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Naval power is now front and centre for the Albanese government, with an emphasis on urgency, distributed firepower, and numbers set to transform the Royal Australian Navy. But has the surface fleet review truly delivered this and what are we now getting?
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Providing bountiful avenues for trade, a source of food, and ancient foundation myths – from the earliest days of human settlement in Australia – the ocean has played an ever-increasing role in the fabric of every day Australian life.
In contemporary life, this has only become more important, as the largest island continent on the planet with a maritime jurisdiction in excess of eight million square kilometres, Australia, as a nation and a people, is defined by its relationship with the ocean.
The importance of this link to the regional and global maritime commons has only become more important over the last half-decade, as COVID and mounting global tensions off the back of Russia’s invasion of Ukraine and the subsequent 7 October 2023 attacks on Israel by Hamas have now spread to engulf the Middle East.
Further compounding this is Australia’s uneasy relationship with the historic concept known as the “tyranny of distance” which is now rapidly being replaced by a “predicament of proximity”.
The rise of this “predicament of proximity” has only been accelerated by the rapid and unprecedented expansion of the People’s Liberation Army-Navy under Xi Jinping’s ambitious and aggressive new reimagining of Communist China.
Recognising this fundamental strategic and tactical reality, the Albanese government’s Defence Strategic Review has moved to reshape the Royal Australian Navy into a flexible, future-proofed force capable of meeting the tactical and strategic operational requirements placed upon the service by the nation’s policymakers.
At the core of this renewed emphasis, the review stated, “Australia’s Navy must be optimised for operating Australia’s immediate region and for the security of our sea lines of communication and maritime trade.”
In doing so, it gave birth to the Independent Analysis into Navy’s Surface Combatant Fleet, colloquially known as the surface fleet review, spearheaded by US Vice Admiral (Ret’d) William Hilarides to determine the makeup of the Navy surface fleet to complement the arrival of Australia’s future nuclear-powered submarine fleet.
The Defence Strategic Review summarises this, stating the need for “an enhanced lethality surface combatant fleet, that complements a conventionally armed, nuclear-powered submarine fleet, is now essential given our changed strategic circumstances”.
Following nearly a year of speculation, which reached fever pitch in recent months, the surface fleet review is finally here. There are some winners, some losers, and some long-held beliefs left in tatters as the government seeks to transform Australia’s naval capability.
Devil is in the details
As with all things, the devil is in the details, with the independent review identifying “that we need a surface fleet of warships with greater capability in integrated air and missile defence, multi-domain strike and undersea warfare. These are the capabilities needed to support critical activities, including patrolling our northern approaches, close escort and theatre sea lift missions”.
Deputy Prime Minister and Defence Minister Richard Marles stressed that the plan outlined in the independent review would mark a major “acceleration” of the Navy’s shipbuilding pipeline and plan with an expanded surface combatant fleet to better position the nation’s response and resilience in the face of mounting regional threats.
As part of this, Australia will acquire a fleet of nine “Tier 1” ships, made up of the existing Hobart Class destroyers and a scaled back six Hunter Class frigates “of the current design”, providing a complementary and interlocking strike, air and missile defence and anti-submarine warfare capability.
Australia’s fleet of Hobart Class destroyers will undergo their planned combat system upgrades, which will see their Aegis combat system from Baseline 8 to the Baseline 9 standards.
This isn’t without its trade offs however, with the review identifying that the reduction of “Tier 1” vessels from 12 to nine will require an acceleration of the replacement for the Hobart Class destroyers, with “initial requirements setting and design work will need to commence by mid-2027”.
Finally, the “Tier 1” ships will be rounded out by the acquisition and local construction of six large optionally crewed surface vessels (LOSVs) with 32 vertical launch cells and will rely on a minimum of Aegis Baseline 9 or later to ensure these vessels are interoperable with the Hobart Class, post-modernisation, and the Hunter Class from the beginning of service.
While these “Tier 1” ships will serve as the “frontline” or “real pointy end” of the Navy’s surface fleet capability, their limited number will see a fleet of “at least seven, and optimally 11” “Tier 2” ships as a Transition Capability Assurance (TransCAP) with the vessels “optimised for undersea warfare, to operate both independently and in conjunction with the Tier 1 ships to secure maritime trade routes, northern approaches and escort military assets”.
Four potential designs have been identified by the review as suitable for filling the “Tier 2” role, with Germany’s Meko A-200, Japan’s Mogami 30FFM, South Korea’s Daegu FFX Batch II and III, and Spain’s Navantia ALFA 3000 all in the running to fill this role, with the first three of the successful design to be built abroad to accelerate entry into service by the end of the decade.
