The Two Ocean Navy policy of 1987 is arguably the boldest shift in force posture Australia has made since the Second World War. In a rare and exclusive insight into how this came into being, Security analyst Serge DeSilva-Ranasinghe interviewed Kim Beazley, the policy’s chief architect. He went on to discuss why the policy was strategically necessary, the rationale behind the expansion of HMAS Stirling, the challenges of implementation, and the contribution the policy has made to the future of Australia’s national security.
Kim thanks for the opportunity. To what degree did historical considerations play a role in formulating the Two Ocean Navy policy? There were reports by Admiral Henderson prior to World War One, and Admiral Jellicoe in the interbellum, discussing establishing a naval base at Henderson. Then of course during World War Two, Australia had over 24 warships deployed in the Indian Ocean at various stages of the war.
Historically, a lot. When you’re engaged in an argument about it, it’s always useful to have historical antecedents because some of your colleagues might think, or might have thought that this is a political move to be helpful to me and others in the Labor Party of Western Australia. Indeed two at least jokingly accused me of feathering Western Australia’s nest. If anyone introduces an argument like that you say, well, better minds than mine when it comes to naval strategy have thought this one out. When you’re looking seriously, of course you’d expect British admirals to come to the conclusion that Western Australia would be a good point, because the focus of the British admirals is not the Pacific. The focus of British Admirals has always been the Indian Ocean. The context that mattered, back in the day, were the lines across the Indian Ocean to the Suez Canal, or around South Africa. The American perspective has always been the Pacific, but the British perspective has always been the Indian Ocean, The British point of reference has always been important to them, until very recently. It’s still quite important in the Royal Australian Navy. There was always, I think in the minds of British admirals, the thought there would be a base at Henderson. It’s much closer than Sydney, and that’s really where we ought to be.
What impact did the 1976 commission of enquiry into the Indian Ocean shape the development of the Two Ocean Navy when it was enacted as policy in 1987?
What really shaped my policy was my own study. When I was at Oxford, I was looking about for a topic to write my MPhil (Master of Philosophy) thesis on. It’s quite a long thesis; about 50,000 words. I subsequently published it along with a co-author, and it was on superpower naval competition in the Indian Ocean. That was a decision that I made back in 1973-74, and that, more than any of the reports of the commission of enquiry that you referred to, is what actually got me going on the Indian Ocean. As I did the research I had the opportunity for a few months to go through the US congressional record. It was an issue of some significance at the time because people were working out how to react to increasing Soviet naval activity in the Indian Ocean. The significance of the Indian Ocean’s geography framed debate. Is this a debate about accessing the ocean? Is it a debate about the Arabian Sea and the Persian Gulf? All those sorts of things were factors which influenced my thinking, but of course the Soviet ingress and egress to the Indian Ocean passed through the main Straits of Malacca, and so that also got my attention.
One of the things that featured in our explanation of the 1987 White Paper and our defence of it to other friends and allies were the activities that we were undertaking at the time under the Five Power Defence Arrangements to do surveillance of the Straits of Malacca, and we took that surveillance through to near Cam Ranh Bay. One of the services, if you like, that we performed then in the Western Alliance was to develop a substantial record of surveillance of the region, in particular of Soviet naval activity. That was actually regarded at the time as a serious contribution, and one of the factors which influenced the Americans in deciding that they’d accept a strategy of defence self reliance from us. I understand that it was Malcolm Fraser, at the time in the 1970s who offered the Americans use of Western Australia as a means to address the threat posed by the Soviets.
