Delivering a stronger Navy, faster

Executive summary

Serious risks are being realised in the Royal Australian Navy’s twin transitions in its surface combatant and submarine fleets. As Australia’s strategic circumstances become more dangerous, Defence needs to adopt hedging measures to actively address the capability risks in its acquisition plans.

The government’s recent announcement regarding the acquisition of nuclear-powered attack submarines (SSNs) is about addressing capability risk in the long term, but with delivery of the first future submarine now delayed probably to the late 2030s, in the short to medium term the proposal exacerbates those risks.1

To address those risks, this paper details an approach that will:

  • deliver valuable additional maritime capability to the Navy significantly earlier than the current plan;
  • sustain, and indeed grow, the workforce that will be essential to our long-term ship and submarine plans;
  • develop the industrial ecosystem needed for naval construction in Adelaide and nationally; and
  • provide a timely return on the funding that the Australian government has already planned to invest in naval capability this decade without requiring additional funding.

In order to deliver on the government’s ambitious plans for future shipbuilding capability, the urgent task today is to develop a bridging strategy that delivers short term capability wins and boosts vital industrial capability. This plan presented here does both by offering a viable way forward to an expanded defence capability and industrial base into the future.

Even before that announcement, the mounting delays in the Hunter-class frigate program prompted commentators to suggest building more Hobart-class air warfare destroyers to provide more maritime capability sooner. That concept makes even more sense now.

There’s an urgent need to deliver more maritime combat power before the Hunter and SSN programs deliver.

The first Hunter frigate is already delayed to around 2033 and, with the program facing complex integration challenges and vanishing design margins, there are no guarantees that it won’t slip further.

Even when the Hunter starts coming into service, it’s under-gunned for the threat environment of the 2030s: its missile capacity is the most glaring shortfall. With the lethality of anti-ship missiles increasing, its 32 missile cells mean it’s taking a knife to a gunfight. Plus, it’s going to have limited capacity to carry the Tomahawk strike missile, another of the government’s recent announcements. Meanwhile, the Navy’s Anzac frigates will have to serve into the 2040s, even though they only have eight missile cells.

The Navy needs combat power—and it needs it before the Hunters turn up on the lethargic two-year delivery drumbeat built into the current Naval Shipbuilding Plan.

To deliver that, we need to rebuild the shipbuilding plan. With the cancellation of the Attack-class submarine, the plan to build Australia’s industrial capability is in disarray. Thousands of skilled jobs that were to be created and sustained by that program are indefinitely deferred. However, we can grasp this as an opportunity to deliver military and industrial capability sooner.

We’ve created the foundations of a national naval shipbuilding machine by massive investments in modern, digital shipyards. But under the current plan this enterprise isn’t delivering anything before the mid-2030s besides very lightly armed offshore patrol vessels (OPVs), despite tens of billions of dollars flowing into it this decade. We need to take advantage of this industrial capacity and investment to give the Navy more offensive power well before then.

We need to refocus public debate around shipbuilding towards the original purpose of the shipbuilding enterprise: delivering the maritime capability the Navy needs when it needs it to defend Australia. That means adjusting the shipbuilding enterprise’s order book as strategic circumstances demand. The true value of a continuous naval shipbuilding capability is in its ability to switch production between classes and to accelerate builds as necessary.

Rather than locking in particular vessels on a slow and steady drumbeat to guarantee jobs for the grandchildren of current workers, the enterprise needs to protect the Australians currently paying for it. The government’s Defence Strategic Update from last year says we no longer have at least 10 years of warning time to prepare the ADF to participate in major conflict. We simply should not accept that the Navy can’t acquire major new combat capabilities over this next 10 years.

There are two parallel near-term shipbuilding approaches, both taking advantage of the production machine that the government has invested in.

ASPI has already discussed the first: building vessels based on the OPV hull but fitted with missile systems and smart autonomous systems—air, surface and undersea.2 Not every maritime platform needs to be able to do every task and defeat every threat by itself. Breaking this mindset opens new possibilities. An armed version of the OPV that doesn’t pretend to be a multi-role platform but has useful offensive or sensor capabilities looks attractive as a near-term addition to the Navy’s lethality that complicates any adversary’s decisions. They won’t be multi-role vessels, which avoids the spiralling complexity and cost we see with the Hunter, but would operate in tailored taskforces with other vessels.

This approach would be part of a broader strategy of making greater investments in the ‘small, smart and cheap’—disaggregated uncrewed or minimally crewed systems that employ autonomous technologies to generate distributed mass and effect.

The second approach—the focus of this paper—is the option of building more Hobart-class air warfare destroyers.

We’ve already been through the pains and challenges of getting the design right and learning how to build them.

While they mightn’t have quite the same antisubmarine warfare capability as the Hunter is intended to have, they’re still very capable antisubmarine platforms. Moreover, their 48 missile cells offer advantages over the Hunter in air defence and strike—and for deploying missiles made in Australia through the emerging guided weapons enterprise.3

With the design mature and the build process well understood, there’s the realistic prospect of getting a second batch of three Hobarts into service before the Hunter program delivers, the first of them well before the end of the decade.

As with any complex undertaking, there will be challenges, such as managing facilities and workforce between the major shipbuilding programs at Osborne in South Australia and restarting supply chains, but the shipyard was designed to have more capacity than simply producing one frigate every two years. The reason the government retained ownership of the shipyard (and the taxpayers funded its development) was to retain the flexibility to produce different vessels from different designers as required.

Moreover, a new air warfare destroyer program will help generate the ecosystem of skilled tradespeople, designers, engineers, combat systems integrators, project managers and local suppliers that will be needed for the build and sustainment of the future SSNs. It would avoid a cold start to the SSN program and so help mitigate its schedule risks.

For those concerned about what this means for ultimate numbers of Hunter-class frigates, we can be agnostic for now on that issue. But there’s nothing carved in stone that says the magic numbers for the Navy’s major surface combatants are three destroyers and nine frigates for a total of 12. In fact, one of the fundamental problems with the current shipbuilding plan is that it locks us into 12 surface combatants until the 2050s—that’s despite the government’s assessment that we’re facing the most demanding strategic period for our country since World War II.

Building a second batch of Hobarts would allow us to grow the fleet faster, whatever the final goal may be.

Certainly, major warships such as the air warfare destroyers are expensive, but they’ll be substantially less so than Hunters, in part because they’re significantly smaller and in part because we already know how to build them.

Moreover, the $1–2 billion annual spend freed up by the cancellation of the Attack class can be put to good use building maritime and industrial capability. Most importantly, that spend can deliver capability much faster than the Hunter program.

If the National Naval Shipbuilding Enterprise can’t deliver meaningful capability well before 2030, then its entire purpose needs to be reconsidered. Ultimately, delivering actual capability in strategically relevant time frames will address risk as well as rebuild public confidence in the shipbuilding enterprise.

Dr Marcus Hellyer & Michael Shoebridge discuss the findings of the report.

Strategic risks are being realised in the Navy’s capability

The misalignment between strategy and schedule

Two major pieces of government policy have pulled the rug out from underneath its Naval Shipbuilding Plan.4 The first was the 2020 Defence Strategic Update (DSU). It assessed that we can no longer rely on having 10 years of warning time for inter-state conflict involving Australia—which simply can’t be reconciled with the schedules of the major planks of the shipbuilding plan. The second, the government’s announcement that Australia would acquire nuclear-powered attack submarines (SSNs) pushes the timelines of one of those planks even further into the future.

If the achievement of initial operating capability in the early 2030s seemed inadequate when the preferred designs for the future submarine and frigate projects and their schedules were announced several years ago, the revised dates of the mid-2030s for the future frigate and late 2030s for the SSNs are completely unacceptable in the light of the DSU’s strategic assessments.

We need to acknowledge that the Navy’s entire combat power is at risk.

It’s not just the delivery schedule of the first of class, but a lethargic two-year delivery drumbeat that’s designed to ensure jobs for the grandchildren of shipbuilders in the late 2040s and minimise the start-up costs of distant classes of ships whose requirements and design can only be in the realm of conjecture, rather than delivering capability now to ensure the security of the Australian taxpayers who are funding the program. Neither the schedule for initial operational capability nor the delivery drumbeat can be reconciled with the government’s own assessment of our strategic circumstances.

Moreover, the Navy’s short- to medium-term capability plans are difficult to reconcile with the DSU’s assessment that:

maintaining what is a capable, but largely defensive, force in the medium to long term will not best equip the ADF to deter attacks against Australia or its interests in the challenging environment this document sets out.

The DSU states that Defence requires:

… a different set of capabilities. These must be able to hold potential adversaries’ forces and infrastructure at risk from a greater distance, and therefore influence their calculus of costs involved in threatening Australian interests.

Those capabilities include long-range strike.5

Yet, due to Naval Shipbuilding Plan’s moribund schedule, the Anzac frigate will remain the backbone of the surface Navy well into the 2030s and be in service into the 2040s. But there’s little that can be done to enhance its strike capability. It only has eight vertical launching system (VLS) cells, and they’ll be required for its Evolved Sea Sparrow Missile (ESSM); there’s no capacity left for offensive weapons such as the Tomahawk missile that the government has announced it will acquire. And even when the Hunter eventually arrives, the situation won’t necessarily improve, as I discuss below.

Wishful thinking has reigned

Wishful thinking has reigned in the future frigate program. The result is that the predicted date for initial operational capability is now 2034—thirteen years away. Let’s review the history of the program and its schedule.

In August 2015, concerned about the prospects of a shipbuilding ‘valley of death’ between the close of the air warfare destroyer (AWD) project and the start of construction on the future frigates, the government announced that it was bringing forward the frigate program. Construction was now to start in 2020—that is, construction would start in five years, even though the government hadn’t yet selected a design, let alone funded any work on it.

Later that year, the government commenced a competitive evaluation process to identify a reference ship design that was mature, in the water and in service. However, it said that it also required five significant modifications to the successful design: integration of the Australian CEA radar, the Aegis combat system, US weapons that were already in Australian service, the MH-60R Seahawk maritime combat helicopter and any modifications necessary to meet Australian regulatory requirements. Reconciling what were essentially completely contradictory requirements— mature yet fundamentally redesigned—would prove difficult.6

The list of contenders was whittled down to three, who were funded to conduct activities such as assessing the risks of modifying their designs. Those risks forced the government to acknowledge that it wasn’t possible to meet the 2020 construction deadline’,7 so the 2020 milestone was redefined as the start of ‘prototyping’ (that is, demonstrating, as BAE has recently, that the new shipyard in South Australia worked by making ‘representative ship blocks’ that will not actually be used in a frigate8), while the start of construction of actual ships was moved to the end of 2022. The prototyping deadline can only be described as a face-saving measure that was completely unrelated to any meaningful design milestone in the frigate itself.

In June 2018, the government announced that it had chosen BAE Systems’ Global Combat Ship based on the Type 26 frigate being built in the UK. That was in some ways surprising, since the Type 26 was the only one of the three contenders that was not mature, not in the water and certainly not in service. The build and sustainment benefits offered by the digital technologies used to design the vessel and the flexible capability provided by the ship’s multi-role mission bay no doubt played a role in the decision. Nevertheless, we’ve continued to see instability in the reference ship’s design. Nor did the reference design incorporate the CEA radar, Aegis combat system, in-service weapons or MH-60R helicopter required by Australia. In essence, the government accepted Defence’s recommendation to choose the least mature design and then perform fundamental modifications to it.9 It’s impossible to reconcile this with the requirement to select a mature design to reduce risk and enable a rapid start to construction. Moreover, it piled more risk on top of the risk in the submarine program.

Figure 1: An artist’s impression of the Hunter-class frigate

Source: Defence image library.

In that light, the four and a half years available to achieve the start of construction by late 2022 seem quite inadequate.

The growth of the Hunter’s design from around 8,800 tonnes to over 10,000 tonnes confirms the immaturity of the initial design.

If we add into the mix the facts that the UK’s program still requires design resources, the Canadians have also selected the Type 26 and are also seeking to implement substantial design changes, and Covid-19 has disrupted everybody’s plans, it’s perhaps not surprising that Defence has revealed a further 18-month delay to the start of construction.10

However, Defence officials recently informed a Senate committee in August 2021 that, while construction has been delayed by 18 months, delivery of the first ship has been delayed by two years, to 2031.11 Since Defence’s master schedule indicates a further two-year testing and evaluation phase before the first ship is deployable, that suggests that initial operational capability has now moved two years to the end of 2033. Or, put another way, even though the government’s 2020 DSU said we can no longer rely on 10 years of warning time, we’re looking at 12 years until the first of nine planned Hunter-class frigates provides useful capability (and around 18 years for the first SSN).

From the public information, it isn’t possible to determine how badly compromised the design is, or what further adjustments to capability or increases to cost and schedule will be required to finalise an acceptable design. A high-level schedule for the surface combatant transition based on the latest information from Defence is in Figure 2.

What does that delay mean? It would appear that the desperate attempt to bridge the valley of death by short-circuiting the selection and design processes for the future frigate has achieved little except to inject additional risk into the program. The 18-month delay to the start of construction—presumably to mid-2024—will create uncertainty for the ramp-up of BAE’s workforce and its suppliers and partners. The first two offshore patrol vessels are being built in Adelaide to ensure some continuity of workforce after the completion of the AWDs, but they’re due to be delivered in late 2021 and 2022 (noting that there are also signs of some delay there). It’s hard to see how ‘prototyping’ activities can serve as useful work for three and a half years.

Figure 2: Plan A—The current schedule for the surface combatant transition

Notes: Anzac- and Hobart-class lines provide age at retirement. Figure assumes Anzacs will be retired as Hunters enter service. Hunter delivery schedule incorporates Defence testimony to the Senate that delays to the start of construction will be recovered by the delivery of Ship 4. DDG replacement assumes no interruption to the two-year delivery drumbeat.

Sources: Defence testimony to Senate estimates hearings. Defence testimony to the Senate Economics Reference Committee inquiry into Australia’s sovereign naval shipbuilding capability, 6 August 2021. Australian National Audit Office, Major projects report 2019–20.

The maritime capability picture

A high-level summary is as follows. Under the current shipbuilding plan, despite the $575 billion that the government is spending on defence in the decade to 2029–30—of which $270 billion is going on new capability—Defence isn’t getting a single new warship to sea or even a single new VLS cell. Defence will have 12 new OPVs but, under the current plan, they’ll be equipped with nothing more lethal than a 40-mm gun. In short, the $270 billion isn’t delivering much additional maritime combat power. We’ll unpack that in more detail.

The Anzac-class frigates

That means under the current plan we’ll have to rely on the vessels we have already. The core of the surface fleet will remain the Anzac frigates for a long time to come. If we assume that an Anzac retires as a Hunter enters service, the last will retire around 2044, meaning that it will need to continue to serve for 23 years, and for 11 years after the Hunters start their dilatory delivery (that’s assuming the Hunter program can indeed make up the lost schedule as Defence officials have suggested12—historical experience suggests major projects delayed at this stage of development don’t recover schedule and often face additional delays). Their average age at retirement will be 36, well beyond their original design life. As a comparison, the Adelaide-class frigates averaged 28 at retirement.

