The Australian Submarine Agency (ASA) is responsible for delivery of the country’s ambitious nuclear submarine program. It is fighting against governance challenges stemming from low internal morale and high and increasing consulting costs. The agency manages a diverse workforce of about 700, including nearly a dozen senior military officers. Instability on the inside of the organization has increased over recent months. The resignation in September of the agency’s senior director has only compounded the toxic effects on employee morale.
In his speech Defence Minister Richard Marles recognised these challenges, and noted a long-running review of the ASA’s governance. This review, conducted by Dennis Richardson, has attracted considerable public scrutiny, especially as the Australian government has invested $12.1 million into it. This initial review began with a $2.7 million, no-bid contract. It soon developed into a robust 11-month engagement with the Boston Consulting Group (BCG).
The ASA’s operational challenges are further complicated by an enormous cost, both financially and politically, of developing a greater Australian submarine industrial base. The state government recently contracted McKinsey—for $9.5 million—to help formulate an “industry plan” for building the state’s submarine workforce. Furthermore, approximately $1 billion has already been spent to expand U.S. submarine shipyards, indicating the scale of Australia’s investment in this strategic initiative.
Instability and Governance Challenges
However, the ASA’s recent turf wars within its leadership cast doubt on the ASA’s ability to aelt the AUKUS program, which currently stands at $368 billion. This program is particularly laudable as Australia’s defence capabilities are bolstering themselves in an ever-more dangerous worldwide climate. Angus Taylor, then shadow Defence Minister, mentioned his concerns about the agency’s direction in light of these concerns.
“If this agency is already struggling with morale, turnover and governance issues, that should be ringing alarm bells for the government.” – Angus Taylor
The senior director’s resignation has not only created a huge blow to morale but exposed deep governance flaws within the ASA. Taylor denounced the agency’s persistent woes, suggesting a lack of faith in the leadership of deputy prime minister Richard Marles.
“What has Richard Marles been doing while the agency responsible for our $368 billion AUKUS program has been left to drift? The ASA has only been in existence for a short time, yet already it is plagued with problems serious enough to require an extensive external review at taxpayers’ expense.” – Angus Taylor
Despite the lack of logic in such a move, there are a lot of external reviews occurring these days. Critics say the ASA is taking away money from basic operational requirements. Taylor highlighted this trend, warning that more consultancy contracts do not mean better governance or an improved capacity to govern.
“While it doesn’t have any submarines, it is producing review after review after review — at unknown public expense. It goes to show what a dangerous gamble this AUKUS project is and how much public money is being wasted on nuclear submarines we are likely never to get.” – Angus Taylor
Significant Financial Investments
The Australian government has provided significant financial resources in its 2020 Defence Strategic Update to improve its submarine capabilities. Equally as exciting was a recent announcement of a record $12 billion investment to expand WA’s Henderson shipyard. This is on top of the normal funds given to review macroeconomic impacts and other consultancy work.
This shipyard is already forecast to be crowded with five nuclear-powered submarines and more than 1,000 American personnel by 2027. The initiative’s strategic significance runs even deeper, as it fits hand-in-glove with Australia’s overall defense strategy in a quickly changing Indo-Pacific security environment.
The ASA remains focused on developing Australia’s submarine enterprise to build, operate, and maintain conventionally-armed nuclear-powered submarines safely. An ASA spokesperson made clear their determination to turn these words into real operational capability and workforce development to deliver on AUKUS goals.
“The ASA is committed to developing Australia’s broader submarine enterprise to safely build, operate and maintain Australian conventionally-armed, nuclear-powered submarines.” – ASA spokesperson
The creation of SRF-W is to be completed by 2027. That’s when U.S. nuclear-powered submarines are first expected to start rotating out of HMAS Stirling. This new initiative highlights Australia’s commitment to deepening its naval partnerships and specifically the AUKUS trilateral and enhancing Australia’s defence posture.
“Australia is on track to seeing the establishment of Submarine Rotational Force-West in 2027, when US nuclear-powered submarines will begin rotating out of HMAS Stirling.” – ASA spokesperson
Future Directions and Strategic Importance
The ASA’s ability to navigate its current challenges will play a critical role in fulfilling Australia’s defence commitments under the AUKUS agreement. Australian Prime Minister Anthony Albanese is preparing, as Australia’s leader, for a meeting with U.S. President Joe Biden on October 20. AUKUS will be front and center in their discussions, too.
With stakes as high as ever, Australia is in urgent need of sharpened defence capabilities. As our national defense experts have consistently cautioned, we face the most dangerous strategic environment since World War II. The future success of the ASA will depend on better governance and morale among its members.
Defence Minister Richard Marles was clear about the significance of the review into governance. He reiterated that the lessons learned will strongly shape any future decisions regarding how the agency operates.
“very much informing the decisions that we will take” – Defence Minister Richard Marles
The ASA is already in the market for this specialist expertise, specifically to help deliver and implement the AUKUS program. At the same time, accountability and efficiency are the name of the game right now with the public. Greens senator David Shoebridge noted the massive fiscal black hole associated with these agency-hopping consultancy crusades. First, he sounded the alarm on how money is being prioritized.
“sucking in hundreds of millions of dollars” – Greens senator David Shoebridge