In the late 1970s, he certainly, to my recollection made those offers. He also, to my recollection, when the Afghan War broke out, offered to place Australian warships in the north-western Indian Ocean, in the Arabian Sea. However, he balked at a suggestion made by Jimmy Carter that we become part of a rapid reaction force capable of being deployed into the Persian Gulf. At that point in time Fraser had pretty much put a Change of Operational Control (CHOP) line on The Straits of Hormuz and we wouldn’t go further than that. I think Fraser had at the back of his mind the rather difficult fate of Gordon Freeth, who was a Liberal Foreign Minister who lost his seat in 1969 when he played down the significance of the Soviet naval presence. The Democratic Labour Party (DLP) gave preferences against him so it cost him his constituency. That alerted, I think, the Liberal party in particular, to the fact that the Indian Ocean was seen as somewhat significant strategically.
I think the Soviet invasion of Afghanistan saw a lifting of the consciousness of Australians, and of the Western Alliance generally, of that quadrant of the Indian Ocean. The other thing which had dramatically increased the significance of it was the Organisation of the Petroleum Exporting Countries (OPEC) embargo back in the 1973 Arab-Israeli War. It certainly settled in people’s minds the significance of the oil traffic through the Persian Gulf.
Perth at the time was a relatively small city: it didn’t have the comparative attractiveness it does today. Did you encounter significant resistance from the Defence establishment on the question of relocating assets?
There’s a lot of querying of it in the Navy. Stirling, of course, was established back in the 1970s, but it was established consciously as a forward base, so they were not basing ships there permanently. My view was that you had to in fact have a genuine two-ocean navy. The ability to defend Australia’s approaches depends on your deployment of naval units in areas of importance to us. This must include the Indian Ocean, or the eastern Indian Ocean, in particular south-east Asian waterways. If you were going to go for a strategy of Defence self-reliance, which was the primary force structure determinant, you’re very quickly seized with the fact that the efficiencies that you get from deployment from Western Australia, as opposed to the eastern states, are enormous. That includes submarine operations. Deployment from Stirling cuts the time to get to stations in the archipelago or South China Sea, improving the deployment time by a third. It’s like adding an extra couple of submarines or surface vessels.
There was a lot of resistance to it in the Navy because they love Sydney. Sydney’s an enjoyable place to be, but it’s a very bad location for the less well-paid elements of the Navy. It was okay for officers, but it’s not much good for ratings who had to live quite a long way from the base if they were family people. Of course, they could live on the base if they were single. Really, the Sydney market was such in those days that no ordinary sailor ever had an opportunity of owning a home. One of the great attractions, for at least some in the Navy, was that Rockingham was eminently affordable, and a very nice lifestyle. You could start to build in a really nice family location. There were mixed feelings. There were some who felt, “oh god, we’re being moved away from Sydney. Where will our spouses find work? Won’t our young men and later women find themselves removed from the bright lights of the big city of Sydney?” Which as I’ve said is an enormously attractive city. However, at the top level, Mike Hudson, who was head of the Navy, absolutely saw that for the Navy to play the role that it wanted to play in the defence of Australia it had to situate itself properly. So he was a strong supporter.
In terms of the disadvantages of Australia’s east coast from a naval perspective, what would you say they are in the context of safeguarding or projecting Australian strategic interests?
The east coast, thankfully, is a long way from where any threat might develop. In fact, Stirling is also a fair way from where any threat might develop. However, if you’re looking around the coastline of Australia it’s very difficult to base large ships, or submarines, much further north than Stirling because you then start to run into massive tidal factors. In terms of being as close as you can get and still operate effectively, Stirling is about it.
Were other areas than Cockburn Sound considered as potential basing locations?
The best base you could build in Western Australia, without question, would be Albany. If you just went for the defensibility of it, the depths of the water, and the points of exit from the base. However, firstly Albany’s a long way away, and secondly, there’s no industrial infrastructure there.
People might complain about the comparative industrial infrastructure of Perth compared to Sydney, but it does have industrial infrastructure. As luck would have it, one of the largest areas of near-heavy industry in Western Australia is Kwinana, which is very close to the Rockingham base. Though there were those factors involved, Albany is a fabulous port. You could assemble an entire early deployment of our troops for the Middle East in the 1914-1918 war there; you could take the whole lot of them. The ANZAC fleet could fit into King George Sound in Albany. You couldn’t do anything like that in Stirling. Stirling also has a substantial problem of constant dredging, and it is not as deep as would be ideal. However with the other factors, liveability, access to industrial infrastructure, access to transport routes and the like, Perth comes out ahead.
