Australia's Amphibious Capability
AN ESSAY ON the OPTIONS FOR the ADF TO strike the correct balance between the development of a joint amphibious capability and the raising, training and sustaining of the rest of its suite of capabilities?
By U5172061
Introduction
The Department of Defence is currently facing one of the most challenging situations since its conception. On one hand, the environment suggests Australia is entering time of increased strategic competition between major powers in our region.1 This has the potential to create a variety of possible futures for the country, some of which will include the emergence of significant threats to our national interests.2 On the other hand, the Government has moved to reduce the Defence budget significantly.3 There are …show more content…
suggestions that fiscal constraint will be a continuing theme for Defence regardless of the outcome of the next election.4 The times of significant investment in the Defence portfolio that occurred under the Howard government are over. However, the decisions taken during the period have committed Defence to a number of very expensive long-term capability development programs that are contrary to the fiscal environment.5 Defence will have to be very careful considering the types of capabilities it will develop to ensure it is capable of meeting future challenges of the Asian Century.
One of the largest capability programs undertaken in the last decade is the Amphibious Development and Sustainment (ADAS) Program. The program consists of five phases and will significantly enhance the ADF Amphibious Capability. Embarked force lift will more than double and lane metres for vehicles and equipment will increase by almost four times what was available with the LPA class vessels in-service.6 The enhancements to capability will allow ADF participation in operations that were previously not possible. There are numerous discrete levels of capability possible for the future Amphibious Capability; however, realisation of the more demanding possibilities will require significant investment in associated force protection capabilities, doctrine and training.7 This investment will have an opportunity cost elsewhere in the ADF and requires careful consideration by Government and Defence.
This essay describes four major possibilities for the ADF to balance the opportunity cost of the development of the Amphibious Capability. Firstly, careful consideration of strategic guidance against fiscal reality will inform the Government’s decision on the readiness levels and capacity of the amphibious capability developed by the ADF. This will ensure the level of investment is commensurate with strategic requirements, and the opportunity costs are balanced against the development of other capabilities. Secondly, engagement with allies to develop concepts for the integration of the ADF Amphibious Capability into coalition task forces, and leverage off their experience, will provide opportunity to reduce the cost of developing the more demanding levels of amphibious capability. Thirdly, careful scheduling of Amphibious Capability development to deconflict with the resource demands of other major programs, will avoid substantial peaks in demand that are unaffordable given current budget constraints. Lastly, within a constrained environment where available resources are insufficient, the ADF can reduce the opportunity cost of developing new capabilities by improving the efficiency of the entire portfolio.
The essay initially discusses the defence portfolio during the time of the development of the Amphibious Capability to establish context. A discussion of the Amphibious Capability follows, including the possibility of developing discrete capacity and readiness levels. This highlights the potential opportunity to balance the opportunity cost of Amphibious Capability by only developing the level of capability required by strategic circumstances. The essay then discusses the rationale and impact of employing the ADF Amphibious Capability as part of a larger coalition, highlighting the force protection and support capabilities that coalition partners could provide. It also discusses the need to schedule the development of the Amphibious Capability considering the resource impost of other major programs. The essay concludes discussing some of the options for achieving efficiency in the ADF portfolio and the balancing effect of this efficiency.
Defining Capability
There are many definitions for capability. The Defence Capability Development Handbook describes it as ‘the capacity or ability to achieve an operational effect’.8 Andrew Davies has proposed a more practical definition as ‘credible military options available to government that allow it to pursue its policy aims when other means aren’t sufficient’.9 He further posits that credibility implies the ability to complete a task with sufficient capacity, at the appropriate time, against a specific adversary in a way that is evident to others.10 Government funds the ADF in order to have military options at its disposal, especially during emergencies and crises. The amount it spends depends on the perception of strategic risk and the financial circumstances of the time.11
Fundamentally, the cost of a Defence capability is a measure of the amount of government funding it consumes. However, it is important to understand there are more components to cost than the fiscal component. When this essay refers to cost, it refers to the complete cost of a given capability. That is the total amount of resources required to implement that capability. Defence uses a fundamental input to capability (FIC) construct to describe the elements of a capability. They include Personnel, Organisation, Collective training, Major systems, Supplies, Facilities and training areas, Support and Command and management.12 Detailed analysis of the FIC provides insight into the major areas where the cost of developing and sustaining a particular capability will compete with others. These areas include workforce numbers, particularly critical skill sets, individual and collective training time and facilities, available budget, critical support assets and critical supplies.
The Defence Portfolio during Amphibious Capability Development
The Defence portfolio is one of the largest and most complex in Australia. It is one of the major components of the government portfolio. It involves the acquisition and sustainment of advanced technology intended to provide a capability advantage over other countries in the region.13 The latest Australian government budget outcomes for FY 11-12 stated the cost of Defence during the year to be $21.692 Billion. This was the fourth largest government function listed behind social security, health and education.14 The acquisition of advanced technology is a source of complexity and technical risk for Defence. The DMO engaged one of the leading project management research organisations, Helmsman research services, to assess the complexity of Defence projects against other sectors. The primary finding was that ‘on the Helmsman Scale of Complexity the complexity of Defence projects rank one level higher compared to the other Australian projects’.15
The LHD capability acquisition and implementation is one of the more complex programs currently occurring. The program is but one element of the Amphibious Capability, which requires outcomes from several other defence programs for support and force protection. The program commenced in 2005, after a decision from government to acquire the LHD. The program is currently scheduled to last 15 years, with the last components implemented in 2020.16 This period is one of intense activity in the Defence portfolio with several very complex and expensive capabilities planned for introduction. These include the Joint Strike Fighter, Air Warfare Destroyer and Future Submarine Capability. Alone these capabilities could cost the government more than $56 Billion.17 In addition to the financial component, each capability will compete with the Amphibious Capability for other critical resources, such as work force and industry capacity. Several of these programs are important to the successful employment of the Amphibious Capability in more demanding scenarios. All of these programs will compete for resources and effort to introduce and develop effective outcomes.18
In May this year, the government announced a substantial reduction to the Defence budget throughout the forward estimates period out to 2015/16. The reductions amount to $5.5 Billion and will exacerbate the funding pressure from previous initiatives such as the Strategic Reform Program and rising operating costs.19 Most savings came from reductions in capital investment, $3 billion from equipment purchases and $1.2 billion from facilities. A further $438 million is being taken from administrative savings along with $360 million from cutting civilian workforce by 1,000 over two years.20 The immediate effect of these reductions has been the cancellation or delay of some major programs, but the full extent of the impact is yet to be fully determined. It is clear that increasing cost pressure will necessitate balancing the introduction of expensive new capabilities, such as the Amphibious Capability, against the raising, training and sustaining of the rest of the ADFs suite of capabilities.