The last two Anzacs will be 37 and 38. In fact, if the Anzacs are retired in the order they were commissioned, the last three aren’t even halfway through their service lives. And with HMAS Perth potentially serving until 2044, there are likely to be many members of its crew who have not yet been born.

Defence and its industry partners have done well to enhance the Anzacs’ capability over their life to date. They’re far from being the infamous ‘floating targets’ fitted for but not with capability that they once were.13

Figure 3: Anzac-class frigate HMAS Arunta, recently upgraded with the CEAFAR long-range air search radar


Source: Defence image library.

With the latest round of upgrades under the Anzac Midlife Capability Assurance Program well underway, Defence is commencing planning for a life-of-type extension to manage obsolescence issues and ensure the platform remains a relevant capability. But, considering that the last of the class will be in service for at least another 20 years, the wish list will be long. While some much-needed enhancements might be space and weight neutral, such as a new maritime strike missile to replace the venerable Harpoon, others will inevitably have additional space, weight and power requirements, such as a towed-array sonar, for which Defence recently issued a request for information to industry.

However, with the ‘industry standard’ for new classes of multirole frigates now in the 7,000+ tonne range, the Anzacs will necessarily be limited with only 3,600 tonnes. Perhaps the greatest limitation facing the Anzacs is magazine depth. While the class’s eight VLS cells can carry 32 quad-packed ESSMs, its radar and combat management systems are incompatible with the longer range SM-2 and SM-6. An Anzac might be able to shoot down a missile, but it won’t be able to shoot down the aircraft before it launches the missile. And with design margins largely consumed by capability enhancements over the past 20 years, it’s unlikely that the number of VLS cells can be increased. The Anzac’s ability to operate outside of the air defence umbrella provided by the Hobart class or a similar allied vessel will be increasingly limited in the face of a peer or near-peer adversary.14

The Hobart-class destroyers

The early travails of the AWD program have been well covered.15 Just as happened with the Collins-class submarines, early bad publicity has tainted their reputation, and the public perception is one of delays and cost blowouts. However, with the program now complete, it’s possible to take stock and offer a more complete assessment.

Since the restructuring of the program in 2014, it has delivered on the revised schedule. Also, while the program received a $1.2 billion budget increase, it’s likely that less than half that will be required.16 The class achieved final operational capability in August 2021, and the Chief of Navy has praised its capabilities.17 The class’s advanced air defence capabilities based on the Aegis combat management system, AN/SPY-1D radar and SM-2 air defence missile have been demonstrated, as has its cooperative engagement capability (CEC), which allows other platforms to provide targeting data—provided they also are equipped with CEC, which so far is a small number of platforms, such as other AWDs. Moreover, the class has performed well in trials of its antisubmarine warfare (ASW) capability, and its acoustic signature is reportedly better than that of the Anzacs, which was the previous benchmark for a good ASW platform. Ironically, the AWD is the Navy’s only vessel equipped with a towed-array sonar and is therefore its most capable ASW vessel.

Figure 4: The Hobart-class destroyers achieved final operational capability in August 2021

Source: Defence image library.

While the class is relatively new, Defence is already embarking on an upgrade to its combat management system, installing Aegis Baseline 9. In conjunction with CEC, this will allow it to employ the SM-6 missile’s long-range, over-the-horizon air defence capability, as well as its ballistic missile defence capability—which is increasingly urgent in the light of China’s development and deployment of anti-ship ballistic missiles.

Despite its strengths, the Hobart has weaknesses. As a class, it will have capacity constraints. Since the Navy only has three Hobart AWDs, its ability to consistently deploy more than one will be limited. Moreover, while the Hobarts’ 48 VLS cells are a huge improvement over the Anzacs’ eight, that’s still a limited number compared to other warships in the region, many of which have 96 or even 128. While the government has announced the acquisition of the Tomahawk land strike missile for the Hobart, it’s highly unlikely that will result in a credible strike capability with only three AWDs in the fleet.18 With the Anzacs’ limited magazine depth, the Hobarts are likely to have to load most of their VLS cells with air defence missiles, leaving little or no capacity for other weapons. Even then, in protracted operations against an adversary such as China, which can employ combinations of air-, sea-, land- and submarine-launched cruise missiles, anti-ship ballistic missiles and probably hypersonic missiles, the Hobarts’ air-defence arsenal could be depleted.

Also, the Hobart’s eight Harpoon maritime strike missiles provide no improvement over the Anzacs. The Harpoon is dated and, even if it’s replaced later this decade with a more advanced weapon, there’s little capacity to increase the number of weapons on the ship. In short, while the Hobarts have the ability to protect themselves and the vessels they’re escorting, they have limited lethality.

But, while noting the shortfalls, the Hobart Class is an impressive maritime combatant—and in Australia’s strategic environment, making the perfect the enemy of the good seems both dangerous and wrong.

Capability risk in the Hunter-class design

So, is the Hunter the answer for a more offensive ADF? The answer is no, as the shortcomings of the Hobart in offensive power are even greater in the Hunter.

Let’s review the Hunter’s capability. The Hunter class started off as a large ship for the capability it provided. It was around 8,800 tonnes full-load when it was selected—bigger than the Hobart-class destroyer—yet it will have fewer VLS cells, at 32. Over the past three years of design work to integrate the required modifications, the design has now reached 10,000 tonnes, according to Defence officials. It also has only eight maritime strike missiles, the same as the Anzac and Hobart. Overall, of all contemporary warships, it seems to be the most expensive for getting missiles to sea. That’s not good news in light of the DSU’s assessments about growing threats and the need for offensive capabilities.

Despite the large size, the design has minimal growth margins. Defence officials have stated that its target margins are around 270 tonnes, which equates to around 2.5%.19 That compares with the Hobart class’s roughly 600 tonnes at delivery for a smaller vessel. Defence officials have argued that the small margins are acceptable because the ship will be delivered with all the capabilities it requires. That’s a highly optimistic statement that isn’t supported by the life cycles of other vessels. The multi-mission bay seems to require design margin if it is to be used as originally conceived—to expand the ship’s capabilities over its life. It also presumes a reliable understanding of the future threat environment—something that’s inconsistent with the highly dynamic and rapidly evolving picture set out in the DSU and Defence’s demonstrated inability to predict the future.20 Already, the margins seem incapable of addressing what’s the major capability shortfall in the Hunter: the small number of VLS cells.

While the substantial increase in weight has caused some commentators concern about the performance of the propulsion system, Defence officials have testified that the performance will meet requirements. It does, however, seem to defy the laws of physics that a 15% increase in weight will have no impact on speed, efficiency and endurance.

The cost of the future frigate has also grown from $30 billion in the 2016 Integrated Investment Program to $35 billion in the 2017 Naval Shipbuilding Plan to $45.6 billion in the 2020 Force Structure Plan, which stated that the increase was in part driven by the drawn-out schedule adopted by the current approach to continuous shipbuilding.21 It’s possible that underestimation of the complexity of the design modifications and the spiralling weight increases have also played a role in the 50% cost increase.22

While the Attack-class submarine attracted the bulk of public criticism of the Naval Shipbuilding Program, concern is growing about the Hunter.23 In the light of the schedule and inherent capability limitations of the class, some of that concern appears to be warranted.

Defence officials have repeatedly told Senate committees that they’re confident about stabilising the design and getting the spiralling weight issue under control. That would mean that the best-case scenario is that in 12 years’ time Australia gets the first ship of a design that will be significantly under-gunned for a major surface combatant in the age of missiles and has limited margin for improvement. The worst case is that the Hunter is caught in a design spiral that’s unrecoverable, resulting in a severely compromised design that falls well short of requirements, encounters further schedule delay and doesn’t deliver value for money.

Analogous programs

While it may be tempting to believe that the challenges facing the Hunter class are due to poor leadership and that a change of management or structure in the Naval Shipbuilding Program will solve all its problems, that’s probably just not true—the issues are deeper than that. Analogous programs overseas have similar problems.

The trajectory of the Canadian program is virtually identical, for much the same reasons. Canada also chose the Type 26 as the reference ship for its future 15-ship surface combatant class. It, too, is seeking significant modifications to the reference ship design to increase the vessel’s air warfare capabilities. Consequently, the Canadian vessel’s weight is growing. That’s also caused schedule delays. Both have resulted in an increase in cost, according to the independent Canadian parliamentary budget office.24 The office also provided costs for different solutions, including mixes of high/low-capability ships that came at substantially lower cost.

So far, Canada has stuck to its original plan of 15 large frigates, but, in the face of its own budget pressures, the UK has adopted a high/low-capability mix. The Royal Navy aspires to an escort fleet of 24 ships—eight destroyers and 16 frigates. However, the UK found the Type 26 frigate to be unaffordable and is only acquiring eight for the Royal Navy instead of its originally planned 13 (only three have been ordered so far). Instead, it will achieve its numbers through the acquisition of five smaller, significantly less capable frigates: the Type 31.25 In fact, the Type 31 has no maritime or land strike capability, no towed array and only local air defence, making it essentially a patrol vessel rather than a major surface combatant. A follow-on class (potentially called the Type 32) to reach the objective number of frigates looks like being Batch II of the Type 31 rather than having the size, capability and cost of a Type 26. Early analysis indicates that the Type 32 will rely heavily on automation and autonomous systems.26

Another emerging issue with the UK’s Type 26 is that it looks like being delivered in a fitted-for-but-not-with configuration for key systems such as long-range air defence and anti-ship missiles. While that may have allowed construction to progress and keep costs within the contracted £3.7 billion for the first three ships, it will inevitably affect capability.27 That in itself isn’t a problem for Australia’s Hunter program, but it confirms that there’s no way to square the circle—demanding capability aspirations drive cost and schedule.

The US Navy selected the FREMM, which was one of the unsuccessful contenders for Australia’s future frigate program. While early cost estimates made it appear to be a bargain, independent Congressional Budget Office estimates suggest that the US Navy estimates are extremely over-optimistic.28 Moreover, despite describing the design as mature, the Navy is implementing design changes that are altering the hull, which will be likely to introduce cost and schedule risk.29

These brief comparisons illustrate a number of points. There’s no magic solution to the cost–capability spiral— if you want highly capable, crewed, multi-role vessels, they will cost a lot. Modifying designs will only increase cost and schedule. Attempts to reduce cost by stripping out capability are likely to result in vessels that aren’t survivable (as we’ve also seen with the US Navy’s littoral combat ship and may be the case with the UK’s Type 31). However, selecting mature, proven designs can reduce cost and schedule risk, particularly if navies can resist the temptation to do major design modifications.

The submarine transition

We’ve seen that the surface combatant transition is facing major risks. When faced with risk, organisations can seek to hedge. In the RAN’s context, that would suggest relying on other capabilities to balance the risk in its surface combatant program. The strategic challenge for Defence is that the other half of the Navy’s combat power— its submarine capability—is facing even greater risk than its surface combatants.

The government’s recent announcement that it will acquire, with assistance from the US and the UK, a fleet of SSNs may mitigate capability risk in the longer term, but in the shorter term it only exacerbates it. According to the government, the delivery of the first SSN is a long way off in the late 2030s. That’s even further away that the Attack class was. Moreover, the number of new SSNs will grow only slowly after that, perhaps on a three-year drumbeat.

When we examine the submarine capability transition from the Collins fleet to the SSN fleet, it hard to avoid the conclusion that there will be significant risk of decline in capability during the transition—potentially one that will be very difficult to recover from.

As with the Anzacs, an extensive program of upgrades is planned for the Collins-class submarines under the life-of-type extension (LOTE) program. According to Defence, this will have an ambitious scope, involving a new main motor, new diesel generators and new electrical distribution systems. Since even minor design changes to submarines can have major implications for space, weight, power and trim across the whole boat, this extensive program brings substantial design risks. While Defence has expressed confidence in the progress of design work on the LOTE to date, the minimal expenditure so far and the lack of involvement by the original designer of the Collins (Saab Kockums, which also has substantial experience in upgrades of other Swedish-designed submarines) suggest that there are still outstanding design risks and much work to be done.

The government has finally signalled that it will put all six Collins through the LOTE, yet that provides little additional risk mitigation. Even with a LOTE, the Collins can’t bridge the gap to the new SSN fleet. If the LOTE encounters technical challenges, they will either result in schedule delays, resulting in fewer submarines being available, or the LOTE could be de-scoped, meaning that capability enhancements would not be delivered. And if both the SSNs and the LOTE are delayed, the capability shortfall compounds.

By the time Collins boats are replaced by SSNs, they’ll be well into their forties. That’s older than the KRI Nanggala, the ageing Indonesian submarine that sank with all hands earlier this year. It’s hard to imagine them still being the ‘regionally superior capability’ that Defence said it’s aiming for. Their ability to undergo a second LOTE and still be relevant, as the Chief of Navy recently suggested, strains credibility.30

Moreover, operating small fleets of ageing boats is a receipt for disaster in terms of availability. Canada is attempting to do this with a fleet of four second-hand conventional British boats. Despite years of repairs and upgrades, the entire fleet still did not achieve a single sea day in 2019.31 The Chief of Navy has suggested that growth from the current 900 qualified submariners to around 2,300 will be required. Without boats that can regularly go to sea, it will be extremely challenging to maintain the Navy’s submariner numbers, let alone embark on a path to grow the much larger numbers that will be required for the future SSN fleet.32

It’s impossible from outside Defence to fully understand the risks to both transitions or appreciate how Defence is mitigating them, but it’s clear that both fleets (submarines and surface combatants) are facing very similar sets of risks. What that means is that it’s dangerous to rely on one to cover capability risks in the other. There are no guarantees that risks won’t be realised (as indeed we’re seeing already) in both.

A table illustrating the submarine transition is shown in Figure 5.33

Figure 5: The submarine transition plan

Notes: Collins line provides age at retirement. Figure assumes a Collins boat will be retired as an SSN enters service. SSN delivery drumbeat based on current Astute drumbeat which averages around three years.

Sources: SSN schedule based on the government’s announcement. Collins schedule based on Defence testimony to Senate estimates hearings.
 

Plain speaking about the National Naval Shipbuilding Enterprise

With the cancellation of the Attack-class submarine program, the naval shipbuilding enterprise is now in disarray. That has potentially disastrous consequences for the Navy’s capability. It’s time for some clear thinking about the purpose of the enterprise and what can be done to salvage it.

The purpose of continuous shipbuilding

The continuous shipbuilding enterprise exists for one purpose only—to deliver maritime capability to the ADF. Essentially, the enterprise is itself an industrial capability that’s been established to deliver the military capability the ADF needs when it needs it. Its purpose isn’t to deliver a particular number or kind of vessel per se. The order list is what’s set out in the Naval Shipbuilding Plan and Force Structure Plan, but that list will need to change as strategic circumstances require. Much discussion, however, conflates the overall enterprise with the current order list.

Moreover, ‘continuous’ has become the end in itself in order to preserve jobs in future decades. Continuous naval shipbuilding has potential benefits. That could include saving money, but the current approach to it drives higher costs for the following reasons:34

  • Artificially stretching out a program through a two-year delivery drumbeat is extremely inefficient.
  • Artificially stretching out a program also increases costs by providing more time for inflation and other cost indices to take effect.
  • Basing a continuous build program on a fleet of 12 vessels (the number for each of the planned surface combatant and the Attack-class submarine fleets), even with a stretched out two-year drumbeat, means vessels are replaced after 24 years, well before their economic life of type.
  • Continuous build based on a fleet of eight SSNs would drive an even more lethargic delivery drumbeat of around four years.35
  • Start-up costs are a small percentage of costs, particularly for large programs delivering nine or 12 vessels, and are outweighed by the overheads of slow delivery schedules.