Albany was an alternative, and a great alternative, but the other factors weighed more heavily in favour of Stirling. The other place you could look at is Port Hedland, but the tide there is huge. They do get very big ships into Port Hedland as you know. We certainly still keep thinking of Port Hedland as a patrol boat base, but in the end it was thought that it was more defensible at Stirling. At a pinch, you could do Geraldton, but not much further north than that.
How was Geraldton evaluated at the time?
I don’t think the tidal rise and fall there is anything like a bit further up the coast. There is a bit of an infrastructure there, and it’s a lovely town, but it doesn’t have as good port facilities as you can get around Fremantle.
What about Dampier?
Much the same as Port Hedland. In fact, Port Hedland would be better than Dampier in the sense that there is more of an industrial infrastructure at Port Hedland.
What were the other substantial criticisms of the Two Ocean Navy concept that you encountered?
There were none. It was overwhelmingly the liveability issue and adequacies as an industrial base. Those were the two criticisms. Nobody seriously opposed it strategically. You can’t oppose it strategically. Particularly if you’re running a strategy of defence self-reliance, and most of the defence forces were well and truly signed on to the idea of defence self-reliance. If that’s your stance, there’s no common sense strategic argument against it. The only other argument against it was tradition; the Navy was traditionally in Sydney. There was liveability, questions about where would spouses work and where would kids be educated. These are not insubstantial concerns, among officers in particular, because officers will often send their kids to good Sydney private schools. There are very good private schools in Perth, but they didn’t know about them. The concerns were mostly about families and liveability. “All our families are over there in the east. How will it be? How readily will grandma and grandpa be able to come over?” I don’t mock these issues. If you’re trying to recruit armed forces you don’t do it by telling them they’re going to be exiled to a hard life. These sorts of things were genuine worries in the Navy at the time. However nobody could make a strategic argument against it.
At the time of the announcement of the policy, the Navy was already challenged with lack of personnel, and high personnel attrition rates. Was there consideration given to increasing numbers in the Navy to compensate for strategic change?
It was often a pay issue. Incentives have always been an important factor, for example with Submarine bonuses. It is very hard, in a high wage economy, and in Defence in a low spending economy, to sustain a force with longevity. You have to keep up a hefty recruitment. Interesting thing is, as people got to know Western Australia, it became a factor in encouraging recruitment. The beaches of Rockingham and Mandurah have been named in various tourist studies as the best beaches in Australia. They’re always featuring in the top 10 anyway. So all of a sudden, you found yourself in a situation where you could afford a house in a beach suburb, where the kids could run down to the beach. Then they found of course that West Australian schools are good, the climate’s very nice. Not immediately, but over a period of time, it became a positive attraction for people to come over here. The numbers of people who’ve settled and who have stayed after they left the Navy, are quite extraordinary. One of the things it’s produced is the biggest RSL branch in Western Australia, which is the Port Kennedy RSL. I think they’ve got one thousand six hundred members or something. That’s an indication of how popular hanging about in Western Australia is. Of course there’s another thing which has sort of kept them there, and that is recruitment to working in the mines, which is enormously well paid. However, that’s also been extremely destructive to retention.
How was that initial move dealt with, when infrastructure and personnel were starting to be brought over? There would have been increased removal costs and lack of shore postings in the west at the time, and that would have turned into increased posting turbulence and wastage rates.