The Amphibious Capability
The ADAS program (JP 2048) will provide the core of the ADF Amphibious Capability. The program will deliver a new fleet of watercraft, two amphibious assault craft and a strategic sea lift capability between 2008 and 2020.21 Phase one and two as originally scoped are either complete or cancelled.22 Phase three will provide amphibious watercraft that will integrate with LHD and be able to transport personnel and equipment from large amphibious ships to shore without utilising fixed port facilities, or prepared landing areas. Phase four will deliver the backbone of the Amphibious Capability delivering two Canberra Class LHDs and a sealift vessel. At present, there is no funding allocation for the sealift vessel, but the HMAS Choules procured under JP 3030 could be modified to meet the requirement.23 Phase five will ‘support mobility and lift tasks within austere littoral environments. The capability will augment larger amphibious vessels or conduct small-scale regional amphibious operations and will replace the ageing Balikpapan Class Heavy Landing Craft (LCH)’.24 The program is currently facing a significant number of challenges, including substantial budget and concurrency issues that make the potential opportunity cost of the capability more significant.25
Although, the ADAS program will provide the core of the ADF Amphibious Capability, there are many other related capabilities required to employ the capability on the battlefield.
‘Amphibious operations typically, and arguably uniquely, involve the close integration of all three Services and a number of other government agencies’.26 The ADF has developed a strategic level concept for the employment of the ADF Amphibious Capability titled Australia’s Amphibious Concept (AAC). The AAC describes the Amphibious Task Force (ATF), which represents the combination of the respective Services’ force elements and operational concepts.27 The ATF includes two discrete levels of capability, the Amphibious Ready Group (ARG) and Amphibious Ready Element (ARE). The ARG is to be capable of the full suite of amphibious tasks. The ARE, potentially as a sub-element of the ARG, is primarily focussed on the conduct of Humanitarian Assistance and Disaster Relief or NEO missions at very short notice.28 Both ARE and ARG include a force protection element tailored to the threat. A pictorial representation of the ARG and ARE is included in Figure 1 …show more content…
below.
Figure 1: Pictorial Representation of ARG and ARE
The AAC also describes the threat environment for the possible employment of the ATF. ADF expeditionary forces operating in the littoral environment face threats of varying intensity and sophistication, in circumstances ranging from permissive to hostile.29 Threats to ADF expeditionary forces include anti-ship missiles, long-range artillery, fighter-ground attack aircraft, man-portable air defence, fast attack craft, submarines and mines.30
Analysis of the ARG / ARE concept and the threat environment suggest three main scenarios for the employment of the Amphibious Capability. Humanitarian Assistance / Disaster Relief (HADR) in a permissive environment, opposed amphibious lodgement against a low capability adversary and opposed amphibious lodgement against a high capability adversary. Each of these scenarios requires different force structure and effort to establish effective doctrine and force element cohesion. The difference results from two main factors, the scale of the task and the size and capability of the threat. HADR employment would predominately involve the core elements of the ADAS program. The amount of assets involved could be scaled according to task, but would not normally require deployment of force protection assets. There would be some effort required to develop a cohesive force for this task, but significantly less than more demanding scenarios. An amphibious lodgement against a limited adversary would require the elements employed for HADR, plus force protection capabilities commensurate with the threat. However, it will not involve the full range of force protection assets required against a high capability adversary. The integration of some force protection would increase complexity and require more effort to develop a cohesive force. The most demanding scenario against a peer capability would involve the commitment of a large proportion of the ADF, including the employment of advanced force protection capabilities, like fighter aircraft, submarines and AWD. Substantial effort would be required to achieve the level of amphibious mastery and cohesion through out the force.31
Developing the appropriate level of capability to satisfy strategic requirements
The first, and most important, method of balancing the development of the LHD capability against other capabilities is obtaining clear guidance from government on what level of capability is required. The ADF role in this is to provide the best advice to ensure quality decision making by government. Three fundamental questions inform this decision. What range of capabilities is required to meet the requirements of the strategic environment? This relates to the type and nature of strategic risks associated with Australia’s strategic objectives. What is the relative priority of the Amphibious Capability against others planned for the ADF? This is derived from the operational options developed to meet strategic objectives. The relative priority informs decisions about balancing of the opportunity cost of the Amphibious Capability against others. What are the fiscal and other resource constraints placed by government on the ADF? These will limit the available resources for the defence portfolio and need consideration otherwise, the rest of the analysis will be irrelevant. The answer to these questions provides the basis for effective decisions by government to balance the development of the Amphibious Capability against others in the ADF.
Analysis of the strategic environment informs three fundamental areas relating to government decisions about Defence capability development; strategic risks, strategic interests and strategic objectives.
Strategic objectives are a clear statement of what the ADF needs to do to protect strategic interests from associated strategic risks.32 Prominent academic Hugh White highlights the importance of clear strategic objectives stating ‘the more clearly and explicitly we can define strategic objectives, the easier it will be to build forces that can achieve them, and achieve them cost-effectively’.33 Overly demanding strategic objectives will require significantly more capability investment to realise the necessary force structure. Appropriate objectives that mitigate strategic risks to an acceptable level, ensures the appropriate level of capability is
developed.
Another important concept is ‘strategic warning’, which is an assessment of the time available between the detection and realisation of a threat to our interests.34 This provides the opportunity to accept lower readiness levels for capabilities against threats with longer warning times, therefore reducing the opportunity cost of developing these capabilities. It prevents the development of higher readiness levels when they are not required. This provides more flexibility and accuracy to the operational options and enables a more appropriate force structure is developed to meet strategic requirements.
The 2009 White Paper suggests the ADF can expect to operate as part of a larger coalition force except in the direct Defence of Australia.35 It also assesses the likelihood of a decade warning time for the emergence of such a significant threat.36 Large-scale threats that could require deployment of an amphibious capability against a capable adversary are likely to involve major powers. Australia’s contribution is likely to be part of a larger force. As a result, there is an argument that the ADF does not need to develop the highest level of amphibious capability, unless a direct threat by a credible adversary becomes apparent. It is important to note such a decision carries an element of strategic risk that requires careful consideration. However, such a decision will allow a lower level of investment in the Amphibious Capability and reduce the potential opportunity cost.
Operational options are the link between the strategic objectives and capability. Essentially, they are a decision about how best to achieve the strategic objectives.37 The iterative development of acceptable operational options, informed by resource limitations imposed by government, provides an effective method of balancing the opportunity cost of the Amphibious Capability against others.38 An assessment of the resource implications of ADF force structures required to implement various operational options allows determination of the most efficient option, which mitigates the risks facing strategic objectives to an acceptable level. This analysis informs the relative priority of different capabilities in the portfolio and enables balancing of the cost of any particular capability against others.
