Federal Politics

EXCLUSIVE

Malcolm Turnbull leaning towards full-strength fleet of 12 submarines

The Turnbull government is leaning strongly towards building a full-strength fleet of 12 submarines rather than the reduced fleet of eight boats the Coalition was previously considering.

Fairfax Media understands the government is planning to honour the pledge made before the 2013 election to build 12 submarines over about a quarter of a century starting in the late 2020s.

In opposition, the Coalition led by Tony Abbott promised to build 12 submarines in Adelaide as a replacement fleet for the ageing Collins Class boats.

But in government, the Coalition began edging away from the commitment to 12 boats. The Defence white paper, which was nearing completion before Mr Abbott was dumped by his party for Malcolm Turnbull, reportedly planned for eight submarines, though it kept open the option for a further four down the track.

But it is understood that given the advantages of creating a large and permanent submarine workforce, the need to honour the Abbott-era promise and the strategic uncertainty Australia faces in the Asia-Pacific region in the decades to come, the Turnbull government is inclined to commit to the full 12 boats in the revamped white paper.

That major defence statement, which will lay out the nation's security plans for the next decade, is due to be released next month.

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Defence is running a "competitive evaluation process" to choose between rival bids by Japan, Germany and France to help design and build the new fleet. The largest defence project in Australia's history, it is expected to cost at least $20 billion to build the submarines and at least another $30 billion to maintain them – though cost estimates vary wildly.

The government is making it increasingly clear that the submarine project aligns with its focus on creating a more innovative and advanced economy.

"National defence is increasingly a national enterprise and not just the responsibility of the Defence organisation," Defence Minister Marise Payne said in a speech to the Australian Defence Magazine conference on Tuesday.

"Defence should and must leverage both the industry and educational investments made across Australia. What we ... need is flexibility, agility and a workforce with highly specialised skills to deliver the capabilities that will meet our defence requirements within the 21st century."

Senator Payne said the government would announce "this year" the winner of that contest but did not specify that it would be before the federal election.

The figure of 12 submarines goes back to then prime minister Kevin Rudd's Defence white paper in 2009. It was kept in the subsequent 2013 blueprint by Labor and adopted by the Coalition.

But concerns about cost forced the then Abbott government to rethink the need to commit to the full 12. It also backed away from the commitment to build in Adelaide until a concerted push by South Australian Liberal MPs forced Mr Abbott to set up the competitive evaluation process in which each of the three bidders must prepare an option for building within Australia.

Japan is offering a version of its Soryu Class boat, Germany is pitching a yet-to-be-built Type 216 design while France is bidding with a conventionally powered version of its nuclear Barracuda vessel.

Japan argues there are strategic advantages to its bid, given the common interests Japan and Australia have in maintaining maritime security in Asia in the face of instability caused by China's rise.

The US is generally thought to quietly favour the Japan bid, though sources have dismissed reports that the US, which will provide the combat system for the submarines, would withhold its most cutting-edge technology if Australia partnered with Germany or France.

Labor Defence spokesman Stephen Conroy said: "Malcolm Turnbull and Marise Payne must live up to their promise to build 12 submarines in South Australia."

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