Department said. There were no casualties.
A new fleet of larger, more powerful and longer-range submarines would counter a growing undersea presence in Asia. Singapore, Indonesia, Vietnam and Malaysia are fielding new submarines to counter threats to some of the world’s most important energy-trade routes, as well as to hedge against Chinese ambitions.
China in January sent a surface warship fleet—possibly backed by a submarine—into waters between Indonesia and Australia, demonstrating Beijing’s naval reach. The move prompted some alarm in Canberra, which sent a maritime patrol aircraft to keep watch.
Southeast Asian nations typically operate submarines of about 2,000 submerged tons, while Australia envisages boats of 4,000 tons or more, possibly equipped with submarine-launched cruise missiles for land attack and capable of deploying special-forces soldiers.
Australia’s submarine-replacement program, no matter how ambitious it turned out to be, wouldn’t add to regional rivalries, with the close U.S. ally having long fielded a small but highly capable military that was well respected regionally, Mr. Johnston said.
“For many, many years we have owned and operated the world’s largest conventionally powered submarine, so the neighborhood is well used to us having a large and unique diesel-electric submarine,” he said.
Australia already has embarked on an expensive buildup of military equipment, including two 27,000-ton amphibious assault ships, new attack and transport helicopters, guided-missile destroyers, tanks and Super Hornet strike and electronic attack aircraft.
Australia has a defense budget of some A$26 billion in the fiscal year to June, or 1.6% of gross domestic product. The government plans in the next few years to buy up to 100 F-35 Lightning joint strike fighters to provide radar-evading air power, at a cost of up to A$16 billion.
But the military has come under pressure to reduce costs as the world’s 12th-largest economy retreats from a mining boom, driving up joblessness and eating into government revenues. The government in December forecast budget deficits totaling A$123 billion over the next four fiscal years to June 2017, and said it would cut billions from spending.
But earlier this week the country, which two years ago agreed to rotate thousands of U.S. Marines and their aircraft through Australia’s north, said it would buy A$4 billion of new Boeing Co. BA +0.28% -built P-8A Poseidon maritime patrol aircraft capable of ranging well into Asia. Those aircraft are likely to be joined later this year by a A$2.9 billion fleet of seven long-range MQ-4C Triton drones.
Mr. Johnston said he was open to the idea of Australia’s far-flung Cocos islands, in the Indian Ocean southwest of Indonesia, being developed as a base for U.S. or Australian Tritons. But he said there was no proposal currently to upgrade the islands’ dilapidated airstrip to expand maritime reach, as Chinese vessels increasingly patrol further from home.
China’s growing assertiveness in the East China Sea and elsewhere was to be expected of any country with growing energy needs, Mr. Johnston said, including a demand for Australian oil and gas resources. China is Australia’s largest trading partner.
“They are hostage to the importation of food and energy. I think they would be dilatory were they not to want to protect those sea lanes,” he said. “I’m not reactive to these things that are happening in the South China Sea.”