An example relates to the primary strategic objective described by the 2009 White Paper, deter and defeat armed attacks on Australia by conducting independent military operations without relying on the combat or combat support forces of other countries.39 One option could involve the deployment of the Amphibious Capability to dislodge the adversary from staging locations in the Principal Operating Environment (POE). This would require the deployment of the highest level of ADF Amphibious Capability. Alternative options involve pre-deployment forward or just defending the continent. In these instances, if an amphibious lodgement was required at all, it would be largely unopposed, a far less demanding scenario than dislodging an adversary with established defences. This would require a lower level of Amphibious Capability and therefore require fewer resources.
Leverage off allies to assist development
The Amphibious Capability will be a step beyond anything the ADF has possessed in the last 60 years. During both World Wars, the ADF was involved in numerous large-scale amphibious operations. After World War 2, the capability became dormant and it was not until the mid 1990s Australia developed even a modest capability. The future Amphibious Capability described in the AAC is well beyond our recent experience. Significant effort will be required to develop a mature capability. Developing doctrine and testing equipment and procedures will involve numerous collective training activities. It will be a lengthy and resource intensive process. One method to reduce this impost is to leverage off allied doctrine and experience.40 Allied doctrine is the product of experience and will provide a sound basis for the development of Australian doctrine. However, it will need to be tailored to meet our own unique needs. There have also been numerous exchanges with coalition partners to increase the experience of amphibious operations within the ADF. Collectively these measures have the potential to reduce the resources required to develop effective ADF doctrine and realise the Amphibious Capability. The net effect is a reduction in opportunity cost to other ADF capabilities, striking a more effective balance across the portfolio.
With the exception of the direct defence of Australia, the strategic objectives cited by the 2009 Defence White Paper indicate the ADF would operate with coalition partners.41 The White Paper also suggests alliances and other security relationships are one of the central pillars of our security strategy.42 One of the critical alliances is ANZUS. In most circumstances where shared interests are at stake and the circumstances are beyond the ADF Amphibious Capability, it is reasonable to expect assistance from allies. However, the White Paper does recognise that such assistance cannot be guaranteed, particularly where unique interests are at stake.43 This possibility requires careful consideration and development of alternative options to mitigate associated risks. However, engagement with allies sharing strategic interests provides Australia an opportunity to delay development of high-end elements Amphibious Capability. Deployment of the ADF capability in concert with allied forces could provide a potent amphibious force able to succeed in even the most demanding scenarios.
Careful scheduling of Amphibious Capability Development
Defence projects often involve replacement of one capability with another. The nature of strategic risk and the associated need to provide a continual capability during transition is a major challenge. It tends to create an increased demand for resources during transition. This is particularly relevant when considering workforce. The increases are often associated with the need to maintain extant capability whilst developing a new one, the impost of managing the new program and the immaturity of the new capability.44 The peak tends to reduce as the new capability matures and the extant capability is removed from service. Defence uses the term Net Personnel Operating Costs (NPOC) to track these costs during the development process and NPOC forms part of government approval documentation.45 Concurrency of major programs can create an unsustainable peak in resource requirements and necessitates careful management.
The development period of the Amphibious Capability is one of intense activity in the Defence portfolio, with several very complex and expensive capabilities planned for introduction. These include the Joint Strike Fighter, Air Warfare Destroyer and Future Submarine Capability. All of these programs will compete for resources in a constrained environment and without careful management have the potential to create a demand for resources beyond the level sustainable within government guidance. However, the ability to deconflict major programs through sequencing is limited, they often span many years and delaying others until completion is impractical. Regardless, a degree of control is available to reduce competitive pressures and balance the resource impost of development across the portfolio.
Improving resource efficiency across the ADF Portfolio
In a financially constrained environment, where available funding is capped and insufficient to support the entire portfolio, individual capabilities will compete for resources and trade-offs between capabilities will be required. Improving the efficiency of capabilities across the portfolio will reduce the deficit, and therefore the opportunity cost, of any particular capability.46 This concept relates to more than just the financial component. It applies to any type of resource, such as personnel or training time, which are constrained. There are options that can be used to improve the efficiency of the portfolio. The essay will now discuss some of the major options available.
Prioritisation of resource efficiency when developing capability will lead to capability that is more resource efficient. The Defence capability development process is very complex and involves the commitment of a substantial amount of the public resources.47 The process has been the result of numerous reviews in an attempt to improve the quality of outcomes.48 Numerous disparate factors influence Government decision making. Many of these do not lead to improved resource efficiency or the delivery of the most appropriate capability solutions for Defence. Two prominent examples are the over prioritisation of Australian Industry involvement and the predilection toward developmental programs.
One of the primary considerations for Government in major Defence programs is the level of Australian Industry involvement. There are many good reasons for this, but there are times when Australian industry is not capable of delivering the appropriate level of capability in an efficient manner. In some instances, Australian Industry may be the best solution for Defence, where they possess the capacity and particular expertise to satisfy a particular need. Most of the strengths of Australian Industry stem from operating in Australia, near the Defence customer. Better understanding of Defence needs, improved coordination, responsiveness and simplified supply chain between Defence and the contractor are all inherent in the nature of Australian Defence Industry.49 Many of the disadvantages stem from its relative size. Compared to many international defence contractors Australian Industry is small.50 Companies have limited capacity, particularly in terms of Research and Development. Additionally, they cannot provide efficiency due to economies of scale like larger international contractors. Prioritisation of efficiency during capability development will ensure Australian Defence industry are only involved when they can provide the most efficient and effective solution to the capability need. An ASPI report written in 2008 discusses this issue and recommends an unbiased approach to selection of contractors.
Defence acquisitions should be sourced from the international market without favour or prejudice to local suppliers, except in those circumstances where self-reliance or through-life support capabilities are a critical factor. Where preference is given to local industry, the additional cost and risk should be identified so that the self-reliance being purchased can be tested for value-for-money and the opportunity costs fully understood.51
Defence has a predilection for developmental programs as the solution for capability needs.52 This occurs because of the tension between maintaining a relative capability edge over potential adversaries and the extended life of type of capabilities in-service; or just underestimating the level of technical maturity at the time of decision.53 Developmental programs include an inherently higher level of risk of schedule slippage or cost increases.54 Additionally, they are relatively more expensive than the acquisition of mature capabilities. Major sources of additional cost are research and development and improved manufacturing efficiency later in the production cycle known as the ‘learning curve’.55 Defence policy recognises the advantages of the Military and Commercial Off-the-Shelf (M/COTS) options. A number of high-level Defence reviews have recommended the inclusion of MOTS as part of capability proposals.56 ASPI reinforces the concept stating ‘where possible, equipment should be acquired off established production lines with little or no modification.’57 It is important to note that MOTS or COTS may not always be possible. Developmental options may provide the only reasonable solution to a capability need. Regardless, in order to increase efficiency in Defence capability, off-the-shelf options require higher prioritisation. Detailed analysis of the most efficient capability solution that satisfies the capability need will provide efficiency, whilst ensuring the ADF acquires the right capability.