The total investment in the shipbuilding program is frequently mentioned by the government and media. We should note that the $90 billion figure often cited was an understatement of Defence’s actual $130 billion estimate for the original build program of frigates, Attack-class submarines and OPVs. That’s even before the DSU added new classes to the future order book, such as logistics ships. And of course, that number will grow again, since the SSNs program will inevitably cost significantly more than the Attack class.

But a more relevant number is the annual cash flow the enterprise is absorbing. Before the cancellation, the shipbuilding enterprise planned to spend $2.5 billion in 2021–22, several years before the Attack and Hunter classes were to start construction. Once they started construction, the enterprise would likely have been spending $4 billion per year. Consequently, by the end of the decade, the Attack and Hunter programs would have spent over $20 billion— years before they deliver a single vessel. The number could have reached close to $35 billion by the time the first of each class has entered service—but it’s likely to be more by the time we get to the first SSN. Of course, the cancellation of the Attack class means less money will be spent this decade (more on that later), but the pursuit of SSNs simply makes most numbers even larger.

We need to ensure that those huge sums are delivering a timely capability return on investment. Otherwise, we’re at risk of establishing, at vast expense, a naval shipbuilding enterprise that’s designed to deliver jobs in Adelaide in the 2040s and 2050s, rather than using our newly established industrial capability to deliver maritime war-fighting capability in the most strategically uncertain period of the past 75 years.

If the naval shipbuilding enterprise can’t deliver strategically relevant capability well before 2030, then its entire purpose needs to be reconsidered. If it can’t deliver real capability when we need it—despite the government’s investment of $270 billion in new capability over the decade to 2030 (and $575 billion in total defence spending over that period)—it has failed its purpose.36

Rebuilding shipbuilding

While the delays to the Hunter’s schedule have affected the ramp-up of Australia’s shipbuilding capability, that is small compared to the impact of the cancellation of the Attack class. If the government achieves its goal of starting construction on SSNs by the end of the 2020s, that means that the start of construction for the Future Submarine Program will have been deferred by at least five years.

It’s hard to quantify what impact that has for small- to medium-sized enterprises that had planned and invested to prepare themselves to contribute to the Attack program. Around a month after the cancellation was announced, the Australian Industry Group told a Senate inquiry that the cancellation had profound implications for Australia’s industrial base. The Australian Industry and Defence Network informed the same inquiry that Naval Group had planned on having 2,000 local suppliers; 600 local companies had already qualified for Naval Group’s supply chain, and 200 had received actual contracts. Those that had qualified had spent an average of $200,000 to do so—a substantial investment for small enterprises. The Australian Industry and Defence Network also stated that local companies were already laying off employees in the wake of the cancellation.37

We can quantify the longer term disruption to the workforce by looking at Defence’s own estimates of the numbers that were to be employed on the Attack class. Defence’s estimate of the growth of the shipbuilding workforce over the decade is given in Table 1. We should note that these are only direct jobs; the government and Defence have stated that, once the workforce involved in supply chains is included, the total number is around three times greater.38 We can see that the cancellation of the Attack class has eliminated or put at risk over a quarter of current Australian shipbuilding jobs. By the middle of the decade that grows to over a third of planned jobs and to 42% by the end of the decade.

Table 1: Expected direct Australian jobs in the Attack-class submarine program

Source: Senator the Hon Linda Reynolds CSC, Minister for Defence, ‘Correspondence regarding naval shipbuilding workforce figures,’ 22 October 2020, online.

If those companies and workers—and the industrial capability they embodied—were simply no longer needed in Australia’s shipbuilding plans, that would be unfortunate for the individuals, but it wouldn’t be strategic loss. However, since the government is intending to build the future SSNs here, the abrupt interruption does indeed have strategic consequences. A cold start to the SSN program is likely to push its delivery schedule even further into the future. And with an expected tonnage substantially greater than the Attack class—potentially twice as great— even more workers will be required. A larger, healthier, and more capable shipbuilding ecosystem is absolutely essential to mitigating risk in the SSN program. The only way to develop that ecosystem is to build ships.

The government has announced a program to move companies and workers from the Attack program. While every effort should be made to retain these capabilities in the ecosystem, the intent is to redirect them to existing programs. Since those programs were already in the shipbuilding plan, they aren’t a net increase. New programs are needed to build additional industrial capability and prepare for the SSN program.39

The cancellation also has financial implications. $2.3 billion has been spent on the Attack program to date. More is to come as we settle with Naval Group, Lockheed Martin and their subcontractors. Defence will also need to negotiate outcomes with companies that invested in becoming certified suppliers but didn’t receive contracts.40 That’s extremely regrettable.

But looking forward we can see a similar effect to the workforce picture in the loss of cash flow that was to generate industrial and consequently military capability (Table 2). Well over one-third of spending on domestic shipbuilding projects has evaporated, with a billion-dollar annual spend cancelled. That amount was likely to grow to around to around $2 billion per year and 50% of the total once construction of the Attack class ramped up.

Table 2: Attack-class as a percentage of total shipbuilding cash flow (A$m)

Source: Defence Portfolio Budget Statements, Defence annual report.

That means that billions of dollars in capability is not being built. It also means that thousands of jobs related to maritime capability aren’t being generated along with the skill sets needed to fill them. Those skills, however, will still be needed when the SSN program commences. The amount that would have been spent on the Attack class over the coming decade could have been over $12 billion. That cash flow has now been freed up, presenting Defence with a range of opportunities that it can grasp.

Changing the plan

Despite being announced by the government in 2016, the continuous shipbuilding enterprise won’t deliver war-fighting capability until 2033, when the first Hunter-class frigate achieves initial operational capability. Changing the plan is necessary. With its SSN announcement, the government has indicated that it’s willing to change the plan, but more is needed to meet capability risks and develop shipbuilding capability.

The true value of a continuous naval shipbuilding capability is in its ability to switch production between classes and to accelerate builds as necessary. That means reconsidering whether the projects currently planned to be delivered as the first tranche of the continuous naval shipbuilding enterprise will deliver the capability the ADF needs when it needs it and to adjust the enterprise if necessary. Modifying the plan as necessary is built into the concept of continuous naval shipbuilding, which is why the frigate program has adopted a batch or tranche approach.

Those adjustments could take a range of forms—including changes in the near term as well as in the distant future. One is to accelerate the delivery drumbeat, but that can only be done once the designs are mature and in production. At the moment, the key challenge in the surface combatant program is that the design for the Hunter class is not mature, and there are worrying signs that it might not ever be without compromise to capability and the premature consumption of capability growth margins.

Large enterprises are inherently difficult, and if we walked away from them as soon as any challenges arose we would never achieve anything. But we also need to be clear-sighted about the need to adjust the enterprise when necessary and not be excessively wedded to the original plan if it isn’t meeting the purpose of the enterprise. The government changed the plan in the submarine program. We need to consider whether that time has come in the surface combatant stream. That doesn’t mean cancelling the Hunter-class program, but it does require considering other approaches to delivering the capability we need until the Hunter program delivers.

Having created an industrial machine for building maritime capability, we can now decide how to use it effectively to meet our changing strategic circumstances.

Hobart Block II

We need to adjust the plan for the surface combatant fleet. But if we’re trying to address the compounding risks in the shipbuilding program and maritime capability, we must at all costs avoid the path taken with our submarine capability. Starting from scratch with a new frigate design never produced in Australia simply increases risk.

Suggestions such as reorganising the management of the shipbuilding enterprise to get things back on track is another idea that sounds attractive but is likely to deliver only marginal changes to timelines—you can’t simply short-circuit the design work needed in the frigate and submarine programs.

The concept

But there is one option that we could consider: building more Hobart-class destroyers.

The idea of building more than the original three Hobart-class vessels isn’t a new one. We’ve known at least since the publication of the 2009 Defence White Paper and its underpinning investment plan that there would be a shipbuilding gap between the close of the AWD program and the start of the replacement for the Anzac class, resulting in a ‘valley of death’ for continuity of workforce and skills.41 Many commentators have proposed the construction of one or more AWDs to bridge the gap.42

Why we haven’t is one of the most perplexing questions in Defence’s very mixed history of capability decisions. Quite frankly, why we didn’t start our continuous shipbuilding enterprise with some actual continuous shipbuilding by extending an existing program, which was achieving substantially greater efficiency with each vessel, is mystifying. Regardless of the reason, no government adopted this path, resulting in the rushed process to accelerate the construction of the OPV and future frigate to bridge the impending valley of death. As we’ve seen, that process was permeated with wishful thinking, particularly about the time frames needed to perform the design changes necessary for the Hunter class, with the result that even desperate measures such as the construction of the first two OPVs in Adelaide haven’t been able to bridge the valley.

A standard argument deployed against the acquisition of additional AWDs has been the hoary old chestnut of ‘balance’—the argument that having more than three AWDs would ‘unbalance’ the Navy. Balance is one of the pieces of theology that thrive in Defence. It’s theology because it has the status of revealed truth handed down from on high, it’s not based on any rigorous evidence, and it’s used to shut down debate or the airing of alternative viewpoints. The theology of balance relies on certain magic numbers that are themselves, of course, part of the theology. For example, a balanced surface combatant fleet supposedly consists of three destroyers and nine smaller, less capable ships for a total of 12. Where those numbers come from isn’t clear, other than historical precedent—the Navy previously had three Perth-class destroyers for air defence, for example, and before that three Daring-class destroyers.

Three air defence vessels are in fact a strange number, since there’s another number three that has more rigour to it and that’s the rule of thumb that, for every three platforms you have, you can reliably get one to sea. So the Navy can reliably get one air defence vessel to sea, which is a rather inadequate number in the light of Australia’s vast area of strategic interest.

At the heart of the ‘balanced force’ case for rejecting further AWDs was the assumption that the AWDs are too big and too expensive for a fleet of 12 surface combatants. For the ASW role, the Navy could manage with smaller, more affordable ships. Those arguments have evaporated: the size and cost of the Hunter exceed those of the Hobart. In fact, the Hobart and the Hunter are very similar vessels despite one being called a destroyer and the other a frigate. The Hobart has 16 more VLS cells, which gives it an advantage in the air defence role, while the Hunter will be likely to have somewhat better ASW performance by virtue of its quieter propulsion system. However, with the same combat management system, very capable radar and CEC, they’re likely to be largely interchangeable in many roles.

While the Navy once thought that more than three AWDs would unbalance the force, it’s essentially acquiring 12 destroyer-sized vessels.

The big advantage that the Hobart has over the Hunter is that it’s an existing design that’s been successfully delivered and entered service. With the operational test and evaluation process for the Hobart successfully completed on the way to the declaration of full operational capability in August 2021, the vessels are a known quantity. That doesn’t just include advanced air warfare but also very good ASW capabilities by virtue of its integrated sonar suite, which includes a medium-frequency hull-mounted array, low-frequency active towed array, and Seahawk Romeo with an active dipping sonar. In short, the ship exists and it works. Moreover, any additional vessels will immediately be able to leverage an existing support system.

Figure 6: A Seahawk MH-60R ‘Romeo’ maritime combat helicopter with a dipping sonar

Source: Defence image library.

This then raises the question of whether the construction of a further number of Hobart-class vessels, essentially a Hobart Block II, can provide a hedge against the risk in the Navy’s capability transitions and a faster boost to the ADF’s offensive capability than is likely to be possible through the Hunter program alone. I’ll look at the advantages before I consider the challenges.

Figure 7 shows a transition that includes the build of three Hobart Block II vessels before the first Hunter.

Figure 7: A possible Plan B involving the build of three Hobart Block II DDGs

Notes: Figure assumes a three-ship build of a Hobart Block II, with the build taking six years and a two-year drumbeat. Hunter-class schedule is delayed by an additional year to allow design to stabilise and be de-risked. First two Anzacs are retired one-year earlier than under Plan A, but the remainder follow the same retirement date as Plan A. Overall, this allows the fleet to achieve 15 vessels. Figures in the final box of each row indicate the ship’s age at retirement.

Sources: Defence testimony to Senate estimates hearings. Defence testimony to the Senate Economics Reference Committee inquiry into Australia’s sovereign naval shipbuilding capability, 6 August 2021. Australian National Audit Office, Major projects report 2019–20.

The final Hobart-class destroyer required four and a half years from being laid down to commissioning. Of course, with the interruption to the program, it would be unreasonable to assume that the first of a second batch could be built as quickly. Let’s assume a rapid approval process and a build taking around six or seven years. The first could enter service around 2028. With the second following in 2030 and the third in 2032 (or sooner), the Navy could have three additional, highly capable combatants before the first Hunter is scheduled to achieve initial operational capability.43 While it would be important to limit modifications to avoid replicating the problems encountered by the Hunter, Navantia has done early design work to integrate the Australian CEA radar, improve its noise signature and install a second hangar, allowing the operation of two helicopters. The last two measures would provide a significant boost to the vessel’s ASW capability.

The capability advantages of this proposal are clear. It would get a large number of VLS cells to sea this decade, unlike the current shipbuilding plan that does not get any more to sea until 2033. It would also double the number of towed sonar arrays in the surface fleet. It would provide three more vessels that could provide area air defence to amphibious and support vessels and to less capable combatants, whether they’re Anzacs, modified OPVs or new classes of uncrewed or minimally crewed vessels.

This proposal is agnostic on the final size of surface fleet and on the issue of how many Hunters should be acquired. If, despite all the changes over previous decades in our strategic circumstances and the clear-headed assessments of the DSU, the magic number for surface combatants is still 12, the revised plan would achieve that number of surface combatants by around 2028. Moreover, it would allow two Anzacs to retire several years earlier. If readers are concerned that having six Hobarts obviates the need for the final three Hunters, one might respond that it’s strange reasoning that prioritises ships that won’t be delivered until the 2040s ahead of our current pressing capability requirements. Moreover, with Hunter 7 not due to start construction until the late 2030s, we still have around 16 years to work out how we’ll ensure continuity of naval shipbuilding.

If, however, we accept that our circumstances have changed and a larger fleet is needed, it would grow the fleet to 13 vessels by around 2030 and 14 by 2038 with the arrival of the fourth Hunter.44 In contrast, the current plan does not reach 12 until 2053 and never gets beyond that number (refer to the schedules in figures 2 and 6). With a larger fleet of 15 surface combatants, the serene clockwork of the shipbuilding plan need not be disturbed: all nine Hunters would be built, and the first Hobart replaced as currently scheduled.

Unlike the current plan, this approach would provide a return on the expenditure on shipbuilding this decade. It would also demonstrate to an increasingly sceptical Australian public that the continuous Naval Shipbuilding Plan that they’re paying for is about building ADF capability, not merely jobs in Adelaide.

Implementation

After the troubled early stages of the AWD build, the subsequent reform program established a very successful management and implementation model. The key was bringing in Navantia, the original designer, to manage construction. ASC remained as the builder but essentially worked under Navantia’s instruction. Raytheon remained as the combat systems integrator.45 The reformed management arrangements delivered all three ships to the revised schedule, and most of the budget increase won’t be required. The key to the successful delivery of a Hobart Block II would be to retain the management structure adopted under the reform program.