The real wastage was less a product of those times, than later on. In the late 1990s and the early part of this century Navy became completely uncompetitive with West Australian wages, which were being dominated by the mines. All sorts of things have been tried. I came across people while I was a member of parliament representing Stirling, which I did for about 11 years, who would be re-recruited back into the Navy. They would be hired effectively as part-time sailors to come back in and run the engine room. Highly skilled people were recruited back for particular deployments to the Persian Gulf, for example. The Navy has done all those temporary fixes, which are done so often they’ve become a permanent feature. The wastage rates in the armed services tend to relate less to how they feel about the services, though that’s important, and more to what the general economy is offering. Wastage rates are horrendous in good economic times, and almost non-existent in recession: Australia’s had no recession for something like 20 or 30 years. Recessions are very good for armed services recruitment, prosperity’s not.
Did you have to increase the defence budget to accommodate the Two Ocean Navy?
You’d certainly have to reprioritise. In those days, back in the 1980s, our spending on defence was well over 2% of GDP, so it was a much bigger proportion of the budget. I can actually remember a budget when education spending was behind defence, and health spending only just ahead. Things have changed dramatically since then, but it was a big percentage of the budget back in the 1980s. So yes, it was expensive. Stirling was just a forward base, so we had to build accommodation there . We had to build better roads, we had to build a submarine training school, a dive tower; there were a load of things we had to spend on. But actually it was probably cheaper to spend on those things there than to spend in Sydney. Of course Sydney already had an infrastructure, but Sydney is not an easy place to sustain a base. It’s an expensive city. You’ve got security issues and you’ve got clashes with civilian use of the waterways. Stirling’s a much more secure base.
Did you have to build a new ship-lift facility?
We did pay for the ship lift, and the West Australian government provided some effective help with that. But it was put out to the private sector. Unlike Sydney, there was never a naval dockyard like the Sydney naval dockyard, so it was going to be the private sector instantly. The West Australian government did let us down on one thing. They promised that they’d run the Kwinana freeway down to Mandurah, but that promise took a very, very long time to implement, as did the rail to Mandurah. I think they really only did those two things when the Perth population started to increase exponentially in the late 1980s. Rather than preceding as was supposed to be the case with the development of Stirling, it actually followed the development of the civilian population more than it did the military’s.
So in terms of industry support in WA, you were in essence creating a new local market by shifting the Navy?
Yes, we did. It was a substantial factor in the development of the shipping construction facilities around Henderson, so it was important in that regard. West Australians are interesting though. They’re not like the eastern staters, where the argument for defence is often made, as it is for example in Adelaide, in terms of jobs and industry opportunity. West Australians think about that, but not as much as they do in Adelaide in particular, or the eastern states more generally. West Australians tend to think about defence strategically. So the eastern states and Adelaide think defence industrially, while Western Australia thinks defence strategically. In terms of what West Australians want, it was not so much jobs, it was defence. There has always been a sense of vulnerability in Western Australia, which is one of the reasons why West Australia has always strongly resisted shifting the SAS over to the eastern states with other major army units. It is also why they’re very jealous now of sustaining and enhancing the naval facility in Western Australia. In Western Australia, we do think much more in defence terms, and respond much more to the defence argument than is the case in the eastern states.
WA lacks a regular army presence, outside of the SASR. Was potentially augmenting regular Army strength in Western Australia a consideration at the time when you were Defence Minister?
Not hugely, it has to be said. When it came to what we would do with the Army, the forward deployment of where they were was thought of much more in terms of Darwin and the Northern Territory. Firstly with the shift of Second Cavalry, and then effectively building up to a whole mechanised brigade up there in Darwin — so the Army was thought about. You’ve got to remember the development of Stirling was part of a northern and western shift; not just a western shift. So we thought in terms of Army to Darwin, and then providing the capacity of the Air Force to fight across the west and north. That involved Curtin Air Base, enhancement of Learmonth, Scherger in North Queensland. Tindal predated me. So the view was, Navy to Western Australia, Army to Darwin, Air force deployable across the north. That was the way in which we thought of the services. So we weren’t really thinking in terms of additional army units in Perth. All that focus went to Darwin.
Do you think that the Two Ocean Navy has resulted in the original outcomes you envisaged back in the 1980s?
