With South Australia already reeling from impending manufacturing job losses, calls grow to sink the PM’s plan to send submarine building offshore. By Max Opray.

Subs division

Last month, in front of the barbed-wire fence of the ASC (formerly the Australian Submarine Corporation) building in Port Adelaide, more than a thousand protesting workers watched on as a man who wishes to become prime minister climbed aboard the back of a flatbed truck and started yelling at the top of his lungs. Opposition Leader Bill Shorten began with aggressive positivity, roaring: “Under Labor, we will build ships and submarines in ’Straya, because we love this country!” 

In a hoarse ocker rant and with all the passion of a riled-up barfly, Shorten slowly descended from sentimental chest-beating into the deepest, darkest fears of his audience. For starters, there was the very real prospect of those present losing their collective livelihoods. The Abbott government is backing away from a pre-election promise to build a new generation of submarines in South Australia, as the Collins class had been. An off-the-shelf Japanese design has been mooted as the new frontrunner for what would be the most expensive defence undertaking in Australian history. 

If the Sōryū option does indeed win out, it will surely salt the economic earth of northern Adelaide, an area already devastated by Holden’s federal government-prompted decision to move car manufacturing overseas. Some workers in the shipbuilding industry privately believe the Japan option has been floated as a kind of ruse to scare local suppliers into reducing their prices, but few doubt the federal government’s resolve if it decides outsourcing the work would prove substantially more cost effective.  

So in his speech and subsequent press conference, it was of no surprise to anyone that Shorten lashed out at “Torpedo Tony” for breaking promises, killing jobs and so on, but the leader of the opposition took the rhetoric even further. There was another fear to capitalise on, one conveniently stoked by Tony Abbott himself for the government’s own political ends: the humming, all-pervasive climate of xenophobia supercharged in recent months by the PM’s relentless advertising of threats to national security.

In a brazen act of political judo, Shorten attempted to seize Abbott’s greatest strength and use it against him: how could the government entrust our nation’s security, under siege as it is, with the Japanese, of all people? The Labor leader wasn’t quite as explicit as the onlooker in the crowd who interjected with the observation: “The last time we had Japanese subs in Australia they were in bloody Sydney Harbour.” But Shorten wasn’t far off, merging as he did thunderous nationalism with references to the Abbott government’s “short memory” regarding merchant ships sunk off Australia’s coastline during World War II. Never mind that for more than half a century now Japan has been one of Australia’s closest regional partners, a free and open democracy devoted to pacifism. According to Shorten, these are uniquely “uncertain times” and foreign nations are not to be trusted.

Shorten’s speech not only signalled the return of “yellow peril” politics: it also helped push the government’s submarine about-face from a matter of niche interest into a major talking point around the country. Previously of concern mostly to defence industry wonks and South Australian economic forecasters, the Future Submarine Project has since been closely tracked by the nation’s media, even though the defence white paper decision on the contract is not due until the middle of next year. 

Whichever way the government leans, Australia will be making an enormously expensive decision. It is a choice framed within tight parameters: first, that a new generation of submarines would indeed be worth investing in to take over from a Collins-class model slated for decommissioning in the mid-2020s, and second, that nuclear-powered submarines are not to be used. This latter stipulation leaves but a few diesel-electric vessels capable of patrolling Australia’s far-flung maritime interests, with the Sōryū the only option currently in operation.

Price estimates for 12 Australian-designed-and-built subs vary, with the National Institute of Economic and Industry Research suggesting $21 billion, while the Australian Strategic Policy Institute has projected $37 billion. The Sōryū would cost at least $20 billion, with none of the figures accounting for ongoing maintenance, which would likely take place in Adelaide either way, and could triple the overall outlay. A locally devised submersible would certainly bring dividends in Australian jobs and a self-sufficient national security supply chain, but probably wouldn’t match or exceed the capabilities of what the defence industries of bigger nations with larger budgets could offer, particularly considering how Australia’s last attempt played out.

In its early days in the mid-’90s, the Collins class was a national laughing stock, beset by problems more unlikely than the Irish invention gag about the submersible fitted with windscreen wipers. The Australian-made submarine flooded when under water, made too much noise to travel undetected, and featured an obsolete combat system, to name a few of the issues. The major kinks have been ironed out, but that isn’t to say more problems won’t emerge in a new design, as opposed to technology already put through its paces.

Defenders of the Collins class say the media amplified its teething problems, and that switching to an overseas model would be a foolish waste given the domestic submarine industry is only now finding its feet. And then there are the myriad issues brought up by the Japan option. 

Frank Owen, secretary of the Submarine Institute of Australia (SIA), pointed out to me that Japan’s postwar commitment to using military capabilities only for self-defence – until recently a policy enshrined as a constitutional requirement – was a major giveaway as to why the Sōryū would not be suitable for the lengthy voyages routinely undertaken by the Australian Navy. “The Japanese designed and evolved their subs to meet their specific requirements, to operate undetected but within reasonably close range of the Japanese islands,” he said.

The SIA is one of a raft of organisations to have made submissions to a senate inquiry into the future of the Australian shipbuilding industry. Perhaps the most notable contribution to the inquiry so far has been from Dr John White, one of the Coalition’s key shipbuilding advisers, who claimed that buying Japanese-made submarines wouldn’t be cheaper at all, and in fact could be up to three times more expensive than building them locally, when factoring in additional training and maintenance costs brought about by unfamiliar technology.

A cluster of South Australian-based Liberal backbenchers have backed White’s call for an open tender process to keep all parties in the loop, a suggestion dismissed by the government as inappropriate for a matter as sensitive as submarine procurement. The South Australian Labor government has also thrown its support behind the idea, and this week held a summit with key stakeholders at Parliament House in Adelaide to discuss the state’s submission to the defence white paper. 

Martin Hamilton-Smith, the state’s defence industries minister, claimed his federal counterpart, David Johnston, has already travelled to Tokyo to visit Japanese defence minister Akinori Eto and sign a technology exchange agreement. “I am ambivalent whether our new submarines are a Japanese, German, French or Swedish design, as long as they are built by South Australians after a considered tender process,” he said.

The Abbott government has denied making a decision on the project before the white paper is complete – rash election promises notwithstanding – and other parties appear to still be in the hunt. German firm ThyssenKrupp Marine Systems (TKMS) sent a delegation to Canberra last week to put forward an offer it hoped would appear less politically toxic than the Japanese option. TKMS claims its design could be fully constructed in the ASC shipyards in Port Adelaide, if so desired.

Most jobs from the project will flow from construction and maintenance, not design, so such an arrangement would certainly give Labor less ammunition to fire at the government. And although Germany was just as much a wartime foe as Japan, Shorten certainly wouldn’t be able to indulge in the same kind of racial fear mongering, particularly given South Australia’s Germanic heritage. After all, there’s no yellow peril in a white submarine.

This article was first published in the print edition of The Saturday Paper on October 25, 2014 as "Subs division".

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Max Opray is Schwartz Media’s morning editor and a freelance writer.

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