Although advanced technology has been the source of increased cost of Defence capability, it provides the potential to improve resource efficiency in other areas, such as workforce numbers. ‘While the tradeoffs between new technologies and numbers of operators needed are complex, strong anecdotal evidence suggests that these manpower savings can be significant.’58 Defence has already recognised the potential of the concept. The Strategic Reform Program implemented in 2009 highlights automation as a means of reducing personnel overheads.59 Personnel numbers are an area within Defence that is subject to considerable pressure. Growth resulting from development of new capabilities is problematic and human resource efficiency initiatives are an important means of reducing opportunity costs to other capabilities.
One of the major criticisms of the Defence Capability process has been a lack of rigour in developing the requirements.60 In a complex program, the establishment of effective requirements is a challenging task, but success of the program will depend on the quality of the requirements and the effective management of those requirements through the process.61 Rigorous management of requirements to ensure strategic alignment, appropriate prioritisation and categorisation and avoiding requirements creep, will lead to capability that is more efficient.62 This is essential to ensure the right capability is developed, whilst efficiency is maintained across the entire portfolio.
The Amphibious Capability is a major step forward for the ADF. The development of an effective capability will require a substantial investment in training. This is particularly so for the most demanding scenario possible, lodgement against a peer adversary.63 This scenario will involve the cohesive interaction of a many capabilities. Numerous regular collective training activities involving large portions of the ADF will be required to develop the skills and experience necessary for success.64 This presents a significant challenge and is the potential source of considerable opportunity cost for other ADF capabilities. The ADF is a small organisation and all capabilities have multiple roles. Time spent training for this capability means less time practicing other roles. However, there are potential training synergies that can be achieved, which will mitigate the potential opportunity cost. The Amphibious Capability is suited to testing the effectiveness of the highest order skills of the ADF in the joint domain. The establishment of agreed collective training periods, where the entire capability is employed in demanding scenarios, allows synchronisation across the services and will improve efficiency. In reality, this will be difficult to achieve this synchronisation as individual capabilities have vastly different training requirements. Additionally, many of the skills involved in operating as part of such a complex joint capability are relevant to multiple tasks. This will act to mitigate the opportunity cost of developing the Amphibious Capability on others.
Simulation also has a role in improving the efficiency of training. The conduct of collective training activities is expensive and simulation allows the opportunity to practice many tasks without the deployment of real capabilities.65 An example is the conduct of command and control exercises for headquarters. Simulation allows the replication of a realistic training environment to practice headquarters without the need to deploy units to the field. These types of activities are currently performed in the ADF, and the Amphibious Capability is well suited to their conduct.
Collectively the options presented act to improve the resource efficiency of ADF capability. The ADF is currently facing a resource-constrained environment and improved efficiency reduces the deficit across the portfolio. This reduction is important to reduce the opportunity cost of any particular capability on others and achieve a better balance between the development of new capabilities against the raising, training and sustaining of others.
Conclusion
This essay has described four options for the ADF to reduce the opportunity cost of developing the Amphibious Capability. The first option is the careful consideration of the strategic environment to ensure an appropriate level of capability is developed. The second option involves leveraging off allies to reduce the cost of developing the Amphibious Capability. The third option is the careful scheduling of the Amphibious Capability development program to deconflict with other major programs, avoiding an unaffordable peak in resource demand. The last option is to improve the efficiency of the entire suite of ADF capabilities, reducing competition for resources in a financially constrained environment.
Clearly and explicitly defined strategic objectives are the foundation for the development of robust and realistic operational options that inform capability priorities. Understanding what is required from a particular capability, and its relative priority against others, ensures only the required level of capability is developed. The Amphibious Capability consists of discrete capability levels, each with different force structure impacts. The more demanding possibilities will require significantly more investment in associated force protection capabilities, doctrine and training. Analysis of the strategic environment and fiscal reality allows government to decide what level of capability is required. Additionally, strategic warning provides the opportunity to accept lower readiness levels for the Amphibious Capability against threats with longer warning times, therefore reducing the opportunity cost of developing the capability.
Developing doctrine and testing equipment and procedures for the Amphibious Capability will be a lengthy and resource intensive process. One method to reduce the cost is to leverage off allied doctrine and experience. Additionally, where the highest and most demanding levels of amphibious capability are required, Australia will normally operate with coalition partners. By engaging with allies sharing strategic interests and developing concepts for a coalition amphibious capability, Australia can reduce investment toward some capabilities provided by allies.
In a financially constrained environment, where available funding is capped and insufficient to support the entire portfolio, individual capabilities will compete for resources and trade-offs between capabilities will be required. With the ADF developing multiple major programs concurrently, there is a chance of significant expenditure peaks that are beyond the level of available funding. Careful scheduling of major programs smooths the expenditure curve and prevents funding deficits.
Additionally, improving the efficiency of capabilities across the portfolio will reduce the funding deficit and the opportunity cost of any particular capability. Prominent options to achieve efficiency include prioritisation of resource efficiency over other factors in selection of capability solutions, rigorous management of requirements, leveraging technology for efficiency and the achievement of training synergies through the synchronisation of amphibious collective training activities across the services.
The ADF is facing one of the most difficult times in its history. The strategic environment is likely to involve intense competition between major powers in the region. However, the ADF is now subject to increasing financial limitations. One of the most difficult challenges is how to strike the correct balance of investment across the portfolio. Decisions made by government regarding the types of capabilities developed, are critical to the future success of the ADF. These decisions are complex and difficult as they rely on many disparate factors and involve substantial resources. Options discussed in this paper assist the government to make capability decisions by potentially reducing the opportunity cost of those decisions on other areas of the Defence portfolio.
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Hawke, A. and Smith, R. 2012, Australian Defence Force - Posture Review, Department of Defence, Canberra.
Hawkins, J. 2010, Australia’s Future Amphibious Warfare Capability, Department of Defence Canberra.
Husniaux, A. 1999, Life Cycle Cost - An Introduction, Belgian Air Force Staff, Brussels.
Jennings, P. [cited 30/9/2012] Lewis Lullaby Is Tough Love for Defence, URL: www.aspistrategist.org.au/lewis-lullaby-is-tough-love-for-defence/.