Oh, absolutely. Totally the case. It’s a much more effective location for the deployment of submarines and I think it would be likewise for surface vessels. It was tectonic. But the strategic argument was so overwhelming that the personal arguments and sadnesses, you could see that they understood that they couldn’t hold sway. If you’re going to defend the country, you have to do things differently. Almost as tectonic as that was shifting the Army to Darwin. No matter what complaints you might have had about whether your spouse could find work in Western Australia and that sort of thing, that was a much greater consideration with Darwin, because it’s a much smaller place. Perth is a modestly sizable city really, and it’s quite a sizeable city now at 1.8 million people. There are not too many cities in the United States that big. That wasn’t the case then, but it was still pretty big. You could at least see the sort of lifestyle that folk would want was more or less available in Western Australia, but was not at all available in Darwin.
Have successive governments since gone far enough with regard to restructuring and balancing of the armed forces deployed across the country?
I think it’s something that always has to be kept under review. That goes not only to the location of facilities, but the character of the ships and aircraft, and the roles of the ground forces. They have to be kept under constant review. There was a very important study done by Rick Smith and Alan Hawke a short while ago, which demonstrated pretty effectively that we have not done all the things that we needed to do, and we’d have to think about it more. Surveillance issues comes up, protection of big offshore assets comes up, and have we the right ships for that? Well maybe not. Have we got the right surveillance activity? Well, maybe not. These things are still under active consideration now.
We’ve had a few West Australian defence ministers. And you tend to find people like Steve Smith and David Johnston have a slightly different perspective to our eastern states friends, and that makes them much more active in trying to visualise what needs to be done in the defence of our approaches. Steve Smith, for example, really worked very hard on the Americans to get them interested in more utilisation of the Stirling naval facility, as, not as a base so much as a forward deployment facility. At an AUSMIN meeting he got the Americans to accept that at least they’d put that to study, and included considerations of what might need to be done to upgrade Cocos Island in the last Defence White Paper. I think also from memory that featured in the Rick Smith/Alan Hawke study. So there’s more thought to be done in terms of needs across the north and west. The matter wasn’t settled by anything I did.
What role did Cocos Island and Christmas Island play in your strategic calculations during your tenure as Defence Minister?
Not a heck of a lot to be honest. As far as I was concerned it played a bit of a role; I was happy to approve of an exercise of a landing on Cocos Island. We were of the view that as far as it was to be used, it was for the P-3 aircraft, and the facility for P-3 aircraft landing and refuelling was fine. They’re probably not fine for anything more active than that, hence in the last White Paper they were put effectively to review. I didn’t think at the time, given the fact that there were P-3 aircraft operating from there, that there was any more that we needed to do.
Australia’s relationship with India at the time was more abrasive. Did your policy consider India’s posture at the time, and any potential security concerns to Australian outposts in Cocos Islands?
Certainly the Indians seem to think that their Look East policy started quite recently. Actually it didn’t. The Indian Navy has always been interested in it, and they were talking about it quite actively in the 1980s and 1990s. But, not really. To tell you the truth, when you sat down and vectored the advantages and gains that you got from being in the west coast as opposed to the east, the measurements were all related to South-East Asia. So we identified around five choke points across South-East Asia, and the north of New Guinea, and the Navy was supposed to be structured to be able to deal with them.
We were actually thinking of a surface fleet numbering about 17 large ships. Of course even though in the White Paper we only put six submarines, we anticipated the need to have eight. When you identified the choke points, all that wasn’t really quite enough. You needed at least that many to be able to successfully deploy to the choke points. Some of those choke points related to India, but they all related to archipelagos to our north.
How relevant do you think the Two Ocean Navy is today, with the nature of homeland security and non-state aggression?
