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Monday, 20 May 1985
Page: 2178

Senator MacGIBBON(6.10) —I take this opportunity on the second reading of Appropriation Bill (No. 3) 1984-85 and Appropriation Bill (No. 4) 1984-85 to speak briefly on a few topical points in relation to defence. I will deal with the three Services first and then the Department of Defence in the few minutes I have to speak before dinner.

The first Service I want to deal with is the Royal Australian Navy. I wish to make some comments about the new submarine for which there is supposed to be a project definition study announced this week, after many months of delay under the Labor Government. I regret that I have to make these comments without having the benefit and the privilege of a brief from the Royal Australian Navy. The Liberal Party and National Party defence committee had scheduled for last Wednesday a brief from Captain White and some of the officers of the RAN. At the last minute this brief was withdrawn by the Minister for Defence (Mr Beazley) without any reason being given. We find that rather strange because not only has the Labor Party been briefed, but also briefs have been given all around the country to industry groups and interested groups by the same team. We find it a little strange that this courtesy was not extended to the Opposition parties. The Caucus had a massive brief from the same team and it also went to the extraordinary length of having the contractors for the hulls and propulsion systems and the contractors for the weapons systems presented before them. I think the problem was that the Minister for Defence is due to make an announcement this week and he was so insecure that he did not wish the possibility to arise that anything that might be said by members of the team could be used against him by the Opposition. Be that as it may, I now move to a brief comment on the replacement submarine.

A deal of debate has been provided by the Labor Party in recent days in relation to this contract. It is for the basest of motives; it is purely for pork barrelling-Labor Party members are looking for the work to go to their own States. There is no concern at all for what might be best for Australia's defence. We have had proposed by the Labor Deputy Premier of Western Australia an absurd scheme that the submarine be built in modules. It shows the extent of his ignorance that he could possibly float the idea that submarines could be built in 500-tonne modules and freighted thousands of miles around Australia to be put together. Aircraft can be built in sections, if the volume production run is large enough, and transported and put together at one site, but submarines are not designed for modular construction. The hull is a unit and it cannot be broken up into sub-units. The whole idea is a nonsense.

The submarine contract clearly falls into two parts; the hull and the propulsion system are one and the weapons system is another. The weapons system is an electronic system of great complexity, and all the electronic industries in Australia are situated in South Australia, Victoria and New South Wales. They will get the offset work and the production work for the weapons fit of the submarines, whatever happens, because the outlying States of Tasmania, Queensland and Western Australia do not have that capability. As I said on a previous occasion, provided all other things are equal, on the grounds of sharing the work around Australia, the case for the hull and propulsion unit should go to wherever the boat can be best built. That is quite clearly Queensland, because the most efficient shipyard in the country is that of North Queensland Engineers and Agents Pty Ltd.

The importance of the submarine contract cannot be overestimated. Since the Labor Party embarked on its very intemperate decision to get rid of the carrier and the fleet air arm, which was not in any way at all a consequence of getting rid of the carrier, the offensive capability of the Royal Australian Navy has rested very heavily on the submarine force. I am not preaching that the submarine force is a substitute for a surface navy in any sense at all. There are great limitations for submarines particularly in regional operations. Surface ships are very important for any conflict we have in the archipelagos to the north or west of Australia. The sort of surface ship we need there, as Senator Hamer said many years ago in this place, is not a ship of the size of a DDG or something like that, but something of the size of 2,500 tonnes to 3,000 tonnes which has a high turn of speed and considerable endurance to perform the role of a policeman on the beat. But in the absence of a carrier, the primary offensive capability rests with the submarine force, so it is important that, if we are to buy some submarines, we get the best we can.