Joint Amphibious Capability Implementation Team [cited 29/08/2012] JP 2048 - Amphibious Deployment and Sustainment, URL: http://intranet.defence.gov.au/navyweb/sites/JACIT/comweb.asp?page=122518&Title=JP 2048.
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Kerr, J. 2008, Defence Business: Lhd 101 - Using Our Capability. Australian Defence Magazine, Apr 08, pp 1-5.
Langmore, J., Logan, C. and Firth, S. 2010, The 2009 Australian Defence White Paper: Analysis and Alternatives, Nautilus Institute, Melbourne.
Love, A. 2011, You Can’t Ride a Concept to the Beach: The Gaps in Australia’s Envisaged Amphibious Capability. Australian Defence Force Journal, no 186, pp 5-13.
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By U5172061
Introduction
The Department of Defence is currently facing one of the most challenging situations since its conception. On one hand, the environment suggests Australia is entering time of increased strategic competition between major powers in our region.1 This has the potential to create a variety of possible futures for the country, some of which will include the emergence of significant threats to our national interests.2 On the other hand, the Government has moved to reduce the Defence budget significantly.3 There are …show more content…
suggestions that fiscal constraint will be a continuing theme for Defence regardless of the outcome of the next election.4 The times of significant investment in the Defence portfolio that occurred under the Howard government are over. However, the decisions taken during the period have committed Defence to a number of very expensive long-term capability development programs that are contrary to the fiscal environment.5 Defence will have to be very careful considering the types of capabilities it will develop to ensure it is capable of meeting future challenges of the Asian Century.
One of the largest capability programs undertaken in the last decade is the Amphibious Development and Sustainment (ADAS) Program. The program consists of five phases and will significantly enhance the ADF Amphibious Capability. Embarked force lift will more than double and lane metres for vehicles and equipment will increase by almost four times what was available with the LPA class vessels in-service.6 The enhancements to capability will allow ADF participation in operations that were previously not possible. There are numerous discrete levels of capability possible for the future Amphibious Capability; however, realisation of the more demanding possibilities will require significant investment in associated force protection capabilities, doctrine and training.7 This investment will have an opportunity cost elsewhere in the ADF and requires careful consideration by Government and Defence.
This essay describes four major possibilities for the ADF to balance the opportunity cost of the development of the Amphibious Capability. Firstly, careful consideration of strategic guidance against fiscal reality will inform the Government’s decision on the readiness levels and capacity of the amphibious capability developed by the ADF. This will ensure the level of investment is commensurate with strategic requirements, and the opportunity costs are balanced against the development of other capabilities. Secondly, engagement with allies to develop concepts for the integration of the ADF Amphibious Capability into coalition task forces, and leverage off their experience, will provide opportunity to reduce the cost of developing the more demanding levels of amphibious capability. Thirdly, careful scheduling of Amphibious Capability development to deconflict with the resource demands of other major programs, will avoid substantial peaks in demand that are unaffordable given current budget constraints. Lastly, within a constrained environment where available resources are insufficient, the ADF can reduce the opportunity cost of developing new capabilities by improving the efficiency of the entire portfolio.
The essay initially discusses the defence portfolio during the time of the development of the Amphibious Capability to establish context. A discussion of the Amphibious Capability follows, including the possibility of developing discrete capacity and readiness levels. This highlights the potential opportunity to balance the opportunity cost of Amphibious Capability by only developing the level of capability required by strategic circumstances. The essay then discusses the rationale and impact of employing the ADF Amphibious Capability as part of a larger coalition, highlighting the force protection and support capabilities that coalition partners could provide. It also discusses the need to schedule the development of the Amphibious Capability considering the resource impost of other major programs. The essay concludes discussing some of the options for achieving efficiency in the ADF portfolio and the balancing effect of this efficiency.
Defining Capability
There are many definitions for capability. The Defence Capability Development Handbook describes it as ‘the capacity or ability to achieve an operational effect’.8 Andrew Davies has proposed a more practical definition as ‘credible military options available to government that allow it to pursue its policy aims when other means aren’t sufficient’.9 He further posits that credibility implies the ability to complete a task with sufficient capacity, at the appropriate time, against a specific adversary in a way that is evident to others.10 Government funds the ADF in order to have military options at its disposal, especially during emergencies and crises. The amount it spends depends on the perception of strategic risk and the financial circumstances of the time.11
Fundamentally, the cost of a Defence capability is a measure of the amount of government funding it consumes. However, it is important to understand there are more components to cost than the fiscal component. When this essay refers to cost, it refers to the complete cost of a given capability. That is the total amount of resources required to implement that capability. Defence uses a fundamental input to capability (FIC) construct to describe the elements of a capability. They include Personnel, Organisation, Collective training, Major systems, Supplies, Facilities and training areas, Support and Command and management.12 Detailed analysis of the FIC provides insight into the major areas where the cost of developing and sustaining a particular capability will compete with others. These areas include workforce numbers, particularly critical skill sets, individual and collective training time and facilities, available budget, critical support assets and critical supplies.
The Defence Portfolio during Amphibious Capability Development
The Defence portfolio is one of the largest and most complex in Australia. It is one of the major components of the government portfolio. It involves the acquisition and sustainment of advanced technology intended to provide a capability advantage over other countries in the region.13 The latest Australian government budget outcomes for FY 11-12 stated the cost of Defence during the year to be $21.692 Billion. This was the fourth largest government function listed behind social security, health and education.14 The acquisition of advanced technology is a source of complexity and technical risk for Defence. The DMO engaged one of the leading project management research organisations, Helmsman research services, to assess the complexity of Defence projects against other sectors. The primary finding was that ‘on the Helmsman Scale of Complexity the complexity of Defence projects rank one level higher compared to the other Australian projects’.15
The LHD capability acquisition and implementation is one of the more complex programs currently occurring. The program is but one element of the Amphibious Capability, which requires outcomes from several other defence programs for support and force protection. The program commenced in 2005, after a decision from government to acquire the LHD. The program is currently scheduled to last 15 years, with the last components implemented in 2020.16 This period is one of intense activity in the Defence portfolio with several very complex and expensive capabilities planned for introduction. These include the Joint Strike Fighter, Air Warfare Destroyer and Future Submarine Capability. Alone these capabilities could cost the government more than $56 Billion.17 In addition to the financial component, each capability will compete with the Amphibious Capability for other critical resources, such as work force and industry capacity. Several of these programs are important to the successful employment of the Amphibious Capability in more demanding scenarios. All of these programs will compete for resources and effort to introduce and develop effective outcomes.18
In May this year, the government announced a substantial reduction to the Defence budget throughout the forward estimates period out to 2015/16. The reductions amount to $5.5 Billion and will exacerbate the funding pressure from previous initiatives such as the Strategic Reform Program and rising operating costs.19 Most savings came from reductions in capital investment, $3 billion from equipment purchases and $1.2 billion from facilities. A further $438 million is being taken from administrative savings along with $360 million from cutting civilian workforce by 1,000 over two years.20 The immediate effect of these reductions has been the cancellation or delay of some major programs, but the full extent of the impact is yet to be fully determined. It is clear that increasing cost pressure will necessitate balancing the introduction of expensive new capabilities, such as the Amphibious Capability, against the raising, training and sustaining of the rest of the ADFs suite of capabilities.