As part of this TransCAP, Australia will steadily scale back the existing fleet of ageing Anzac Class frigates, with the oldest two vessels to be decommissioned as per their original planned life.
The review stated that the phased approach to the decommissioning of the Anzac Class, “will ensure that retained Anzac Class frigates will maintain the minimum viable capability for the Tier 2 mission until replaced by the new Tier 2 surface combatants. The number of Anzac Class frigates to undertake TransCAP is to be determined by the date the Tier 2 acquisition program is commenced”.
This approach will also see the formalisation (at least in part) to a more permanent and “militarised” fleet responsible for the maritime border patrol and civil maritime security operations, culminating in a fleet of “25 minor war vessels” that will include “Navy’s requirement for six Arafura Class offshore patrol vessels (OPVs) and eight Evolved Cape Class patrol boats (ECCPBs), and 11 ECCPBs for Australian Border Force (ABF)”.
Additionally, the review articulates that the Evolved Cape Class patrol boats “best meets the operational need of the constabulary force in the conduct of civil maritime security operations”, while the Arafura Class OPVs are designated as an “inefficient use of resources for civil maritime security operations and does not possess the survivability and self-defence systems to contribute to a surface combatant mission”.
This shift will see the OPVs reduced from the planned 12 to six and transitioned from their initial planned role to focus on “civil maritime security operations and enhanced regional engagement in the Southwest Pacific and maritime Southeast Asia” while also providing a “surge capacity” to support “civil maritime security operations surge requirements in lieu of Tier 1 and Tier 2 surface combatants”.
However, the question, as with all Defence announcements of recent years, is the funding question, particularly in light of revelations that the government had “discovered” “in excess of $25 billion in unfunded cost pressures in the surface fleet acquisition and sustainment program” as planned.
Any plan is only as good as its funding
Given the proposed growth of the Australian Navy’s surface combatant fleet, we can expect that the corresponding funding would necessitate an expansion in the spending for the Navy.
As part of this, Defence Minister Richard Marles and Defence Industry Minister Pat Conroy confirmed that the “the Albanese government has committed to increase Defence’s funding in the 2024–25 federal budget over the next decade to ensure the enhanced lethality surface combatant fleet is fully funded”.
This will see the government “’inject” an additional $11.1 billion of additional funding over the next decade to “support the realisation of the enhanced lethality surface combatant fleet” and will be additionally supported by an “updated” Naval shipbuilding and sustainment plan to be released later in 2024.
This will also see the government invest an additional $1.7 billion over the forward estimates, apparently generated by the early retirement of the two oldest Anzac Class frigates and cuts to the Arafura Class program, with a total figure of $38 billion expected to be invested in the Navy’s “enhanced lethality surface combatant fleet” over the next decade.
Defence Industry Minister Pat Conroy reinforced the importance of this spending program, stating, “This additional investment of $11.1 billion over the next decade will provide confidence to industry and financial security for thousands of hardworking Australians.”
However, I am a little confused, as in this media release stated, “This additional $11.1 billion of funding for the future surface fleet alone brings both acquisition and sustainment investment in the fleet to $54.2 billion in total over the next decade.”
Meanwhile, the department’s own fact sheet, titled, “A larger & more lethal Australian Navy” stated the conflicting, “The Australian government will invest an additional $1.7 billion over the forward estimates and $11.1 billion over the next decade in Navy’s surface combatant fleet and Australia’s shipbuilding industry. This brings the overall investment in acquisition of Navy’s enhanced lethality surface combatant fleet to $38 billion over the next decade.”
So which is it?
Final thoughts
It goes without saying that we will be interrogating the minutiae of the surface fleet review over the coming months; however, it is important to recognise that the real work begins now.
Additionally, as part of this interrogation, we have to ask, have we got the balance right? Have we got the fleet disposition right? Or are there better alternatives for us to consider to maximise the efficacy and lethality of the Navy and broader Australian Defence Force as part of delivering “Impactful Projection” as articulated by the Deputy Prime Minister?
Ultimately, this comes back to the government’s shift away from a “Balanced Force” towards a “Focused Force” as championed in the Defence Strategic Review and the foundational problem that is our lack of clearly defined role and objectives for our own Defence capabilities.
This reality equally fails to account for the planned increase in ADF personnel by 2040 and places ultimate hope in a series of as yet to be developed autonomous systems, cyber or tactical weapons like HIMARs and others that are being shoehorned into fulfilling “strategic” roles to provide both “impactful projection” and deterrence against “any potential adversary”.
Importantly, no one has said that defending the nation in this era of renewed and increasingly capable great power competition will be cheap or easy and we have to accept that uncomfortable reality, because the alternative outcome is infinitely worse.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