There is no question at all that if we were buying new submarines with an open mind we would be buying a nuclear-powered submarine. We would not be buying them tomorrow; we would look at the design for another four or five years before anyone starts cutting metal, and it would probably take eight years before we got possession of the first one. Those submarines then would be in service for a period of 30 to 40 years beyond that; to the year 2020, when none of the present members will be in Parliament. We have to look at the technology that is likely to exist then. Speed is of great benefit in the transit role of getting from Australia to the theatre of operations, wherever they may be-passage distances of 3,000 and 4,000 miles perhaps. The ability to cover that distance quickly is very important and the ability to stay on station without the need for refuelling is also critical. On these grounds the argument is overwhelmingly for a nuclear-powered submarine.

I recognise that to buy nuclear-powered submarines at the present time would be an horrendously expensive program, because this country does not have the industrial infrastructure in nuclear engineering to support them. That is a sad commentary on the short-sighted decision of many years ago to abandon the building of a nuclear power house at Jervis Bay. That was proposed under the Gorton Government. Had Australia gone ahead with that correct decision to build a nuclear-powered electricity generating station at Jervis Bay, we would now have the nuclear engineering infrastructure to enable us to support nuclear submarines. If we were to go ahead now, when we have none of that support, it would have to be introduced at great cost for a special and restricted purpose, and it would be unfair to load that cost on to the Royal Australian Navy or the Department of Defence.

I come to the design of the new boat. The Navy has its mind set on buying a new boat. There is a very real case to be made out for upgrading the present O class boats that we have. The advantage of the O class boats is that they have a far greater range than the contemplated new submarines would have. Their sensors would probably be better than the sensors proposed to be fitted in the new submarines-there are technical reasons for that which I am not prepared to go into in public. They certainly have more torpedo tubes than the new boats, and given the new weapons systems we have, particularly the Harpoon missile, it is highly desirable to maximise the number of weapons which can be fired in a salvo. There may be good tactical reasons in an underwater attack to fire the maximum number of missiles which can be launched in one salvo. There are other reasons, such as the great flash and smoke signature from firing a Harpoon, when one does not want to advertise the submarine's position at repeated intervals by firing missiles sequentially.

There is a very good case to be made out for the O boats. The problem with the O boats is that their hull equipment goes back to the 1950s. The spare parts position is difficult. I would have thought there was a very good case to be made out for re-equipping those boats. They have all gone through survey. On inspection the hulls, apparently, have been found to be in excellent condition. They could have a life of 40 years, so there is quite a bit of life left in them. With new equipment one could have increased performance, more space and improved habitability for very much less cost than would be the case with the new boats. Whilst the first Oberons were bought for $10m, we are looking at a project cost of $150m for each new boat, and for a fleet of six we are looking at about $1.5 billion. This is not petty cash; it is a big expenditure. My argument would have been that there was a case to upgrade the systems that we already had, pending the time that nuclear support came to the country and we could head in the direction in which we should be heading.

I turn to the Navy's position. It is very keen to buy a new boat, irrespective of the advantages or disadvantages. If popular rumour is to be believed, the chosen boat will be the German HDW-IKL design, with the Swedish design by Kockums put up as a weak contender so that the HDW would come out ahead. Neither of those designs has been built, and one of the requirements of the contract was that the tenderer had to come up with a design that was already in production. All the designs that have been considered by the Navy are extensive modifications of boats that have been built only in small numbers or not built at all.

The best of all designs seems to be the Vickers Shipbuilding and Engineering Ltd 2400 series, which is being built for the Royal Navy. The Royal Navy has said that it is prepared to modify its boats as they come down the line if Australia is prepared to buy them. So we would get commonality of equipment. We would get a spread of the research and development costs across the two fleets, and most importantly, a fleet would be operated by the RN as well as by the RAN so there would be spares support in the future. Added to those advantages has to be the fact that the Royal Navy is operating nuclear submarines and Britain has far greater experience in submarine construction than any other European power. The benefits of advanced nuclear engineering will be manifested in the conventionally-powered boats that Australia will have built. Unfortunately, there is an intense anti-British bias in the RAN at present. Once upon a time it used to be the other way round-the RAN was blindly pro-British-but for reasons that I do not understand we now have intensely anti-British bias in the RAN and nothing emanating from Britain can be considered in any way at all.