The Amphibious Capability
The ADAS program (JP 2048) will provide the core of the ADF Amphibious Capability. The program will deliver a new fleet of watercraft, two amphibious assault craft and a strategic sea lift capability between 2008 and 2020.21 Phase one and two as originally scoped are either complete or cancelled.22 Phase three will provide amphibious watercraft that will integrate with LHD and be able to transport personnel and equipment from large amphibious ships to shore without utilising fixed port facilities, or prepared landing areas. Phase four will deliver the backbone of the Amphibious Capability delivering two Canberra Class LHDs and a sealift vessel. At present, there is no funding allocation for the sealift vessel, but the HMAS Choules procured under JP 3030 could be modified to meet the requirement.23 Phase five will ‘support mobility and lift tasks within austere littoral environments. The capability will augment larger amphibious vessels or conduct small-scale regional amphibious operations and will replace the ageing Balikpapan Class Heavy Landing Craft (LCH)’.24 The program is currently facing a significant number of challenges, including substantial budget and concurrency issues that make the potential opportunity cost of the capability more significant.25
Although, the ADAS program will provide the core of the ADF Amphibious Capability, there are many other related capabilities required to employ the capability on the battlefield.
‘Amphibious operations typically, and arguably uniquely, involve the close integration of all three Services and a number of other government agencies’.26 The ADF has developed a strategic level concept for the employment of the ADF Amphibious Capability titled Australia’s Amphibious Concept (AAC). The AAC describes the Amphibious Task Force (ATF), which represents the combination of the respective Services’ force elements and operational concepts.27 The ATF includes two discrete levels of capability, the Amphibious Ready Group (ARG) and Amphibious Ready Element (ARE). The ARG is to be capable of the full suite of amphibious tasks. The ARE, potentially as a sub-element of the ARG, is primarily focussed on the conduct of Humanitarian Assistance and Disaster Relief or NEO missions at very short notice.28 Both ARE and ARG include a force protection element tailored to the threat. A pictorial representation of the ARG and ARE is included in Figure 1 …show more content…
below.
Figure 1: Pictorial Representation of ARG and ARE
The AAC also describes the threat environment for the possible employment of the ATF. ADF expeditionary forces operating in the littoral environment face threats of varying intensity and sophistication, in circumstances ranging from permissive to hostile.29 Threats to ADF expeditionary forces include anti-ship missiles, long-range artillery, fighter-ground attack aircraft, man-portable air defence, fast attack craft, submarines and mines.30
Analysis of the ARG / ARE concept and the threat environment suggest three main scenarios for the employment of the Amphibious Capability. Humanitarian Assistance / Disaster Relief (HADR) in a permissive environment, opposed amphibious lodgement against a low capability adversary and opposed amphibious lodgement against a high capability adversary. Each of these scenarios requires different force structure and effort to establish effective doctrine and force element cohesion. The difference results from two main factors, the scale of the task and the size and capability of the threat. HADR employment would predominately involve the core elements of the ADAS program. The amount of assets involved could be scaled according to task, but would not normally require deployment of force protection assets. There would be some effort required to develop a cohesive force for this task, but significantly less than more demanding scenarios. An amphibious lodgement against a limited adversary would require the elements employed for HADR, plus force protection capabilities commensurate with the threat. However, it will not involve the full range of force protection assets required against a high capability adversary. The integration of some force protection would increase complexity and require more effort to develop a cohesive force. The most demanding scenario against a peer capability would involve the commitment of a large proportion of the ADF, including the employment of advanced force protection capabilities, like fighter aircraft, submarines and AWD. Substantial effort would be required to achieve the level of amphibious mastery and cohesion through out the force.31
Developing the appropriate level of capability to satisfy strategic requirements
The first, and most important, method of balancing the development of the LHD capability against other capabilities is obtaining clear guidance from government on what level of capability is required. The ADF role in this is to provide the best advice to ensure quality decision making by government. Three fundamental questions inform this decision. What range of capabilities is required to meet the requirements of the strategic environment? This relates to the type and nature of strategic risks associated with Australia’s strategic objectives. What is the relative priority of the Amphibious Capability against others planned for the ADF? This is derived from the operational options developed to meet strategic objectives. The relative priority informs decisions about balancing of the opportunity cost of the Amphibious Capability against others. What are the fiscal and other resource constraints placed by government on the ADF? These will limit the available resources for the defence portfolio and need consideration otherwise, the rest of the analysis will be irrelevant. The answer to these questions provides the basis for effective decisions by government to balance the development of the Amphibious Capability against others in the ADF.
Analysis of the strategic environment informs three fundamental areas relating to government decisions about Defence capability development; strategic risks, strategic interests and strategic objectives.
Strategic objectives are a clear statement of what the ADF needs to do to protect strategic interests from associated strategic risks.32 Prominent academic Hugh White highlights the importance of clear strategic objectives stating ‘the more clearly and explicitly we can define strategic objectives, the easier it will be to build forces that can achieve them, and achieve them cost-effectively’.33 Overly demanding strategic objectives will require significantly more capability investment to realise the necessary force structure. Appropriate objectives that mitigate strategic risks to an acceptable level, ensures the appropriate level of capability is
developed.
Another important concept is ‘strategic warning’, which is an assessment of the time available between the detection and realisation of a threat to our interests.34 This provides the opportunity to accept lower readiness levels for capabilities against threats with longer warning times, therefore reducing the opportunity cost of developing these capabilities. It prevents the development of higher readiness levels when they are not required. This provides more flexibility and accuracy to the operational options and enables a more appropriate force structure is developed to meet strategic requirements.
The 2009 White Paper suggests the ADF can expect to operate as part of a larger coalition force except in the direct Defence of Australia.35 It also assesses the likelihood of a decade warning time for the emergence of such a significant threat.36 Large-scale threats that could require deployment of an amphibious capability against a capable adversary are likely to involve major powers. Australia’s contribution is likely to be part of a larger force. As a result, there is an argument that the ADF does not need to develop the highest level of amphibious capability, unless a direct threat by a credible adversary becomes apparent. It is important to note such a decision carries an element of strategic risk that requires careful consideration. However, such a decision will allow a lower level of investment in the Amphibious Capability and reduce the potential opportunity cost.