The non-state threats are important, but we live in the one part of the world where the Treaty of Westphalia still counts. We live in a part of the world where national sovereignty is the key. We live in a part of the world where, as wealth grows and therefore budgetary capacities grow, states in the region are moving away from defence forces organised around internal security to defence forces organised to deal with issues in the approaches. We’re one part of the globe where no maritime boundaries are settled, really. Where capacity’s growing exponentially, and when anyone in our region plans defence forces, while they have to deal with criminal and counter-terrorist issues, they think in inter-state terms, more than Europeans do, for example. So I don’t think, what you might call modern defence and security issues, take away from the older traditional factors when you look at our defence needs. You have to drive your defence policy with the realities that you live with, not the realities that some other people live in. The realities we live in are very much the realities of classic nation-state formation and potential conflict.
When you look at how the Navy has developed since, in retrospect does it defer from the vision that you had originally in 1987?
It is a much smaller Navy than we had anticipated back in the day. What happened was the end of the Cold War. So even though our defence forces weren’t cast necessarily in a Cold War context, but in a defence self-reliance context, the fact is the public mind back in the 1980s was much more defence-conscious than it is in contemporary terms. How many ships are there in the Navy now, 11 or 12? Well, we saw it in terms of 17.
The Navy presence in the west is widely seen as a key element of developing closer support with the US. How much was this considered as a potential side benefit of a Two Ocean Navy at the time, and was there any US support for developing Stirling?
There was a lot of support there from the United States. In those days the Americans used it a bit more heavily than I think they do now. Back in the 1980s there would be an American submarine berthing at Stirling every couple of months. In fact the Navy, in the only place in Australia where this applied, had its own tugs in Western Australia in order to be able to berth the American nukes. Likewise we had more visits by American carrier battle groups. The Americans have gotten much more antsy in the northern Indian Ocean, and they stay on station much longer in that area now than they did in the 1980s. So paradoxically, that means they are using Australia less and less compared to those days. They still do, but compared to then not as much. The Americans were keen on seeing Stirling upgraded because their submarines, at least, would use it quite a bit. Whether they do again in the future one doesn’t know. On the other hand, they’re interested in the deployability across the north of aircraft as well as men. So if you look at the facilities they are at the moment most focused on, it’s more the air bases than the facility at Stirling. That’s under study.
Was there consideration given to developing a major training area in WA, outside of what currently exists?
The other thing that we did was, building on the concept of NORFORCE, look at creating reserve units across the north. We did a NORFORCE type unit in the Pilbara at that time: the Pilbara Regiment. Those were the sorts of things that we tended to be taking a look at then. We did acquire new exercise areas up in the north, from recollection. We also built some facilities for the SAS just outside Perth, as better facilities for training away from Swanbourne, so there were certain resources put into that. However, we certainly weren’t thinking in terms of expanding the Lancelin range. What we had was adequate at the time.
How would you describe WA’s strategic importance to Australia, looking back through the course of the 20th century and up to today? Where do you think it’s likely to head in the decade ahead?
It’s much more critical than it was when I was a boy. The importance to our economy of our northern minerals and energy provinces are enormously greater than when I was younger. The first study I saw which really made big points about that was the Smith-Hawke study. It certainly featured in the last Defence White Paper as well. Western Australia is much more important to Australia now than it was when I was Defence Minister. I think the focus on Western Australia and the north will grow. Of course, good defence actually doesn’t recognise state boundaries, it only recognises a continental national entity.
What happens at Tindal and Darwin is as important to defending Western Australia as what happens at Stirling. But, in fact, it’s a lot closer to our most vulnerable points. In defence terms, the Northern Territory-Western Australia boundary is meaningless. West Australia figures much more prominently in total national defence perspectives now than it did when I was Defence Minister. But I think the resistance to doing things was much greater then than it is now. There’ll always be some element in the debate, which will be grist to the mill amongst those who argue insufficient concentration or excessive concentration has been made on Western Australia. But it is a debate that is conducted at a much higher level of activity than when I was Defence Minister.
Thanks again Kim for another interesting interview.