I have great reservations about what looks like being the successful design to be announced this week by the Minister for Defence. It is a paper boat; it will be an orphan boat and indications are that it will have severe technical limitations. It will be considerably shorter on range. It will have fewer torpedo tubes, and there are very real reasons to doubt whether the weapons system-the sensors-we presently have in the Oberon boats can be fitted successfully to this new hull. Even if this can be done, the integration of electronic systems is something that involves an enormous amount of work. One cannot take a system that works well and throw it into a hull, whether it be an aircraft's hull or a ship's hull, and expect it to work perfectly in the way it works in another setting. We are looking at development costs that run into tens or hundreds of millions of dollars and years of work to get over that.

Another topical point in relation to the Navy that I wish to comment on is the proposed removal of the amphibious squadron-the LCHs and HMAS Tobruk-from HMAS Moreton in Brisbane and its transfer to Sydney. This is absolutely nonsensical. It is a cost saving move by the Labor Government and it will deny a training capacity that is important in the national interest. Under the present scheme the 6th and 7th Brigades in Queensland are tasked with development and training in amphibious warfare. In New South Wales, at Holsworthy, there is the 1st Brigade and it is tasked with parachute operations and mechanised infantry. To close HMAS Moreton, purely on the basis of costs, not on logic or operational efficiency, and to transfer those ships from Brisbane is absolute nonsense and is very short-sighted.

The second Service I wish to deal with is the Australian Army. The Army is suffering enormously from poor funding. As I said here many years ago, there is a basic belief in the Parliament that all that each member of the Army needs is a rifle and a pair of boots. But the need for high technology weapon systems in the Army is as great as it is in the Royal Australian Air Force or in the Navy. The difference is that the unit cost of the equipment required is smaller. It may be $500 or $5,000 as against $50m or $500m for a ship. The need is there and is not being met. It is undramatic, but one simple example I can give honourable senators relates to the need for night fighting capabilities. Any army today will fight at night. To do that it must have night vision goggles. I do not think we have any in this country. If we do, we would have half a dozen purely for experimental purposes. The Army needs high technology equipment and that need is not being met.

My second point in speaking on the Army relates to the Army Reserve. The Army Reserve is now in a disastrous state. Only last week we heard the Minister talk about the integration of the Army Reserve into the permanent Army. That is Liberal Party policy. I am glad the Minister is implementing it because it is important, with the small numbers we have in the Army, that we have one army. There is no case for a permanent army and a reserve army. I applaud that move but the Reserve is now almost completely destroyed. It has a nominal strength figure of 30,000 members. In an Estimates committee hearing held in this chamber a couple of weeks ago, departmental officers admitted to the strength of the Reserve being around 24,000 to 25,000. That is an incorrect figure. It is a meaningless figure. I do not doubt that if we were to audit the books of all the units in the Reserve in Australia, we would find names and numbers equalling 24,000 or 25,000 reservists.

The important factor is the number of efficient soldiers in terms of the Army definition. To comply with the Army definition of 'efficient' a soldier must do 28 days training a year, of which 16 are spent in a camp, and must qualify on a weapons course. Very few people miss qualifying on a weapons course. I have talked to members of units, to adjutants and to commanding officers around the country. They told me that if, for example, a unit has 430 members of the Reserve on strength, only about 280 turn out to camp. I suspect that is the true figure around the country. My estimate is that of the efficient members-'efficient' means active, willing participants in the Army Reserve-we are probably looking at a figure of around 12,000 to 14,000 in Australia today. Out of a nominal figure of 30,000 that is terrible. What is going on?

The first thing that happened was the decision to tax Reserve payments. That was disastrous. People do not join the Reserve to get money tax-free, but the tax-free payments were very important because many people with specialist skills-whether they came from the transport industry, from professional services, such as accountancy, or the health services-joined the Reserve out of a love of doing something worth while for the country. While they were in camp for the required 16 days a year, they used the tax-free money to put people into their jobs. Most of them were self-employed; they were individual operators. Because they cannot get that money tax-free, they are now losing very heavily by being members of the Reserve.