Operational options are the link between the strategic objectives and capability. Essentially, they are a decision about how best to achieve the strategic objectives.37 The iterative development of acceptable operational options, informed by resource limitations imposed by government, provides an effective method of balancing the opportunity cost of the Amphibious Capability against others.38 An assessment of the resource implications of ADF force structures required to implement various operational options allows determination of the most efficient option, which mitigates the risks facing strategic objectives to an acceptable level. This analysis informs the relative priority of different capabilities in the portfolio and enables balancing of the cost of any particular capability against others.
An example relates to the primary strategic objective described by the 2009 White Paper, deter and defeat armed attacks on Australia by conducting independent military operations without relying on the combat or combat support forces of other countries.39 One option could involve the deployment of the Amphibious Capability to dislodge the adversary from staging locations in the Principal Operating Environment (POE). This would require the deployment of the highest level of ADF Amphibious Capability. Alternative options involve pre-deployment forward or just defending the continent. In these instances, if an amphibious lodgement was required at all, it would be largely unopposed, a far less demanding scenario than dislodging an adversary with established defences. This would require a lower level of Amphibious Capability and therefore require fewer resources.
Leverage off allies to assist development
The Amphibious Capability will be a step beyond anything the ADF has possessed in the last 60 years. During both World Wars, the ADF was involved in numerous large-scale amphibious operations. After World War 2, the capability became dormant and it was not until the mid 1990s Australia developed even a modest capability. The future Amphibious Capability described in the AAC is well beyond our recent experience. Significant effort will be required to develop a mature capability. Developing doctrine and testing equipment and procedures will involve numerous collective training activities. It will be a lengthy and resource intensive process. One method to reduce this impost is to leverage off allied doctrine and experience.40 Allied doctrine is the product of experience and will provide a sound basis for the development of Australian doctrine. However, it will need to be tailored to meet our own unique needs. There have also been numerous exchanges with coalition partners to increase the experience of amphibious operations within the ADF. Collectively these measures have the potential to reduce the resources required to develop effective ADF doctrine and realise the Amphibious Capability. The net effect is a reduction in opportunity cost to other ADF capabilities, striking a more effective balance across the portfolio.
With the exception of the direct defence of Australia, the strategic objectives cited by the 2009 Defence White Paper indicate the ADF would operate with coalition partners.41 The White Paper also suggests alliances and other security relationships are one of the central pillars of our security strategy.42 One of the critical alliances is ANZUS. In most circumstances where shared interests are at stake and the circumstances are beyond the ADF Amphibious Capability, it is reasonable to expect assistance from allies. However, the White Paper does recognise that such assistance cannot be guaranteed, particularly where unique interests are at stake.43 This possibility requires careful consideration and development of alternative options to mitigate associated risks. However, engagement with allies sharing strategic interests provides Australia an opportunity to delay development of high-end elements Amphibious Capability. Deployment of the ADF capability in concert with allied forces could provide a potent amphibious force able to succeed in even the most demanding scenarios.
Careful scheduling of Amphibious Capability Development
Defence projects often involve replacement of one capability with another. The nature of strategic risk and the associated need to provide a continual capability during transition is a major challenge. It tends to create an increased demand for resources during transition. This is particularly relevant when considering workforce. The increases are often associated with the need to maintain extant capability whilst developing a new one, the impost of managing the new program and the immaturity of the new capability.44 The peak tends to reduce as the new capability matures and the extant capability is removed from service. Defence uses the term Net Personnel Operating Costs (NPOC) to track these costs during the development process and NPOC forms part of government approval documentation.45 Concurrency of major programs can create an unsustainable peak in resource requirements and necessitates careful management.
The development period of the Amphibious Capability is one of intense activity in the Defence portfolio, with several very complex and expensive capabilities planned for introduction. These include the Joint Strike Fighter, Air Warfare Destroyer and Future Submarine Capability. All of these programs will compete for resources in a constrained environment and without careful management have the potential to create a demand for resources beyond the level sustainable within government guidance. However, the ability to deconflict major programs through sequencing is limited, they often span many years and delaying others until completion is impractical. Regardless, a degree of control is available to reduce competitive pressures and balance the resource impost of development across the portfolio.
Improving resource efficiency across the ADF Portfolio
In a financially constrained environment, where available funding is capped and insufficient to support the entire portfolio, individual capabilities will compete for resources and trade-offs between capabilities will be required. Improving the efficiency of capabilities across the portfolio will reduce the deficit, and therefore the opportunity cost, of any particular capability.46 This concept relates to more than just the financial component. It applies to any type of resource, such as personnel or training time, which are constrained. There are options that can be used to improve the efficiency of the portfolio. The essay will now discuss some of the major options available.
Prioritisation of resource efficiency when developing capability will lead to capability that is more resource efficient. The Defence capability development process is very complex and involves the commitment of a substantial amount of the public resources.47 The process has been the result of numerous reviews in an attempt to improve the quality of outcomes.48 Numerous disparate factors influence Government decision making. Many of these do not lead to improved resource efficiency or the delivery of the most appropriate capability solutions for Defence. Two prominent examples are the over prioritisation of Australian Industry involvement and the predilection toward developmental programs.
One of the primary considerations for Government in major Defence programs is the level of Australian Industry involvement. There are many good reasons for this, but there are times when Australian industry is not capable of delivering the appropriate level of capability in an efficient manner. In some instances, Australian Industry may be the best solution for Defence, where they possess the capacity and particular expertise to satisfy a particular need. Most of the strengths of Australian Industry stem from operating in Australia, near the Defence customer. Better understanding of Defence needs, improved coordination, responsiveness and simplified supply chain between Defence and the contractor are all inherent in the nature of Australian Defence Industry.49 Many of the disadvantages stem from its relative size. Compared to many international defence contractors Australian Industry is small.50 Companies have limited capacity, particularly in terms of Research and Development. Additionally, they cannot provide efficiency due to economies of scale like larger international contractors. Prioritisation of efficiency during capability development will ensure Australian Defence industry are only involved when they can provide the most efficient and effective solution to the capability need. An ASPI report written in 2008 discusses this issue and recommends an unbiased approach to selection of contractors.