The only viable shipyard in Australia for the project is the surface shipyard at Osborne South in Adelaide. It’s important to remember that the Australian Government paid for the $535 million upgrade to the facility and retained ownership of it. The government-owned enterprise Australian Naval Infrastructure owns and manages the shipyard and is responsible for meeting the requirements of its tenants. The government implemented this arrangement precisely so that it could choose whichever designs and shipbuilders met its requirements. Defence has confirmed that, in accordance with the Naval Shipbuilding Plan, the Osborne Naval Shipyard was ‘flexibly designed to accommodate the potentially varying needs of future shipbuilders’.46 In short, the shipyard wasn’t designed to build only Hunter-class frigates.

There may be some concerns that the original build strategy, which relied on the construction of blocks in various yards before finally assembly at Osborne, can’t be replicated. It’s true that the industrial landscape has changed— BAE’s Melbourne shipyard, which built blocks for the original project, no longer exists—but such fears are probably exaggerated, for two reasons. The first is that the redesigned and now functioning Osborne shipyard has the capacity to build blocks itself. The second is that, despite concerns about the valley of death, the Australian naval shipbuilding ecosystem has developed significant capacity. Forgacs, which built blocks for the AWD project at Tomago, near Newcastle, was acquired by the highly capable engineering company Civmec as it built its shipbuilding credentials to compete for the OPV project. Civmec has demonstrated those credentials in the build of the OPV.

It’s entirely possible that Civmec could build blocks for a second tranche of Hobarts. In fact, the concept of a South Australian and a Western Australian shipyard feeding into the one production line is the model envisaged in the RAND Corporation’s 2015 report on the future of Australian naval shipbuilding.47

Implementation challenges

There are of course implementation challenges that would need to be resolved. We’ll look at three key ones.

Radar selection and integration

The first is that some systems used on the Block I Hobart are no longer available in the same configuration. A key one is the radar. Under Defence’s current investment plan, the Hobart class is to undergo an upgrade to its combat management system, moving to the latest version of Aegis, which is Baseline 9. It’s also going to have its tactical interface (the system that runs all the other parts of the combat system and integrates them with Aegis) replaced.

Currently, it uses the Australian Tactical Interface (ATI) produced by Kongsberg. As part the Navy’s programmatic approach to combat management systems, which mandates Saab’s combat management system for all classes in the surface fleet, the ATI will be replaced by Saab’s Australian Interface (AI). This will ensure commonality with the Hunter, which will also use Aegis in combination with Saab’s interface.

So, the choice of combat management system is straightforward (noting that the combination of Aegis and Saab’s AI isn’t yet in service), but the choice of radar is not. The AN/SPY-1D radar used on the Block I Hobart is no longer the current version being installed by the US Navy, which has moved to the AN/SPY-6 radar for its Flight III Arleigh Burke-class destroyers. The Australian Government has mandated that the Hunter use CEA Technologies’ CEAFAR radar. Consequently, a Hobart Block II would need to use either the AN/SPY-6 or the CEAFAR.

Both approaches would have issues. Defence apparently has no plans to replace the AN/SPY-1D radar on the Hobart class with either the AN/SPY-6 or the CEAFAR radar. Therefore, if the Hobart Block II installed the AN/SPY-6, the Navy would have three different configurations on its major surface combatants, which is not desirable. Installing the CEAFAR radar on the Hobart Block II would provide commonality with the Hunter class but would require design work. Fortunately, some of that has been done already for the competitive evaluation process for the future frigate.

Integration work already done for the Hunter could also be leveraged.

Making an informed decision on this issue will require robust technical analysis, including a frank assessment of schedule risk arising from any integration risks, but an initial review of the public information suggests that the integration of CEAFAR is achievable and, overall, the better path to take.

Shipyard capacity at Osborne

The only viable shipyard in Australia for the Hobart Block II is the redesigned surface shipyard at Osborne in Adelaide. Construction of the Hobart Block II and the early Hunters would overlap at some point. However, Defence officials have stated that the new shipyard was designed with the capacity to produce vessels significantly faster than the currently planned two-year drumbeat for the Hunter program. Moreover, the whole idea of the national shipbuilding enterprise was to be able to construct different designs in the same facilities, and that’s what drove the huge investment in the modern, digitally enabled shipyards. Also, if there are capacity issues at Osborne, there are other ways to address them, for example by drawing on Civmec’s developing shipbuilding expertise and having it build blocks in Western Australia.

Funding

The cost of a Hobart Block II vessel will no doubt be substantially less than that of a Hunter, if for no other reason than that the Hobart is substantially smaller. The fact that Australia has already built three would be likely to have cost benefits, even though the original program has been completed and the management and workforce dispersed. While Defence doesn’t publish the unit sail-away cost of its vessels, it’s likely that the cost of the final AWD was under $2 billion in current dollars.48 If we take the $45 billion out-turned budget for the Hunter program, remove program-level costs (design, project management, intellectual property and so on) and convert it to current dollars, it’s hard to see its unit cost being much less than $3 billion and certainly more than $2.5 billion in current dollars.

Nevertheless, as a new entry into Defence’s investment program, a Block II Hobart build would require a funding line. The issue isn’t just about the total funding required, but about managing annual cash flow. To date, the Hunter program has failed to spend as planned. With the program delayed by a further two years, that will inevitably continue, and some funding currently programmed for the Hunter will become available, at least in the short term. But, at some point, when both the Hunter and a Block II Hobart program are in construction, the cash-flow requirement will be substantially greater than Defence currently plans for the major surface combatant stream.

But the problem facing Defence is not a shortage of cash, but a massive surplus. First, the rapid ramp-up of Defence’s acquisition funding line set out in the 2020 DSU, combined with the impact of Covid-19 on global supply chains and defence industry’s ability to operate, has meant that Defence has underspent its acquisition budget. In 2020–21, the shortfall was around $1 billion.49 With another large increase in acquisition funding planned for 2021–22 and the effects of the pandemic still not resolved, it’s likely that there will be another shortfall.

The second source of funding is the huge amount of cash freed up by the cancellation of the Attack-class program, as discussed above. Defence planned to spend around $1 billion in 2021–22, and it’s likely that would grow to around $2 billion per year in the second half of the decade. The total over the decade could have been more than $12 billion. Certainly, the ramp-up of the SSN program will require funding, but that’s still years away and there’s simply no way it can absorb all that cash flow. Investing part of it in a Block II Hobart build ensures that funding will deliver military and industrial capability.

Developing the shipbuilding ecosystem

We discussed earlier the need to rebuild the shipbuilding ecosystem. Spending those funds on a Block II Hobart build also means that we’ll start developing the ecosystem needed to support the SSN program. While it may appear that a Block II Hobart program in Adelaide will compete with the Hunter for resources, in particular workforce, it’s more useful to regard it as the only way to grow the workforce, skills and supply chains so that the shipbuilding enterprise is ready for the challenge of the SSN program.

Virtually all observers have noted that the biggest risk to the Naval Shipbuilding Program is the availability of workforce, particularly in Adelaide. Defence’s own workforce analysis predicted that the direct workforce in Adelaide would grow to around 5,000 by the end of the decade, or over 80% of the total nationally (Table 3).

Table 3: Percentage of total direct shipbuilding workforce in Adelaide before cancellation of the Attack class

Source: Linda Reynolds, ‘Correspondence regarding naval shipbuilding workforce figures,’ 22 October 2020, online.

With the fundamental revision of the future submarine plan, the nature of the workforce challenge has changed— the requirement will ramp up more slowly, but the workforce will likely need to be bigger. And even more of that will need to be generated in Adelaide. We need to start growing that workforce now, and the growth needs to be in addition to projects that were already in the shipbuilding plan and the Force Structure Plan.

Certainly, there are differences between building surface ships and submarines, but it’s easier to retrain an experienced maritime tradesperson to transition from one from the other than it is to train them from scratch. And the complex project management skills that will be needed in the SSN program take years, even decades, to develop. We need to retain what we’ve generated already and build on that though a second Hobart build.

We can make similar argument about the small- to medium-sized enterprises that will form the supply chain for an SSN program.

Hedging against a range of futures

We can’t know the future. That’s why we adopt hedging strategies. The best ones hedge against a range of possible futures. A Hobart Block II does that. As I’ve discussed, one future is the currently planned transition from Anzac to Hunter. But there are in fact many possible future force structures. Another one involves growing the surface combatant fleet beyond 11 or 12 vessels.

Another potential force structure element that hedges against risk involves enhancing the OPV so that it can contribute to combat missions. That could include installing anti-ship missiles or towed-array sonars. The OPV could also contribute to ASW by being the mothership for uncrewed aerial vehicles that can drop sonar buoys or deliver ASW weapons such as the very lightweight torpedo currently under development. Once we free ourselves from the mental shackles of the idea that every maritime platform has to be able to do every task and defeat every threat by itself, vast possibilities are opened up.50 An armed version of the OPV that doesn’t pretend to be a multi-role platform but has useful offensive or sensor capabilities looks attractive as a near-term addition to the Navy’s lethality that complicates any adversary’s decisions.

Some OPVs could be equipped with a limited air defence capability. That could include Mk-29 or Mk-41 launchers for small numbers of ESSMs, or the RIM-116 Rolling Airframe Missile (SeaRAM), but those have relatively short ranges. They could be supplemented by new active self-protection technologies as they become available, such as versions of systems made by Australian companies Droneshield and EOS. Nevertheless, the vessel itself is likely not to have the space, weight and power margins for a large air defence radar array or deep missile magazines. That means that, in higher threat environments, it would need to operate under the air defence umbrella of a major surface combatant such as a Hobart-class destroyer.

Acquisition of a Hobart Block II would also de-risk the transition to what may well be our eventual future, which is a disaggregated mix of crewed and largely uncrewed naval platforms enabled by maturing autonomous systems. While ‘the small, the smart and the cheap’ have much to offer in terms of disaggregating expensive capabilities and providing greater mass and ‘attritability’, they’ll be likely to operate in teams with crewed vessels for at least their first several generations. Moreover, they’ll also require air defence from a platform such as the Hobart, although they could also contribute to it by providing greater magazine depth in the form of uncrewed or minimally crewed arsenal ships, for example.

With no new submarines coming until the late 2030s at the earliest, surface action groups consisting of Hobarts and OPVs equipped with offensive weapons and serving as the motherships for swarms of uncrewed systems can provide some of the effects the ADF seeks from its future submarines, such as land strike, maritime strike and antisubmarine warfare. Certainly, those combinations of systems would perform those roles differently from submarines, but what choice do we have if we want more capability? Our obsessive search for the perfect submarine capability has resulted in us being further away than ever from having new submarines.

In sum, investment in a Hobart Block II is consistent with and de-risks a range of futures. They’ll be part of a future in which the ADF continues to rely on large, crewed systems such as the Hunter, but they’ll also be consistent with a future in which the ADF moves to a force structure based on crewed–uncrewed teaming. Even as it becomes more disaggregated, that latter force is going to be built around large, multi-role platforms for a considerable time to come.

Conclusion

Defence’s decision-making processes have placed the Navy in an extremely precarious position and can only be described as a failure of strategic planning. The current approach makes strategic sense only if one can assume that Australia won’t be involved in major conflict for the next 20 years and that, if we ever are, we can rely on the US for whatever assistance we need. Both of those propositions should not have been held as articles of faith when the shipbuilding plan was formulated in the second half of last decade; they’re even more untenable today in the wake of the 2020 DSU.

Having embarked on a highly risky path with its submarine fleet, Defence didn’t hedge strategic risk in the path it chose for the other half of its combat fleet. Unconstrained capability ambitions in both programs have resulted in unbounded cost, the need for time-consuming design work, and schedules extended far beyond what was envisaged when the programs were established. Despite the risks, Defence’s main mitigation strategy is simply to extend the lives of current platforms and incrementally improve their capability at a time when threats, particularly to surface vessels, are rapidly growing. Even if the Hunter-class and the SSN programs deliver, the risks involved in the current plan mean that it can’t continue without serious adjustments.

A Hobart Block II is potentially part of the solution. As a mature design that Australia has already successfully built and brought into service, it can provide real capability before the Hunter and SSN programs. But there’s no one silver bullet. A broad range of mitigation measures are needed across the ADF’s force structure to distribute capability and hedge risk.

Just as importantly, we must recognise that Defence’s traditional decision-making processes brought us to this unacceptable position. A fundamental reconsideration of how Defence assesses its requirements and develops solutions for them is just as important as identifying remedies for the looming capability shortfalls that Defence has created for itself.


About the author

Dr Marcus Hellyer is a Senior Analyst focusing on defence economics and military capability. Previously he was a senior public servant in the Department of Defence, responsible for ensuring that the government was provided with the best possible advice and recommendations on major capital investments. He also developed and administered Defence’s capital investment program. Marcus has also worked in Australia’s intelligence community as a terrorism analyst. Before joining the public service, Marcus had a career as an academic historian in the United States.

Acknowledgement

I would like to acknowledge the contributions of my colleague at ASPI, Mr Michael Shoebridge. In addition to the detailed comments he made on drafts of this paper, our constant engagement and exchanges on defence capability shape all of my work. I would also like to thank several external reviewers who made insightful contributions to this paper.

About ASPI

The Australian Strategic Policy Institute was formed in 2001 as an independent, non-partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices. ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally. ASPI’s sources of funding are identified in our Annual Report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements. It is incorporated as a company, and is governed by a Council with broad membership. ASPI’s core values are collegiality, originality & innovation, quality & excellence and independence.

ASPI’s publications—including this paper—are not intended in any way to express or reflect the views of the Australian Government. The opinions and recommendations in this paper are published by ASPI to promote public debate and understanding of strategic and defence issues. They reflect the personal views of the author(s) and should not be seen as representing the formal position of ASPI on any particular issue.

Important disclaimer

This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.

© The Australian Strategic Policy Institute Limited 2021

This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, educational institutions (including schools, independent colleges, universities and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from ASPI and free of charge.

First published November 2021

Published in Australia by the Australian Strategic Policy Institute

Funding Statement: No specific sponsorship was received to fund production of this report. 