The other day I talked to a senior captain, who is on the highest rates of pay. He told me that he was in camp this year for 30 days and he received under $600 in his hand at the end of the month. On the basis that he is probably paying $600 a week for someone to replace him in his own job, he is losing and is losing very heavily. The decision to tax the Reserve was one of the stupidest decisions that this Government made. It does not save money. It has driven out the capable people in the Reserve forces and it means that many of the people who now join the Reserve are public servants. I have nothing against public servants, but it has to be recognised that a large number of public servants are in protected or reserved occupations. So if we have a war or an emergency, the people who have been trained in the Reserve will be unavailable.

The second thing that has upset the Reserve is the freeze on pay for 3 1/2 years, which is absolutely inexcusable. The third factor is the way allowances have been dropped. Once upon a time if members of the Reserve were camped out in the bush they got paid something extra-it was not terribly much; it may have been only $70 or $80 a camp-but that is now unavailable. On top of that, they experience the nitpicking, sticking to rules, and general frustrations of operating in an organisation that is held in contempt by the government of the day and seems to have no purpose in life. So we have had an exodus of many people from the Army Reserve.

Sitting suspended from 6.30 to 8.p.m.

Senator MacGIBBON —I now wish to turn to the Royal Australian Air Force, and I comment first of all on the historic delivery flight on Friday last week of two FA18 aircraft that were built in America for the Air Force. They flew non-stop from Naval Air Station Lemore in California to Williamtown in New South Wales. It is a great tribute to the airmanship and the organisational ability of the Royal Australian Air Force that that trip was completed without a hitch. It is also a great tribute to the capabilities of these aircraft that they flew non-stop from America to Australia and that it would have been possible, just by refuelling and arming them, to put them immediately after that long flight into service with all their systems operating.

The delivery of these aircraft marks the start of a new era in Australian Air Force capabilities because in the FA18 we have a very worthy partner for the F111, which is the finest heavy long range strike aircraft in the world. The FA18 has enormous versatility. It is the best air superiority fighter and close support aircraft in the world. It is a generation ahead of anything else and, most importantly from our point of view, as well as this great flexibility in roles that it can perform it is very easy to maintain. The maintainability of this aircraft is in a different dimension from anything else we have in our inventory.

The interesting thing about the flight was that the aircraft were refuelled 13 times in the air. The fact that they were refuelled 13 times is not significant because it is part of the peacetime doctrine that such aircraft never operate with less than two-thirds of their normal fuel load. They probably could have got by with well under half the number of refuellings that took place. The important point is that they must have an airborne refuelling capability because that capability is a design characteristic of both the F111 and the FA18. The RAAF does not have that capability. It does have four Boeing 707s which were purchased primarily to be airborne tankers but the Government has not proceeded to buy the kits for them. If they are converted to tanker aircraft they do not lose any of their capability as freighters or passenger aircraft because no tanks go in the fuselage. The kits are added to the aircraft.

There are two different kits-the probe and drogue kit for the FA18, which costs about $1m or $1.5m per aircraft to fit up, and the boom refuelling gear for the F111s, which would cost between $10m and $12m. So for something like $50m to $60m the RAAF could have air refuelling capability. It is most important that we have that capability. The project costs for the FA18s will be $3 billion to $4 billion and not to spend $50m or $60m to give us an air refuelling capability is being penny wise and pound foolish. It is important that we have that facility, and it is important that we have it as the F-18's come into service because we should develop the doctrine and the training for those refuelling operations rather than leave it till we get to an emergency. The provision of an airborne refuelling capability for the Air Force will allow us to use the maximum design potential of both the FA18 and the F111.