Defence acquisitions should be sourced from the international market without favour or prejudice to local suppliers, except in those circumstances where self-reliance or through-life support capabilities are a critical factor. Where preference is given to local industry, the additional cost and risk should be identified so that the self-reliance being purchased can be tested for value-for-money and the opportunity costs fully understood.51
Defence has a predilection for developmental programs as the solution for capability needs.52 This occurs because of the tension between maintaining a relative capability edge over potential adversaries and the extended life of type of capabilities in-service; or just underestimating the level of technical maturity at the time of decision.53 Developmental programs include an inherently higher level of risk of schedule slippage or cost increases.54 Additionally, they are relatively more expensive than the acquisition of mature capabilities. Major sources of additional cost are research and development and improved manufacturing efficiency later in the production cycle known as the ‘learning curve’.55 Defence policy recognises the advantages of the Military and Commercial Off-the-Shelf (M/COTS) options. A number of high-level Defence reviews have recommended the inclusion of MOTS as part of capability proposals.56 ASPI reinforces the concept stating ‘where possible, equipment should be acquired off established production lines with little or no modification.’57 It is important to note that MOTS or COTS may not always be possible. Developmental options may provide the only reasonable solution to a capability need. Regardless, in order to increase efficiency in Defence capability, off-the-shelf options require higher prioritisation. Detailed analysis of the most efficient capability solution that satisfies the capability need will provide efficiency, whilst ensuring the ADF acquires the right capability.
Although advanced technology has been the source of increased cost of Defence capability, it provides the potential to improve resource efficiency in other areas, such as workforce numbers. ‘While the tradeoffs between new technologies and numbers of operators needed are complex, strong anecdotal evidence suggests that these manpower savings can be significant.’58 Defence has already recognised the potential of the concept. The Strategic Reform Program implemented in 2009 highlights automation as a means of reducing personnel overheads.59 Personnel numbers are an area within Defence that is subject to considerable pressure. Growth resulting from development of new capabilities is problematic and human resource efficiency initiatives are an important means of reducing opportunity costs to other capabilities.
One of the major criticisms of the Defence Capability process has been a lack of rigour in developing the requirements.60 In a complex program, the establishment of effective requirements is a challenging task, but success of the program will depend on the quality of the requirements and the effective management of those requirements through the process.61 Rigorous management of requirements to ensure strategic alignment, appropriate prioritisation and categorisation and avoiding requirements creep, will lead to capability that is more efficient.62 This is essential to ensure the right capability is developed, whilst efficiency is maintained across the entire portfolio.
The Amphibious Capability is a major step forward for the ADF. The development of an effective capability will require a substantial investment in training. This is particularly so for the most demanding scenario possible, lodgement against a peer adversary.63 This scenario will involve the cohesive interaction of a many capabilities. Numerous regular collective training activities involving large portions of the ADF will be required to develop the skills and experience necessary for success.64 This presents a significant challenge and is the potential source of considerable opportunity cost for other ADF capabilities. The ADF is a small organisation and all capabilities have multiple roles. Time spent training for this capability means less time practicing other roles. However, there are potential training synergies that can be achieved, which will mitigate the potential opportunity cost. The Amphibious Capability is suited to testing the effectiveness of the highest order skills of the ADF in the joint domain. The establishment of agreed collective training periods, where the entire capability is employed in demanding scenarios, allows synchronisation across the services and will improve efficiency. In reality, this will be difficult to achieve this synchronisation as individual capabilities have vastly different training requirements. Additionally, many of the skills involved in operating as part of such a complex joint capability are relevant to multiple tasks. This will act to mitigate the opportunity cost of developing the Amphibious Capability on others.
Simulation also has a role in improving the efficiency of training. The conduct of collective training activities is expensive and simulation allows the opportunity to practice many tasks without the deployment of real capabilities.65 An example is the conduct of command and control exercises for headquarters. Simulation allows the replication of a realistic training environment to practice headquarters without the need to deploy units to the field. These types of activities are currently performed in the ADF, and the Amphibious Capability is well suited to their conduct.
Collectively the options presented act to improve the resource efficiency of ADF capability. The ADF is currently facing a resource-constrained environment and improved efficiency reduces the deficit across the portfolio. This reduction is important to reduce the opportunity cost of any particular capability on others and achieve a better balance between the development of new capabilities against the raising, training and sustaining of others.
Conclusion
This essay has described four options for the ADF to reduce the opportunity cost of developing the Amphibious Capability. The first option is the careful consideration of the strategic environment to ensure an appropriate level of capability is developed. The second option involves leveraging off allies to reduce the cost of developing the Amphibious Capability. The third option is the careful scheduling of the Amphibious Capability development program to deconflict with other major programs, avoiding an unaffordable peak in resource demand. The last option is to improve the efficiency of the entire suite of ADF capabilities, reducing competition for resources in a financially constrained environment.
Clearly and explicitly defined strategic objectives are the foundation for the development of robust and realistic operational options that inform capability priorities. Understanding what is required from a particular capability, and its relative priority against others, ensures only the required level of capability is developed. The Amphibious Capability consists of discrete capability levels, each with different force structure impacts. The more demanding possibilities will require significantly more investment in associated force protection capabilities, doctrine and training. Analysis of the strategic environment and fiscal reality allows government to decide what level of capability is required. Additionally, strategic warning provides the opportunity to accept lower readiness levels for the Amphibious Capability against threats with longer warning times, therefore reducing the opportunity cost of developing the capability.
Developing doctrine and testing equipment and procedures for the Amphibious Capability will be a lengthy and resource intensive process. One method to reduce the cost is to leverage off allied doctrine and experience. Additionally, where the highest and most demanding levels of amphibious capability are required, Australia will normally operate with coalition partners. By engaging with allies sharing strategic interests and developing concepts for a coalition amphibious capability, Australia can reduce investment toward some capabilities provided by allies.
In a financially constrained environment, where available funding is capped and insufficient to support the entire portfolio, individual capabilities will compete for resources and trade-offs between capabilities will be required. With the ADF developing multiple major programs concurrently, there is a chance of significant expenditure peaks that are beyond the level of available funding. Careful scheduling of major programs smooths the expenditure curve and prevents funding deficits.
Additionally, improving the efficiency of capabilities across the portfolio will reduce the funding deficit and the opportunity cost of any particular capability. Prominent options to achieve efficiency include prioritisation of resource efficiency over other factors in selection of capability solutions, rigorous management of requirements, leveraging technology for efficiency and the achievement of training synergies through the synchronisation of amphibious collective training activities across the services.
The ADF is facing one of the most difficult times in its history. The strategic environment is likely to involve intense competition between major powers in the region. However, the ADF is now subject to increasing financial limitations. One of the most difficult challenges is how to strike the correct balance of investment across the portfolio. Decisions made by government regarding the types of capabilities developed, are critical to the future success of the ADF. These decisions are complex and difficult as they rely on many disparate factors and involve substantial resources. Options discussed in this paper assist the government to make capability decisions by potentially reducing the opportunity cost of those decisions on other areas of the Defence portfolio.
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