  1. Scott Morrison, ‘Australia to pursue nuclear-powered submarines through new trilateral enhanced security partnership,’ media statement,
    16 September 2021, online. ↩︎
  2. Marcus Hellyer, From concentrated vulnerability to distributed lethality—or how to get more maritime bang for the buck with our offshore patrol vessels, ASPI, Canberra, 2019, online. ↩︎
  3. Department of Defence (DoD), ‘Sovereign Guided Weapons and Explosive Ordnance Enterprise’, Australian Government, Canberra, 2021, online. ↩︎
  4. DoD, Naval Shipbuilding Plan, Australian Government, Canberra, 2017, online. ↩︎
  5. DoD, 2020 Defence Strategic Update, Australian Government, Canberra, 2020, 27, online. ↩︎
  6. It became much more difficult once Defence did not recommend Navantia’s candidate—the one vessel that already met most of the core requirements, including Aegis, US weapons, the Romeo helicopter and Australian design and regulatory standards. ↩︎
  7. Although it’s been claimed that Navantia could have started construction by 2020 on blocks not affected by design changes. Without Defence releasing Navantia’s response to the competitive evaluation process, it’s not possible to confirm this. ↩︎
  8. BAE Systems, ‘Hunter Class Frigate Program rolls out first steel unit’, media release, 13 October 2021, online. ↩︎
  9. None of the three contenders used all of the systems mandated by the government (CEA radar, Aegis combat system, US weapons suite and Seahawk MH-60R helicopter); however, Navantia’s offering based on the Hobart class had already successfully integrated them all, except the radar. ↩︎
  10. Cameron Stewart, ‘Frigate hell: this could dwarf our submarine drama’, The Australian, 31 August 2021, online. ↩︎
  11. Senate Economics References Committee (SERC), Inquiry into Australia’s Sovereign Naval Shipbuilding Capability, public hearing, Australian Parliament, 6 August 2021, 21–22, online. ↩︎
  12. SERC, Inquiry into Australia’s Sovereign Naval Shipbuilding Capability. ↩︎
  13. Note that these enhancements have come at significant cost and have taken a substantial part of the fleet out of the water for extended periods. ↩︎
  14. While 32 ESSMs may sound like a lot, in reality that number of missiles will run short quite quickly (assuming the vessel isn’t sunk or damaged first). Effective missile defence needs to operate in depth. If we define three layers of defence as outer defence, area defence and self-defence, the ESSM is a self-defence weapon with some ability to provide limited area defence to a closely escorted high-value unit (such as an LHD). An Australian maritime taskforce doesn’t have an outer defence layer because it doesn’t have an organic fast jet capability. That means it has limited ability to complicate an adversary’s targeting and overall attack plan, meaning that the adversary can optimise the size, direction and frequency of its salvos to best effect. An AWD can provide area air defence but will be forced to respond to salvos that have been optimised to overwhelm it.
    A key factor in how many missiles are needed to defeat a threat is the number of opportunities the defender has to engage. An AWD will have multiple opportunities to shoot, assess the effect and then if necessary shoot again, potentially moving from SM-6 to SM-2 to ESSM. An Anzac, particularly if operating by itself, will have only the final layer. That means it may have only one opportunity to shoot, particularly against very fast threats. Consequently, it may need to fire many weapons to ensure a high probability of kill. That means its missile holdings could fall below a safe level even after a small number of engagements, each involving only a small number of threat missiles. Put another way, a small number of ‘nuisance raids’ involving relatively unsophisticated weapons could result in a mission kill, as the frigate would need to return to southern Australia to reload.
    For a classic overview of this issue, see Ronald S Farris, Richard J Hunt, ‘Battle group air defence analysis’, Johns Hopkins APL Technical Digest, 1981, 2(4):302–307, online. ↩︎
  15. For example, Australian National Audit Office, Air Warfare Destroyer Program, Australian Government, Canberra, 2014, online. For a very accessible history of the program, see Robert Macklin, Air warfare destroyer: the game-changer, ASPI, Canberra, 2018, online. ↩︎
  16. In 2015, the government approved a $1.2 billion budget increase (a real cost increase, in Defence’s terminology). According to the 2021–22 Defence Portfolio Budget Statements, the project is planned to close this year. With $8,147 million of its $9,094 million budget spent at 30 June 2021 and $238 million in further expenditure planned for 2021–22, the project should close with around $700 million remaining. ↩︎
  17. DoD, ‘Navy’s most advanced warships ready for operations’, news release, Australian Government, 13 August 2021, online. ↩︎

Snapshot in a turbulent time: Australian HADR capabilities, challenges and opportunities

c

Australia has demonstrated the capacity and capabilities for fast, scalable responses to disasters and humanitarian crises in recent history. Australian governments, agencies, NGOs and the public have proven determined and flexible in both domestic and regional disasters and humanitarian crises. 

Looking forward, Australia’s established capabilities are facing new and growing challenges in disaster preparedness and response. The Indo-Pacific is facing a complex network of established, evolving and intersecting climate, conflict and human-security risks.

Without innovation in strategy and capabilities, the financial cost of regional disasters will continue to vastly outpace the capacity of Australia to fund preparedness and response efforts comprehensively enough to mitigate the human and strategic security risks those disasters pose.

This report presents a snapshot view of the current Indo-Pacific threatscape looking forward for Australia; takes a retrospective look at how key Australian HADR capabilities have been developed through lessons from domestic and regional disasters; considers the possible value in a strategy for what value-add northern Australia can bring to national HADR capabilities; and presents three areas of ‘low-hanging fruit’ for HADR capability uplift.

The architecture of repression

Unpacking Xinjiang’s governance

This report is a part of a larger online project which can be found on the Xinjiang Data Project website.

What’s the problem?

Since the mass internment of Uyghurs and other indigenous groups1 in China was first reported in 2017, there is now a rich body of literature documenting recent human rights abuses in the Xinjiang Uyghur Autonomous Region.2 However, there is little knowledge of the actual perpetrators inside China’s vast and opaque party-state system, and responsibility is often broadly attributed to the Chinese Communist Party,3 Xinjiang Party Secretary Chen Quanguo,4 or President Xi Jinping himself.5

For accountability, it is necessary to investigate how China’s campaign against the Uyghurs has been implemented and which offices and individuals have played a leading part. The current knowledge gap has exposed international companies and organisations to inadvertent engagement with Chinese officials who have facilitated the atrocities in Xinjiang. It has also prevented foreign governments from making targeted policy responses.

Finally, it is essential to carry out such an investigation now. Amid debate internationally about whether the recent events in Xinjiang constitute genocide,6 Chinese officials are actively scrubbing relevant evidence and seeking to silence those who speak out.7

Figure 1: A ‘resist infiltration, snatch the two-faced’ mass oath for school teachers in Hotan Prefecture in 2017. Many women are visibly crying.

Source: ‘Ten thousand teachers in Hotan Prefecture take part in ‘speak up and brandish the sword’ mass oath in Keriye County’ [和田地区万名教师集体发 声亮剑宣讲宣誓大会在于田举行], Keriye County official WeChat account [于田零距离], 16 June 2017, online.

What’s the solution?

This project maps and analyses the governance mechanisms employed by the Chinese party-state in Xinjiang from 2014 to 2021 within the context of the region’s ongoing human rights crisis. To that end, the authors have located and scrutinised thousands of Chinese-language sources,8 including leaked police records9 and government budget documents never before published. This archive of sources is made publicly available for the use of others.

For policymakers, this report will provide an evidence base to inform policy responses including possible sanctions. For the general public and anyone whose interests are linked to Xinjiang and China more broadly, this project can inform risk analysis and ethical considerations.

Finally, a detailed understanding of Xinjiang’s governance structures and processes and their relationship to wider national policies can contribute to a more concrete understanding of the Chinese party-state and its volatility.

Figure 2: American brand Nike was implicated in Xinjiang’s coercive labour transfer schemes. Uyghurs transferred from Xinjiang receive Chinese language and indoctrination classes at Nike’s contractor Taekwang factory in Qingdao, Shandong, around June 2019.

Source: ‘Municipal United Front Work Department conducts Mandarin training at Qingdao Taekwang “Pomegranate Seed” Night School’ [市委统战部’石榴
籽’夜校 走进青岛泰光举办普通话培训班], Laixi United Front official WeChat account [莱西统一战线], 1 July 2019, online.

Executive Summary

The project consists of two parts.

  • An interactive organisational chart of some 170 administrative entities that have participated in Xinjiang’s governance since 2014. The chart includes a brief profile of each party, government, military, paramilitary and hybrid entity at different bureaucratic layers, and more.10
  • This report, which highlights the governance techniques and bureaucratic structures that have operationalised the Chinese party-state’s most recent campaigns against the Uyghurs in Xinjiang.

The report is structured as follows.

Section 1: Background

This section is an introduction to the 2014 Counterterrorism Campaign and the 2017 Re-education Campaign in Xinjiang, which represent a top-down response to the perceived radicalisation of Uyghur society and a systematic effort to transform Xinjiang and its indigenous inhabitants.

Section 2: The return of mass campaigns

The crackdown against the Uyghurs has a striking resemblance to Mao-era political campaigns. ASPI can reveal that, in addition to mass internment and coercive labour assignments, Xinjiang residents are also compelled to participate in acts of political theatre, such as mass show trials, public denunciation sessions, loyalty pledges, sermon-like ‘propaganda lectures’, and chants for Xi Jinping’s good health. In doing so, they’re mobilised to attack shadowy enemies hiding among the people: the so-called ‘three evil forces’ and ‘two-faced people’.

Despite widespread recognition that mass political campaigns are ‘costly and burdensome’, in the words of Xi Jinping, the party-state has again resorted to them in Xinjiang. This section analyses the party-state’s reflexive compulsion for campaigns, and campaign-style governance, which is an intrinsic feature of the Chinese political system that’s often overlooked in the current English-language literature.

Section 3: Hegemony at the grassroots

ASPI researchers have gained rare and in-depth insights into Xinjiang’s local governance after analysing thousands of pages of leaked police files. This section focuses on the case of one Uyghur family in Ürümqi. Like at least 1.8 million other Uyghurs, Anayit Abliz, then 18, was caught using a file-sharing app in 2017. He was interned in a re-education camp and eventually ‘sentenced’ by his Neighbourhood Committee—a nominally service-oriented voluntary organisation responsible for local party control.

While he was detained, officials from the Neighbourhood Committee visited his family members six times in a single week, scrutinizing the family’s behaviours and observing whether they were emotionally stable.

Draconian control measures are typical of mass political campaigns, including those in Xinjiang.

During the crackdown against the Uyghurs, authorities implemented five key policies (including the ‘Trinity’ mechanism, which is first reported by ASPI here) that led to the unprecedented penetration of the party-state system into the daily lives of Xinjiang residents. Those policies gave Xinjiang’s neighbourhood and village officials exceptional power to police residents’ movements and emotions, resulting in the disturbing situation in which a Uyghur teenager’s social media posts about finding life hopeless were deemed a threat to stability and triggered police action.

Xinjiang’s community-based control mechanisms are part of a national push to enhance grassroots governance, which seeks to mobilise the masses to help stamp out dissent and instability and to increase the party’s domination in the lowest reaches of society.

Section 4: The party’s knife handle

Many Uyghurs become suspects after being flagged by the Integrated Joint Operations Platform (IJOP), which is a ‘system of systems’ where officials communicate and millions of investigations are assigned for local follow-up.

ASPI can reveal that the IJOP11 is managed by Xinjiang’s Political and Legal Affairs Commission (PLAC) through a powerful new organ called the Counterterrorism and Stability Maintenance Command,12 which is a product of the Re-education Campaign. One source states that a local branch of the command monitors the re-education camps remotely.

The PLAC is a party organ that oversees China’s law-and-order system, which is responsible for Xinjiang’s mass detention system. The PLAC’s influence tends to grow during times of mass campaigns, and the budget and responsibilities of the Xinjiang PLAC have expanded significantly in recent years— despite efforts by Xi Jinping to abate its status nationally. Two other factors may have contributed to the PLAC’s predominance in Xinjiang: its control over powerful surveillance technologies employed during the two campaigns, and a 2010 governance model in Ürümqi called ‘the big PLAC’, which was masterminded by Zhu Hailun, who is considered by some to be the architect of the re-education camp system.

Section 5: Weaponising the law

Law enforcement in Xinjiang is hasty, harsh and frequently arbitrary. Senior officials have promulgated new laws and regulations that contradict existing ones in order to accomplish the goals and targets of the campaigns; on the ground, local officers openly boast about acting outside normal legal processes, and their voices are sometimes amplified by state media. ASPI has found evidence that some neighbourhood officials in Ürümqi threatened to detain whole families in an attempt to forcefully evict them from the area.

Many Uyghurs have been detained for cultural or religious expressions, but police records reveal that low-level officials have also interned Xinjiang residents for appearing to be ‘dissatisfied with society’ or lacking a fixed address or stable income. In one case, Uyghur man Ekrem Imin was detained because his ‘neighbourhood police officer was trying to fill quotas’. As reported by Ürümqi police, he then contracted hepatitis B (which went untreated) as well as syphilis inside Xinjiang’s, and China’s biggest detention facility.13 This raises further questions about the conditions inside Xinjiang’s re-education facilities.

Efforts to weaponise the law in Xinjiang mirror wider legal reforms under Xi Jinping, where previous ideals about procedural accountability and judicial independence have been cast aside and the law is now openly used to tighten the party’s grip over society and eliminate social opposition.

Section 6: The frontline commanders

County party secretaries are the most senior officials at the local level in China, and their role is crucial to the regime’s survival, according to Xi Jinping. In Xinjiang, they oversee the day-to-day operations of the two campaigns. Researchers at ASPI have compiled a dataset of Xinjiang’s county party secretaries over the past seven years and found that the vast majority of these ‘frontline commanders’ are Han.

At the time of writing (September 2021), not a single county party secretary in Xinjiang is Uyghur, which speaks to the erasure of once-promised ethnic self-rule, and to deeply entrenched racism at the heart of the Han-dominated party-state system.

This section profiles three of the most celebrated county party secretaries in Xinjiang. Yao Ning, a darling of the Chinese media for his elite academic background at Tsinghua and Harvard universities.

Claiming absolute loyalty to the party-state from a young age, Yao now sits at the top of a chain of command over nine newly built or expanded detention facilities in Maralbeshi County.14 He has struggled with mounting pressure and the death of a close colleague due to exhaustion, but finds solace in quotes by both Mao and Xi.

Yang Fasen, who pioneered new governance tools during the campaigns, was recently promoted to vice governor of Xinjiang. His innovative propaganda templates—that the authorities dubbed the ‘Bay County Experience’—were copied by other counties in Xinjiang during the Counterterrorism Campaign. During a 2015 speech in front of Xi Jinping in Beijing, Yang claimed that subjecting undereducated Uyghur youth to labour reform (a practice that became commonplace later in the Re-education Campaign) can improve social stability.

Both Yao Ning and Yang Fasen are from the majority ethnic group in China, the Han. The third profile is of Obulqasim Mettursun, a Uyghur official, who like most Uyghurs serve in a deputy position under a Han overseer. He went viral after penning an open letter pleading with fellow Uyghurs to ‘wake up’ and actively participate in the party-state’s stability maintenance efforts. He represents an ideologically captured and dependent class of Uyghur officials committed to serving the party in largely ceremonial roles.

Section 7: ‘There is no department that doesn’t have something to do with stability’

During Xinjiang’s two campaigns, few offices or officials can escape the political responsibility of ‘stability maintenance’ work. At times, repressive policies have been carried out by the most innocent-sounding, obscure government agencies, such as the Forestry Bureau, which looked after Kashgar City’s re-education camp accounts for a year.

The final section highlights the astounding number of offices involved in key aspects of the Chinese party-state’s crackdown in Xinjiang: propaganda, re-education, at-home surveillance and indoctrination, forced labour and population control. Extra emphasis has been placed on propaganda as it has been the least reported aspect of the two campaigns, albeit highly important.