The aircraft also need an airborne early warning capability. The ANAPG65 radar in the FA18 is the standard by which all fighter aircraft radars are judged. It is the most advanced, most sophisticated in the world but it is still essentially a short range radar set. One cannot vector over long distances with this unit; it would have a range of roughly 50 miles but with our coastline and great area we have to cover thousands of miles. It is impossible to dispatch an FA18 and let it search by itself; it has to be guided to its intercept, to its target. For that we need either ground based radar or airborne radar. Because of the huge capital cost for ground based radars covering all of Australia, we come down to an airborne early warning capability and airborne surveillance. There are only two suitable aircraft available-the Grumman E2C, which is an old short range Navy aircraft which would probably cost about $60m to buy, and a Boeing E3A, which was based on the Boeing 707. The latter is a very expensive aircraft which would probably cost between $150m and $200m. The Lockheed company has come up with a proposition whereby the P3C, an aircraft already in service with No. 10 and No. 11 RAAF squadrons as a long range maritime patrol aircraft, could be built as an AEW aircraft. It has already flight tested the aircraft with the radome on it and there are no aerodynamic problems. I estimate it would be possible to acquire this aircraft for between $40m and $60m. Lockheed would be prepared to provide the bare airframe to us and the Australian industry could provide the electronic fit precisely as the Air Force required. That is something on which this Government should move, and it should move very smartly because until we get that AEW facility the great capabilities of both the F111 and particularly the FA18 cannot be used.

The third point concerning the Air Force that I wish to raise is the trainer program that is presently running, and running disastrously. There is no doubt that the trainer program should be abandoned. It seemed like a good idea at the time some years ago when it started. It was a simple design exercise but it has gone out of control. We have an aeroplane that is being built to do everything. It is getting very big and heavy, it is over a year late and it is costing the earth. The Auditor-General's report of October 1984, released a couple of months ago, said that the price of this program now had gone past $281m in October 1984 figures. That is the cost for 69 aircraft, which gives us a figure of over $4m a unit. Bluntly, we cannot afford that sort of money for an aeroplane that is a year late, has not flown and probably will not ever fly. One thing about business is that when a deal goes bad one has to have the courage to cut one's losses and get out. Even though we have spent $34m and have nothing to show for it in the form of a flying aeroplane, let us be men enough to take our medicine and cut the program. We must recognise that we are on a losing deal; we are on another Nomad project. We must get out of it. Other aircraft are available, such as the Brazilian Turcan or the Pilatus PC9. They will carry out the role required better than the Australian trainer. The Royal Air Force has bought the Turcano. Its choice was the PC9 but the British Government, under Margaret Thatcher, is selling Shorts as part of its privatisation program. The Shorts firm has a co-production agreement with Embraer in Brazil, so Britain bought the Turcano against the advice of the Royal Air Force, which preferred the PC9. The PC9 would be available, I estimate, for between $1m and $1.75m in this country, so we could probably pick up on this deal around $150m. That could give us the AEW aircraft.

I had intended to say something about the Department of Defence but there simply is not time tonight. I will confine my remarks to saying that the Department of Defence continues to blunder along with the great incompetence that it has manifested ever since the Tange report was implemented. It employs between 32,000 and 36,000 people. It is just an enormous debating club which has as its doctrine: 'Let's do nothing, let's obfuscate the interests of the Services, let's do nothing to enhance the operational capability of the defence forces of Australia, let's have a reduction in capability, let's paralyse the whole system'. I hope the report that has been commissioned by the Government will provide us with a way of reducing very much the influence of the civilian component of the Department of Defence in the Department's operations. It is an absolutely fundamental flaw to have the Chief of the Defence Force equivalent with the Secretary to the Department. I do not say that in a personal way; personalities do not enter into it. In the Chief of the Defence Force we have a man who is vested with the responsibility of defending the country, but the administration of the Department is shared equally between him and the Secretary. We cannot divorce administration from the responsibility of Executive control. That is the Department's fundamental flaw; it is one that must be corrected at a future date.