In Xinjiang, re-education work not only occurs in so-called ‘vocational education and training centres’, but is also front and centre in everyday life, as the party-state seeks to alter how people act and speak. Through more than seven years of intense propaganda work, Uyghurs and other indigenous groups now find themselves being assigned fictional Han relatives, and being taught how to dress and maintain their homes;15 their courtyards are ‘modernised’ and ‘beautified’16 while their ancient tombs and mosques are destroyed.17

Section 8: Conclusion

Xinjiang’s bureaucratic inner workings reflect a wider pattern of authoritarian rule in China. In fact, some governance techniques used in Xinjiang during the two campaigns were conceived elsewhere, and Xinjiang’s ‘stability maintenance’ tools are increasingly replicated by other Chinese provinces and regions including Hong Kong. Further research should be conducted on campaign-style governance in China in general, and its policy implications. Further studies on the cycle of collective trauma through China’s recurring campaigns may also be timely, taking into consideration that many senior Chinese officials, including Xi Jinping and Zhu Hailun, claimed that their personal experiences of being ‘re-educated’ through hard labour have been transformative.

Appendixes

ASPI researchers have curated three appendixes of key Xinjiang officials who have served in party, government, military, or paramilitary roles at the regional, prefecture and county levels from 2014 to 2021. In the sixth section of this report, the frontline commanders, the authors used the third appendix — the names and basic information about Xinjiang’s more than 440 county party secretaries over the last seven years — to generate data for analysis and visualisation. The appendixes have not been published but we will consider requests to access this research.

Download the full report

Readers are encouraged to download the full report.


Acknowledgements

The authors would like to thank researchers Emile Dirks, Aston Kwok, Kate Wong, Nyrola Elima, Nathan Ruser and Kelsey Munro for their invaluable contributions to this project, and Fergus Hanson and Danielle Cave for their guidance and support.

Thank you to peer reviewers who provided excellent feedback, including Darren Byler, Timothy Grose, Sam Tynen, Samantha Hoffman, Peter Mattis, Michael Shoebridge and Edward Schwarck. Thank you also to Yael Grauer, who shared access to the Ürümqi Police Records. The opinions and analysis presented in this report are those of the authors alone, who are also responsible for any errors or omissions. The UK Foreign, Commonwealth & Development Office provided ASPI’s International Cyber Policy Centre (ICPC) with a grant of A$116,770 for this project, of which this report is a key output. Other components of the project can be found at the Xinjiang Data Project website: https://xjdp.aspi.org.au/. Additional research costs were covered from ASPI ICPC’s mixed revenue base—which spans governments, industry and civil society. This project would not have been possible without 2020–21 funding from the US State Department, which supports the Xinjiang Data Project.

What is ASPI?

The Australian Strategic Policy Institute was formed in 2001 as an independent, non‑partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices. ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally. ASPI’s sources of funding are identified in our annual report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements.

ASPI International Cyber Policy Centre

ASPI’s International Cyber Policy Centre (ICPC) is a leading voice in global debates on cyber, emerging and critical technologies, issues related to information and foreign interference and focuses on the impact these issues have on broader strategic policy. The centre has a growing mixture of expertise and skills with teams of researchers who concentrate on policy, technical analysis, information operations and disinformation, critical and emerging technologies, cyber capacity building, satellite analysis, surveillance and China-related issues. The ICPC informs public debate in the Indo-Pacific region and supports public policy development by producing original, empirical, data-driven research. The ICPC enriches regional debates by collaborating with research institutes from around the world and by bringing leading global experts to Australia, including through fellowships. To develop capability in Australia and across the Indo-Pacific region, the ICPC has a capacity building team that conducts workshops, training programs and large-scale exercises for the public and private sectors. We would like to thank all of those who support and contribute to the ICPC with their time, intellect and passion for the topics we work on. If you would like to support the work of the centre please contact: icpc@aspi.org.au

Important disclaimer

This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.

© The Australian Strategic Policy Institute Limited 2021

This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, educational institutions (including schools, independent colleges, universities and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from ASPI and free of charge.

First published October 2021. ISSN 2209-9689 (online). ISSN 2209-9670 (print)

.

Funding Statement: This project was in part funded by the UK Foreign, Commonwealth & Development Office.

  1. The Chinese party-state officially recognises 56 minzu (民族) groups in China: a single Han majority and 55 numerically much smaller groups that currently make up nearly 9% of China’s population. The term minzu is deeply polysemic and notoriously difficult to translate. Depending on the context of its use, the term can connote concepts similar to ‘nation’, ‘race’, ‘people’ and ‘ethnicity’ in English. Party officials initially used the English term ‘nationality’ to render the term into English. Following the collapse of the Soviet Union in 1991, the party gradually pivoted away from nationality, preferring the term ‘ethnic minorities’ for the non-Han groups and reserving the term ‘nation’ for the collective identity and name of the ‘Chinese nation-race’ (中华民族). See James Leibold, ‘The minzu net: China’s fragmented national form,’ Nations and Nationalism, 2016, 22(3):425–428. While party officials reject any assertion of indigeneity in China, Harvard historian Mark Elliott argues that China’s non-Han peoples are better thought of as indigenous communities rather than as ‘ethnic minorities’, which is a term widely used to refer to migrant populations in places such Canada or Australia, as these groups ‘continue to live on lands to which they have reasonably strong ancestral claims; in their encounter with the majority Other, all of them assume the status of “natives” vis-a-vis the representatives of a central (often formerly colonial or quasi-colonial) government from the outside; and all of them find themselves in positions of relative weakness as a result of an asymmetrical power structure, often the consequence of technological inferiority.’ Mark Elliott, ‘The case of the missing indigene: debate over a “second- generation” ethnic policy’, The China Journal, 2015, 73:207, online. Throughout this report and our website, we’ve used the terms ‘indigenous’, ‘ethnic minority’ and ‘nationality’ interchangeably to gloss the term minzu, depending on the context. When we refer to the Uyghurs generically, we’re also referring to other Turkic communities in Xinjiang: the Kazakhs, Tajiks, Kyrgyzs and Uzbeks who have also been targeted in China’s crackdown in Xinjiang. ↩︎
  2. For two online repositories of this now vast literature see The Xinjiang Data Project, ASPI, Canberra, online, and The Xinjiang Documentation Project, University of British Columbia, online. ↩︎
  3. ‘China: Crimes against humanity in Xinjiang: Mass detention, torture, cultural persecution of Uyghurs, other Turkic Muslims’, Human Rights Watch, 19 April 2021, online; Sheena Chestnut Greitens, Myunghee Lee, Emir Yazici, ‘Counterterrorism and preventive repression: China’s changing strategy in Xinjiang’, International Security, Winter 2019–20, 44(3), online. ↩︎
  4. ‘“Eradicating ideological viruses”—China’s campaign of repression against Xinjiang’s Muslims’, Human Rights Watch, 9 September 2018, online; Chun Hang Wong, ‘China’s hard edge: the leader of Beijing’s Muslim crackdown gains influence’, The Wall Street Journal, 7 April 2019, online; Adrian Zenz, James Leibold, ‘Chen Quanguo: The strongman behind Beijing’s securitization strategy in Tibet and Xinjiang’, China Brief, 21 September 2017, 17(12), online. ↩︎
  5. James Leibold, ‘The spectre of insecurity: the CCP’s mass internment strategy in Xinjiang’, China Leadership Monitor, 1 March 2019, online; Austin Ramzy, Chris Buckley, ‘“Absolutely no mercy”: Leaked files expose how China organised mass detentions of Muslims’, The New York Times, 16 November 2019, online; Adrian Zenz, ‘Evidence of the Chinese central government’s knowledge of and involvement in Xinjiang’s re-education internment campaign’, China Brief, 14 September 2021, online. ↩︎
  6. Martin S Flaherty, ‘Repression by any other name: Xinjiang and the genocide debate’, The Diplomat, 3 August 2021, online; James Leibold, ‘Beyond Xinjiang: Xi Jinping’s ethnic crackdown’, The Diplomat, 1 May 2021, online; Joanne Smith Finley, ‘Why scholars and activists increasingly fear a Uyghur genocide in Xinjiang’, Journal of Genocide Research, 2021, 23(3):348–370. ↩︎
  7. Lily Kuo, Gerry Shih, ‘China researchers face abuse, sanctions as Beijing looks to silence critics’, Washington Post, 7 April 2021, online; ‘China scrubs evidence of Xinjiang clampdown amid “genocide” debate’, The Washington Post, 17 March 2021, online; Rebecca Wright, Ivan Watson, ‘She tweeted from Sweden about the plight of her Uyghur cousin. In Xinjiang, the authorities were watching’, CNN, 17 December 2020, online. ↩︎
  8. These sources include English and Chinese-language academic papers, local media reports and official party and state documents. ↩︎
  9. The Ürümqi Police Records were provided to ASPI by journalist Yael Grauer, who wrote for The Intercept about the database, and has since left the outlet. See Yael Grauer, ‘Revealed: Massive Chinese police database’, The Intercept, 29 January 2021, online. ↩︎
  10. It also walks the viewer through the offices involved in several key aspects of the crackdown against Uyghurs: propaganda, re-education, Fanghuiju, forced labour and population control. The chart isn’t meant to be a comprehensive picture of the vast Chinese bureaucracy but rather an illustrative snapshot of the different levels of the Chinese bureaucracy that played an active role in designing, coordinating or implementing the party’s policies in Xinjiang, from the central level in Beijing to the villages and neighbourhoods in Xinjiang. ↩︎
  11. Integrated Joint Operations Platform [一体化联合作战平台]. ↩︎
  12. Counterterrorism and Stability Maintenance Command [反恐维稳指挥部]. ↩︎
  13. This case was first publicised by the Xinjiang Victims Database (@shaitbiz), ‘Some months ago, XJ officials told visiting journalists that the Dabancheng facility in Ürümqi was never a camp [Tweet]’, Twitter, 27 August 2019, online. The Associated Press reported that the detention centre was the largest in the world. See Dake Kang, ‘Room for 10,000:
    Inside China’s largest detention center’, The Associated Press, 1 December 2018, online. ↩︎
  14. See the map and dataset at The Xinjiang Data Project, ASPI, Canberra, online. ↩︎
  15. ‘“Home School” Initiative enters village households, “beautifying” the lives of villagers’ [“家庭学校”进农户活动让村民生活“靓”起来], Qingfeng Net [清风网], 20 November 2019, online. ↩︎
  16. Timothy A. Grose, ‘If you don’t know how, just learn’, Ethnic and Racial Studies, 06 July 2020, online. ↩︎
  17. Nathan Ruser, ‘Cultural erasure: Tracing the destruction of Uyghur and Islamic spaces in Xinjiang’, ASPI, Canberra, 24 September 2020, online. ↩︎

Economic coercion in Indo-Pacific island states: Building resilience

Indo-Pacific island states face diverse challenges as they grapple with their own unique vulnerabilities to the geopolitical consequences of growing strategic competition in the region. This report explores the vulnerability of island states to economic coercion and the risks they face in navigating the growing economic power of the People’s Republic of China (PRC).

In this report, the authors examine four perceived examples of economic coercion within the region that challenge the Quad’s vision of a free and open Indo-Pacific. China’s increasing interest in the island states of the Indo-Pacific has led to concern that the imbalance in those relationships is so large that both domestic and broader regional stability are at risk.

This report offers a number of policy recommendations to protect Indo-Pacific island states from economic coercion, including:

  • Island states must be better invested in the rules-based international economic order;
  • Establishing codes of conduct to limit economic duress, limit undue economic influence and strengthen the rules-based international system;
  • Strengthening government institutions so they can resist economic coercion;
  • International partners should work with Indo-Pacific island states to help strengthen the ability of local businesses to take collective action against economic coercion.

Iron ore futures: possible paths for Australia’s biggest trade with China

The iron ore market is wrong-footing forecasters again, as it has throughout the last 20 years. Nobody expected the iron ore price to surpass US$200 a tonne as it did in May and no one predicted it would then plunge to less than US$100 as it has this week.

This report argues that Australia’s troubled relationship with China will be influenced by which path the iron ore market takes over the medium term.

China’s authorities are determined to reduce their dependence on Australian iron ore, both by seeking alternative supplies and by capping their steel production.

However, China has been trying and failing to curb its steel production for the past five years, with many local governments ignoring central orders. In just the first six months of this year, 18 new blast furnaces capable of producing as much steel as Germany’s entire output were approved.

Although China will never be able to rid itself entirely of the need for Australian supplies, this report warns that if an iron ore glut emerges, whether by Chinese government design or because of an economic downturn, the commodity may join the list of other Australian exports subject to Chinese coercion.

The report also highlights that the effort to reduce its dependence on Australia will come at considerable cost to China. Australia is by far the cheapest and closest source of high-quality iron ore for China’s mills.

The Pacific Fusion Centre: the challenge of sharing information and intelligence in the Pacific

The Pacific Fusion Centre: the challenge of sharing information and intelligence in the Pacific examines the Australian-sponsored Pacific Fusion Centre (PFC) which is due to open permanent offices in Vanuatu later this year.

The PFC was set up in 2019 as an outcome of the 2018 Boe Declaration with the mandate of providing strategic intelligence to Pacific Island states to assist in high-level policy formulation on human security, environmental security, transnational crime and cybersecurity. The report argues that the impact of these assessments may be limited, including due to the open-source nature of the information.

There are also widespread misperceptions about the PFC’s role. Unlike regional information fusion centres elsewhere in the region, the PFC will not produce actionable intelligence on specific security threats. For example, identifying vessels that are engaged in illegal fishing or smuggling people, arms or drugs.

The Pacific still sorely needs a regional centre to fuse and share actionable intelligence in the maritime domain. Australia needs to consider how it can best move to fill this important intelligence gap.

The Report concludes that the PFC may be a useful soft-power initiative, but the Pacific still sorely needs a regional information fusion centre to produce and share actionable intelligence in the maritime domain.

New beginnings: Rethinking business and trade in an era of strategic clarity and rolling disruption

This special report considers the relationship between our business and trade positioning in the context of the impacts of Covid, natural disasters and the actions of coercive trading partners.

Global economic integration has enabled the spread of ideas, products, people and investment at never before seen speed. International free trade has been a goal of policy-makers and academics for generations, allowing and fostering innovation and growth. We saw the mechanism shudder in 2008 when the movement of money faltered; the disruption brought about by COVID-19 has seen a much more multi-dimensional failure of the systems by which we share and move. The unstoppable conveyor belt of our global supply chain has ground to a halt. This time, what will we learn?

ASPI’s latest research identifies factors that have led to the erosion of Australia’s policy and planning capacity, while detailing the strengths of our national responses to recent crises. The authors recommend an overhaul of our current business and trade policy settings, with a view to building an ‘agenda that invests in what we’re good at and what we need, values what we have and builds the future we want.’

The authors examine the vulnerabilities in Australia’s national security, resilience and sovereignty in relation to supply chains and the intersection of the corporate sector and government. To protect Australia’s business interests and national sovereignty, the report highlights recent paradigm shifts in geopolitics, whereby economic and trade priorities are increasingly relevant to the national security discussion.

An informed and independent voice: ASPI, 2001-2021

To mark its establishment in August 2001, the Australian Strategic Policy Institute has published an intellectual history of its work over two decades: An informed and independent voice: ASPI, 2001–2021.

ASPI’s mission is to ‘contribute an informed and independent voice to public discussion’. That was the vision embraced by the Australian Government in creating ‘an independent institute to study strategic policy’, designed to bring ‘contestability’ and ‘alternative sources of advice’ to ‘key strategic and defence policy issues’.

The story of how the institute did that job is told by ASPI’s journalist fellow, Graeme Dobell. He writes that ASPI has lived out what its name demands, to help deliver what Australia needs in imagining ends, shaping ways and selecting means.

An informed and independent voice covers the terrorism era and national security; the work of the Defence Department; Australia’s wars in Iraq and Afghanistan; the evolution of Australia’s strategy in the Indo-Pacific; relations with China and the US; cyber and tech; Japan, India and the Quad; Indonesia and Southeast Asia; Australia’s island arc—the the South Pacific and Timor-Leste; Northern Australia; Women, peace and security; Climate change; Antarctica; 1.5 track dialogues; the work of the digital magazine The Strategist; and ‘thinking the ASPI way’.

The submission to cabinet on ASPI’s founding said that the principles of contestability had ‘not yet been effectively implemented in relation to defence and strategic policy, despite the vital national interests and significant sums of money that are at stake’. That demand, at the heart of the institute’s creation, has been met and still drives its work.

Introduction: sometimes we will annoy you

A senior diplomat from one of Australia’s close ‘Old Commonwealth’ partners tells a story about hosting an Australian visit from his country’s defence minister, an aspiring political operator. The minister came to ASPI for a 90-minute roundtable with senior staff. Mark Thomson briefed on Defence’s budget woes—this was one of those years when financial squeezing was the order of the day, and a gap was quietly appearing between policy promises and funding reality.

Andrew Davies reported on the challenges of delivering the Joint Strike Fighter, the contentious arrival of the ‘stop-gap’ Super Hornet and the awkward non-arrival of the future submarine. Rod Lyon spoke about the insurmountable problems of Iraq and Afghanistan, the rise of the People’s Republic of China (PRC) and our own government’s foreign policy foibles. It was, like many ASPI meetings, a lively and sustained critique of policy settings. Driving back to the High Commission, a somewhat startled minister muttered to his diplomatic escort: ‘Thank God we don’t have a think tank like that back home!’

The genius of ASPI is that it’s designed to be a charming disrupter. Sufficiently inside the policy tent to understand the gritty guts of policy problems, but with a remit to be the challenger of orthodoxies, the provider of different policy dreams (as long as they’re costed and deliverable), the plain-speaking explainer of complexity, and a teller of truth to power. Well, that’s perhaps a little too grand. ASPI aims to be a helpful partner to the national security community, not a hectoring lecturer. But the institute ceases to have any value if it just endorses current policy settings: the aim is to provide ‘contestability of policy advice’. Not always easy in a town where climbing the policy ladder is the only game.

The story of ASPI’s creation has been told by several present at the creation1 and, very enjoyably, by Graeme Dobell in the second chapter in this volume. With the release of the Howard government cabinet records for the year 2000, we now get to see that the National Security Committee of cabinet deliberated carefully over ASPI’s composition, charter, organisational location, geographical location and underlying purpose. The annual expenditure proposed ($2.1 million) was, by Defence’s standards, trivial even in 2000. What the government was chewing over was the sense or otherwise of injecting a new institution into the Canberra policymaking environment.

The case for a strategic policy institute was set out in a cabinet submission considered on 18 April 2000:

There are two key reasons to establish an independent institute to study strategic policy.

The first is to encourage development of alternative sources of advice to Government on key strategic and defence policy issues. The principles of contestability have been central to our Government’s philosophy and practice of public administration, but 2 An informed and independent voice: ASPI, 2001–2021 these principles have not been effectively implemented in relation to defence and strategic policy, despite the vital national interests and significant sums of money that are at stake. The Government has found in relation to the COLLINS Class Submarines project for instance, and more recently in relation to White Paper process, that there are almost no sources of alternative information or analysis on key issues in defence policy, including the critical questions of our capability needs and how they can best be satisfied. The ASPI will be charged with providing an alternative source of expertise on such issues.

Second, public debate of defence policy is inhibited by a poor understanding of the choices and issues involved. The ASPI will be tasked to contribute an informed and independent voice to public discussion on these issues.2

‘An informed and independent voice’. There couldn’t be a better description of what the institute has sought to bring to the public debate; nor could there be a more fitting title for this study of ASPI’s first 20 years by Graeme Dobell, ably assisted by the voices and insights of many ASPI colleagues.

The April cabinet meeting agreed that ASPI should be established, but the government went back to Defence a second time to test thinking about the institute’s organisational structure.

In July, the department proposed several options, including that ASPI could be added as an ‘internal Defence Strategic Policy Cell’, or operate as an independent advisory board to the Minister for Defence, or be based at a university, or be a statutory authority, executive agency or incorporated company. Having considered other possibilities, the government accepted Defence’s recommendation (endorsed by other departments) that ASPI be established as a government-owned incorporated company managed by a board ‘to enhance the institute’s independence within a robust and easy to administer corporate structure’.3

The most striking aspect of this decision is that the government opted for the model that gave ASPI the greatest level of independence. There were options that would have limited the proposed new entity, for example, by making it internal to Defence or adding more complex governance mechanisms that might have threatened the perception of independence. Those options were rejected. A decision to invite a potential critic to the table is the decision of a mature and confident government. It’s perhaps not surprising that there aren’t many ASPI-like entities. Prime Minister Howard was also keen to see that the institute would last beyond a change of government. ASPI was directed to be ‘non-partisan’, above daily politics. The leader of the opposition would be able to nominate a representative to the ASPI Council. ASPI would also be given a remit to ‘pursue alternate sources of funding and growth’, giving the institute the chance to outgrow its Defence crib.

Interestingly, the August 2000 cabinet decision to establish ASPI as a stand-alone centre structured as an incorporated company and managed by a board of directors also stated that: ‘The Cabinet expressed a disposition to establish the centre outside of the Australian Capital Territory.’4 By the time ASPI was registered in August 2001 as an Australian public company limited by guarantee, the institute’s offices were located in Barton in the ACT, where they remain to this day.

The government appointed Robert O’Neill AO as the chair of the ASPI Council, and the inaugural membership of the council was appointed in July 2001, meeting for the first time on 29 August 2001. That month, the council appointed Hugh White AO as the institute’s executive director and Hugh set about building the initial ASPI team. A fortnight later, the world fundamentally changed. Terrorist attacks on New York’s World Trade Center and the Pentagon and one unsuccessfully aimed at the White House jolted the strategic fabric of the Middle East and the world’s democracies. ASPI couldn’t have started at a more challenging time for strategic analysis.

Writing in ASPI’s first annual report, Hugh White reported that the institute in 2001–02 ‘did a small amount of work directly for government, including a substantial assessment for the Minister for Defence, Senator Hill, of the implications of September 11 for Australia’s defence’.5

ASPI’s first public report was a study by Elsina Wainwright, New neighbour, new challenge: Australia and the security of East Timor. This was followed by the first of Mark Thomson’s 16 editions of The cost of Defence: the ASPI defence budget brief 2002–03. This included a rundown of the top 20 defence capability acquisition projects. The slightly cheeky cartoon covers—state and territory seagulls pinching Defence spending chips is my favourite—didn’t start until 2003–04, but the first Cost of Defence began the trend to report Defence’s daily budget spend: $39,991,898.63. (The 2021–22 Cost of Defence records the daily spend at $122,242,739.73.)

Hugh White closed off his 2001–02 Director’s report with ‘Clearly the task of defining our role in the policy debate will take some time to complete, but we believe we have made a good start.’ It was quite a foundation year: tectonic global security shifts, challenging regional deployments, defence budget and capability analysis. ASPI’s course was set, and the rest, as they say, makes up the history that Graeme Dobell and ASPI colleagues cover in this book. Graeme’s analysis makes sense of what, to the participants, might have felt from time to time like one damned thing after another. But patterns do emerge, and they coalesce into the realisation that ASPI’s first 20 years have marked some of the most turbulent shifts in Australia’s security outlook. All of which puts, or should put, a tremendous premium on the value of strategic policy, contestable policy advice, an informed and engaged audience and a new generation of well-trained policy professionals.

ASPI today is a larger organisation working across a wider area of strategy and policy issues.

The annual report for 2019–20 lists 64 non-ongoing (that is, contracted) staff, of whom 45 were full time (22 female and 23 male) and 15 were part time (11 female and four male). The overall ASPI budget was $11,412,096.71, of which $4 million (35%) was from Defence, managed by a long-term funding agreement. A further $3.6 million (32%) came from federal government agencies; $0.122 million (1%) from state and territory government agencies; $1.89 million (17%) from overseas government agencies, most prominently from the US State Department and Pentagon and the UK Foreign and Commonwealth Office. Defence industry provided $0.370 million (3%); private-sector sponsorship was $1.241 million (11%) and finally, funding from civil society and universities was $0.151 million (1%).6

Behind those numbers is a mountain of effort to grow the institute and sustain it financially.

Think tanks need high-performing staff, and high-performing staff need salaries that will keep them at the think tank. The nexus between money and viability is absolute. Around the world, there are many think tanks that don’t amount to much more than a letterhead and an individual’s dedicated effort in a spare room at home. The reality is that building scale, research depth, a culture of pushing the policy boundaries and a back-catalogue of high-quality events and publications takes money. In the early stages of ASPI’s life, I recall the view expressed that the institute couldn’t possibly be regarded as independent if the overwhelming balance of its resources came from the Department of Defence. More recently, the charge is that the ‘military industrial complex’ or foreign governments must be the tail that wags the dog. The Canberra embassy of a large and assertive Leninist authoritarian regime can’t conceive that ASPI could possibly be independent in its judgements because, well, no such intellectual independence survives back home. ASPI must therefore be the catspaw of Australian Government policy thinking.

None of those contentions are borne out by looking at the content of ASPI products over the past two decades. There are plenty of examples (from critiques of the Port of Darwin’s lease to a PRC company; analysis of key equipment projects such as submarines and combat aircraft; assessments of the Bush, Obama, Trump and now the Biden presidencies; assessments of the Defence budget; differences on cyber policy) in which the institute’s capacity for feisty contrarianism has been on full display. In my time at ASPI, I haven’t once been asked by a politician, public servant, diplomat or industry representative to bend a judgement to their preferences. It follows that, for good or ill, the judgements made by ASPI staff, and our contributors, are their views, and their views alone. ASPI is independent because it was designed to operate that way. Its output demonstrates that reality every day.

And as you will see in these pages, ASPI has views aplenty. It became clear several years ago that the institute needed to broaden its focus away from defence policy and international security more narrowly conceived to address a wider canvas of security issues. That’s because the wider canvas presents some of the most interesting and challenging dilemmas for Australia’s national security. We sought to bring a new policy focus to cyber issues by creating the ASPI International Cyber Policy Centre. This was followed by streams of work addressing risk and resilience; counterterrorism; policing and international law enforcement; countering disinformation; understanding the behaviour of the PRC in all its dimensions; and, most recently, climate and security.

Does ASPI’s work have real policy effect? One of the curiosities of the Canberra environment is that officials will often go to quite some length to deny that a think tank could possibly shift the policy dial. To do so might be to acknowledge an implicit criticism that a department or agency hasn’t been on its game. Changing policy is often more like a process of erosion than a sudden jolting earthquake. It can take time to mount and sustain a critique about policy settings before the need for change is finally acknowledged. And it has to be said that the standard disposition of Canberra policymakers is to defend current policy settings. That shouldn’t be too surprising: current policy settings in many cases will be the result of government decisions, and, at times, the role of the public service is to raise the drawbridge and defend the battlements. So, it’s often the case that a department’s response to the arrival of an ASPI report isn’t a yelp of joy so much as the cranking up of a talking points brief for the minister that explains why current policy settings are correct, can’t be improved upon and quite likely are the best of all possible worlds.

ASPI’s influence is therefore more indirect than that of the Australian Public Service (APS), but, as Sun Tzu reminds us, ‘indirect methods will be needed in order to secure victory.’7 The institute has some natural strengths in this approach. ASPI has the advantage of being small and flexible; it has a charter to look beyond current policy settings; it can talk to a wide range of people in and out of government to seed ideas; it can engage with the media; it allows expertise to develop because more than a few ASPI staff have stayed in jobs for years and built a depth of knowledge not necessarily found in generalist public servants who frequently change roles.

Taking a longer view, I would suggest that ASPI has indeed managed to influence the shape of policy in a number of areas. The institute has helped to create a more informed base of opinion on key defence budget and capability issues. This has helped to strengthen parliamentary and external scrutiny of the Defence Department and the ADF. ASPI is really the only source providing detailed analysis of defence spending and has helped to lift public understanding about critical military capability issues, such as the future submarine project, the future of the surface fleet, air combat capabilities, the land forces, space, and joint and enabling capabilities.

ASPI has had substantial impact on national thinking about dealing with the PRC, and that has helped at least set the context for government decision-making on issues such as the rollout of the 5G network, countering foreign interference, strengthening security consideration of foreign direct investment and informing national approaches to fuel and supply-chain security.

ASPI has sought to make policy discussions about cyber, critical and emerging technologies more informed and more accessible. The institute has offered many active, informed and engaged voices on critical international issues of importance to Australia, from the Antarctic to the countries and dynamics of the Indo-Pacific, the alliance with the US, the machinery of Defence and national security decision-making, the security of northern Australia and even re-engaging with Europe.

It’s best left to others to judge the success or otherwise of the institute. Both from the approval, and sometimes disapproval, that ASPI garners, we can see that people pay attention to the institute’s work. That’s gratifying and motivates the team to keep doing more. 

Coincidentally to ASPI’s 20th anniversary, the Australian Parliament’s Senate Foreign Affairs, Defence and Trade References Committee has been conducting an inquiry into funding for public research into foreign policy issues. In making a submission to that inquiry, I offered what I hoped was useful advice about the contours of what a notional ‘foreign policy institute’ should look like if the government wanted to promote in the field of foreign policy what ASPI seeks to do for defence and strategic policy. That led me to suggest the following seven approaches, presented here with minor edits:

  1. A foreign policy institute must be genuinely independent, with a charter that makes its core functions clear and a governance framework that supports its independence. If the Department of Foreign Affairs and Trade (DFAT) were to be the prime source of funding, it should be made clear that DFAT should not influence the policy recommendations of the institute’s work. A government-appointed council, including a representative of the leader of the opposition, should provide overall strategic direction for the institute. Any entity that is part of a larger government department will inevitably come to reflect the parent. A clear separation between the parent department and the institute is essential.
     
  2. The institute should not be part of a university, because university priorities would weaken the institute’s capacity to retain a sharp focus on public policy. The committee might like to test this proposition by seeing whether it can identify any contemporary foreign policy research outfit that is part of a university which has substantially shaped Australian foreign policy. My view is that you will search in vain. This is true in the main because universities have priorities other than shaping public policy outcomes. How universities recruit, reward and promote, what they teach and the outcomes they regard as constituting excellence are shaped towards other ends than providing contestable and implementable foreign policy.
     
  3. The institute needs scale to develop excellence. Successful think tanks—such as those at the top end of the University of Pennsylvania’s ‘Go To’ index—attract people interested in policy ideas and with lateral thinking skills and with some entrepreneurial flair. The quality of their thinking is strengthened by being able to test their ideas with colleagues and collaborate on interesting policy work. Some scale is needed to bring a group of people like that together, offering terms and conditions that allow people to develop skills over a few years. This approach stands in contrast to the instinct of some departments to offer one-off, short-term, small funding grants. In my experience, multiple ‘penny-packet’ grants become difficult for departments to administer, produce reports that lack an understanding of how public policy is really done and do not develop skills.
     
  4. The institute will need some time to establish itself. ASPI is 20, and every day is a story of how we manage the tasks of offering policy contestability, engaging with our stakeholders and sustaining ourselves financially. It took probably 15 years for an acceptance to be built in the rather tightknit defence and security community that ASPI was not simply to be tolerated but could add value and even be constructively brought into policy discussions. A foreign policy institute will take a similar amount of time to build an accepted place for itself. Hopefully, an institute would start producing good material on day one, but it will take years for such a group to be seen as a natural (indeed, essential) interlocutor in critical foreign policy discussions.
     
  5. The institute must be non-partisan, reaching out to all parts of parliament. Because foreign policy is a public policy good, it is appropriate and likely that the bulk of funding for a foreign policy institute will come from the public sector. If it is successful, the institute will survive through changes of governments, ministers and senior officials. As such, it can’t afford to be partisan in the way that many private think tanks are. That will still leave scope for engaged debate on policy options, which leads to approach number 6.
     
  6. Accept that the institute will, from time to time, annoy you. This is the price of contestability of policy advice. There is no question that ASPI has annoyed governments, oppositions and officials over the years on all manner of issues, from key bilateral relationships to defence equipment acquisitions, military operations, budgets and the rest. To advance policy thinking, it’s necessary from time to time to question existing policy orthodoxies. The test for the institute’s stakeholders is whether the value of contestable policy advice is worth the occasional annoyance. The test for the foreign policy institute will be whether the issue in question has been appropriately researched and thought through.
     
  7. A professional outfit needs appropriate funding. To succeed, a foreign policy institute needs to be able to attract a mix of staff who can be remunerated in line with their skills. As in all walks of life, one gets what one pays for. Funding of between $2 million and $3 million would set up an institute able to build some critical mass, working out of offices fitted out to an appropriately modest APS standard. The institute should have a remit to grow its funding base through its own efforts. This would be sufficient to enable a promising start to a potentially nationally important organisation.

    ASPI was designed to place the executive director position at (approximately) the level of the APS Senior Executive Service Band 3 (deputy secretary) level. Salary and conditions are determined by the Remuneration Tribunal. The executive director, on direction from the ASPI Council, determines salary levels for ASPI’s staff, who are recruited on contracts. The intent is to recruit people with the mix of policy skills and hands-on public policy experience who can realistically shape policy thinking. Government departments and agencies are, in general, willing to support staff taking positions at ASPI, using options for leave without pay from the APS. For more senior staff, the hope is that some time spent at ASPI will enhance their careers, perhaps enabling them to return to the APS with new skills and capacities. For more junior staff, the aim is to equip them with skills that will make them attractive new hires for departments and agencies.8

Of course, I was doing little more than describing the ASPI business model developed more than 20 years ago and validated through two decades of enthusiastic policy research and advocacy by many dozens of ASPI staff.

Speaking personally, it has been the privilege of my professional life to spend almost a decade as the executive director of the institute since April 2012, and a few more years before that as ASPI’s director of programs between 2003 and 2006. My commitment to the organisation comes about because of the value I believe it adds to Australia’s defence and strategic policy framework. These policy settings matter. They’re the foundation of the security of the country, the security of our people and the very type of country that Australia aspires to be. Australia would be better defended if we had more lively debates about the best ways to promote our strategic interests. ASPI has truly been a national gem in sustaining those debates.

At the core of this book is Graeme Dobell’s sharp take on the intellectual content of hundreds of ASPI research publications, thousands of Strategist posts and many, many conferences, seminars, roundtables and the like. Graeme has done a wonderful job of breathing life into this body of work, reflecting some of the heat and energy that came from ASPI staff and ASPI contributors investing their brain power into Australia’s policy interests. In these pages, you read the story of Australia’s own difficult navigation through the choppy strategic seas of the past 20 years. It’s a thrilling ride and a testament to the many wonderful people who have worked at or supported the institute.

We should all hope that ASPI reaches its 40-year and even 50-year anniversaries, because there’s no doubt in my mind that Australia will continue to need access to contestable policy advice in defence and strategic policy. The coming years will be no less difficult and demanding than the years recounted here. In fact, Australia’s future is likely to face even greater challenges. 

Never forget that strategy and policy matter. Profoundly so. That’s why ASPI matters.

Peter Jennings

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About ASPI

The Australian Strategic Policy Institute was formed in 2001 as an independent, non‑partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices.

ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally. ASPI’s sources of funding are identified in our annual report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements. It is incorporated as a company, and is governed by a Council with broad membership. ASPI’s core values are collegiality, originality & innovation, quality & excellence and independence.

ASPI’s publications—including this report—are not intended in any way to express or reflect the views of the Australian Government. The opinions and recommendations in this report are published by ASPI to promote public debate and understanding of strategic and defence issues. They reflect the personal views of the author(s) and should not be seen as representing the formal position of ASPI on any particular issue.

Important disclaimer

This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.

© The Australian Strategic Policy Institute Limited 2021

This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Notwithstanding the above, educational institutions (including schools, independent colleges, universities and TAFEs) are granted permission to make copies of copyrighted works strictly for educational purposes without explicit permission from ASPI and free of charge.

ISBN 978-1-925229-67-7 (print)
ISBN 978-1-925229-68-4 (online pdf)

Funding statement: No specific sponsorship was received to fund production of this report

  1. See, for example, Kim Beazley, John Howard et al., ASPI at 15, ASPI, Canberra, October 2016, online. ↩︎
  2. Cabinet memorandum JH00/0131—Establishment of the Australian Strategic Policy Institute—Decision, 18 April 2000, online. ↩︎
  3. Cabinet decision JH00/0216/CAB—Australian Strategic Policy Institute—alternate models to establish a strategic policy research centre—Decision, online. ↩︎
  4. Cabinet decision JH00/0216/CAB. ↩︎
  5. Australian Strategic Policy Institute, Annual report 2001–2002, ASPI, Canberra, October 2002, 10, online. ↩︎
  6. Australian Strategic Policy Institute, Annual report 2019–2020, ASPI, Canberra, October 2020, online; staff numbers are on page 10; funding data is on page 154. ↩︎
  7. Sun Tzu, The art of war, translated by Lionel Giles, Chapter V, 5, online. ↩︎
  8. My submission to the inquiry is available via the internet home page of the Senate Foreign Affairs, Defence and Trade References Committee, Inquiry into funding for public research into foreign policy issues, online. ↩︎

Buying and selling extremism

New funding opportunities in the right-wing extremist online ecosystem

What’s the problem?

As mainstream social media companies have increased their scrutiny and moderation of right-wing extremist (RWE) content and groups,1 there’s been a move to alternative online content platforms.2

There’s also growing concern about right-wing extremism in Australia,3 and about how this shift has diversified the mechanisms used to fundraise by RWE entities.4 This phenomenon isn’t well understood in Australia, despite the Australian Security Intelligence Organisation (ASIO) advising in March 2021 that ‘ideological extremism’5 now makes up around 40% of its priority counterterrorism caseload.6

Research by ASPI’s International Cyber Policy Centre (ICPC) has found that nine Australian Telegram channels7 that share RWE content used at least 22 different funding platforms, including online monetisation tools and cryptocurrencies, to solicit, process and earn funds between 1 January 2021 and 15 July 2021. Due to the opaque nature of many online financial platforms, it’s difficult to obtain a complete picture of online fundraising, so this sample is necessarily limited. However, in this report we aim to provide a preliminary map of the online financial platforms and services that may both support and incentivise an RWE content ecosystem in Australia.

Most funding platforms found in our sample have policies that explicitly prohibit the use of their services for hate speech, but we found that those policies were often unclear and not uniformly enforced. Of course, there’s debate about how to balance civil liberties with the risks posed by online communities that promote RWE ideology (and much of that activity isn’t illegal), but a better understanding of online funding mechanisms is necessary, given the growing concern about the role online propaganda may play in inspiring acts of violence8 as well as the risk that, like other social divisions, such channels and movements could be exploited by adversaries.9

The fundraising facilitated by these platforms not only has the potential to grow the resources of groups and individuals linked to right-wing extremism, but it’s also likely to be a means of building the RWE community both within Australia and with overseas groups and a vector for spreading RWE propaganda through the engagement inherent in fundraising efforts. The funding platforms mirror those used by RWE figures overseas, and funding requests were boosted by foreign actors, continuing Australian RWEs’ history of ‘meaningful international exchange’ with overseas counterparts.10

What’s the solution?

The ways online funding mechanisms can be exploited by individuals and groups promoting RWE ideology in Australia are an emerging problem. Any response must include strong policies and programs to address the drivers of right-wing extremism. However, another strategy that Australian law enforcement, intelligence agencies, policymakers and civil society should explore involves undermining the financial incentives that can help sustain and grow RWE movements.

This response should include examining whether emerging online funding platforms have obligations under Australian laws aimed at countering terrorism financing, as well as enhancing the transparency of platform policies and enforcement actions related to fundraising activity by individuals and groups promoting RWE and other extremist content. The authorities could also explore whether the financial activities of RWE individuals in Australia may in some cases fall under legal prohibitions against the commercial exploitation of a person’s notoriety from criminal offending.

In addition, the Australian Government should create systems to better monitor hate crimes and incidents that can be used to assess linkages of crimes to extremist ideologies and groups, and to track trends to inform the formulation of policy responses related to RWE fundraising. Likewise, more research should be supported to examine the relationships between online content creation and fundraising by RWE influencers, radicalisation, mobilisation to violence, and the potential financial and social influence appeal of online funding and content-production mechanisms when disengaging people from RWE groups and movements.

Defining right-wing extremism

ASIO has said that ‘right-wing extremism is the support for violence to achieve political outcomes relating to ideologies, including but not limited to, white supremacism and Neo-Nazism’.11 That definition points to the central role of violence in defining RWE for law enforcement, but also highlights the role of supporting rather than perpetrating violence. For ASIO, it’s ‘an individual or group’s support for violence’ that triggers the agency’s interest.12

However, international attention is being paid to RWE content and activities that might not fit neatly within existing counterterrorism or violent extremism13 frameworks.14 That work also recognises a ‘post-organisational’ understanding15 of RWE that isn’t limited to membership of defined or static groups.16 This has brought a focus on how threats such as ‘lone wolf’ attacks can emerge from the broad environment of right-wing or other extremism, especially via online ecosystems that can operate as a culture of inspiration for violence.

In this report, we use the term ‘right-wing extremism’ in the following way, as described by Macquarie University’s Department of Security Studies and Criminology in its report on online right-wing extremism in NSW, to denote:

communities and individuals committed to an extreme social, political, or ideological position that is pro-white identity (the ‘in-group’), and actively suspicious of non-white others (the ‘out-group’).

It is characterised by individuals, groups, and ideologies that reject the principles of democracy for all and demand a commitment to dehumanising and/or hostile actions against out-groups.

RWE can be used as an umbrella phrase which incorporates a collection of terms that have been adopted internationally to describe this diverse social movement, including the ‘far-right’, ‘alt-right’, ‘extreme-right’ etc. RWE communities actively misappropriate the language of conservative, right wing political philosophy to reject democratic norms and values.17

This working definition is useful because of the difficulty in scrutinising right-wing extremism in Australia.18 Hate crime is rarely prosecuted here, and individuals who have committed crimes motivated by right-wing extremism may have been charged with other offences.19 Nor do we have any central open registry of ‘crimes motivated by offenders’ bias against race, gender, gender identity, religion, disability, sexual orientation, and ethnicity’ similar to the US Federal Bureau of Investigation’s Uniform Crime Reporting (UCR) Program that would allow us to better understand the issue and identify potential risks and escalations.20 So far, only one RWE group, the Sonnenkrieg Division, has been designated as a terrorist organisation by the Australian Government.21 And Australia lacks research entities that make hate group designations, such as the Southern Poverty Law Center (SPLC) in the US. Our understanding is also complicated by volatile allegiances among people who hold and act on such beliefs and by their geographical dispersal.22

This vacuum in Australia could make right-wing extremism an attractive avenue for foreign adversaries seeking to exploit and exacerbate existing social cleavages, because any governmental response will be sluggish and probably politically fraught, further exacerbating the problem.23 Clearly, there’s also an important debate about how to approach these issues while ensuring that the expression of diverse beliefs and views, including views that other members of Australian society may find distasteful, remains possible.

Given these challenges, we also note other work tracking US RWE fundraising that has relied in part on the SPLC’s hate group designations and draw on those designations in our sample where they occur recognising that they may be imperfect when removed from the US context.24 However, content from US hate groups was shared among the report’s sample, and some channels declared direct affiliations.

The SPLC defines a hate group as:

an organization or collection of individuals that—based on its official statements or principles, the statements of its leaders, or its activities—has beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics.25

Those characteristics include race, religion, ethnicity, sexual orientation or gender identity. However, the SPLC doesn’t consider the committing of violence to be a prerequisite for being listed as a hate group ‘because a group’s ideology can inspire hate violence even when the group itself does not engage in violent activity’.26 Of course, the SPLC is a private organisation, so its designation of hate groups carries no legal consequence (i.e. prosecution).

There’s evidence that some RWE figures and groups have intentionally toned down their more extreme rhetoric in order to reach a broader audience while avoiding the scrutiny of law enforcement.27 As the Macquarie University’s Department of Security Studies Studies and Criminology report found:

few, if any, groups explicitly and publicly advocate the use of violence against those considered part of the out-group such as Muslims, Jews or immigrants, but rather adopt a longer term opportunistic strategy.28

Likewise, the report of the New Zealand royal commission into the 2019 Christchurch terrorist attack discussed how many individuals and groups that use ‘dehumanising and divisive rhetoric’ against others ‘are careful to avoid direct engagement with, or endorsement of, violence’.29 Nevertheless, it suggested that such rhetoric can serve to normalise Islamophobia or anti-immigrant sentiment in a way that may encourage or legitimise the use of violence.30 ASIO Director-General Mike Burgess has also voiced concern about the internet’s role in this milieu, stating that ‘extremists are security conscious and adapt their security posture to avoid attention. In their online forums and chat rooms, they show that they’re savvy when it comes to operating at the limits of what is legal… The online environment is a force multiplier for extremism; fertile ground for sharing ideology and spreading propaganda’.31

Research methodology

For this analysis, we drew on a dataset of nine Australian Telegram channels that shared RWE content between 1 January 2021 and 15 July 2021. Due to the rapid evolution of online ecosystems, the use of encrypted platforms and the difficulties of tracking financial transactions, especially in cryptocurrencies, this snapshot is necessarily limited. The sample size is small; however, we seek to provide a preliminary survey of the online financial platforms promoted by RWE Telegram channels in Australia before a more comprehensive analysis of the ecosystem.32

The nine channels were chosen by a version of ‘snowball sampling’ (a technique, often used for studying specific groups that are hard to reach, in which research participants are asked to help researchers identify further subjects) adapted for a digital messaging platform built around forwarded messages and link sharing. The first Telegram channel was chosen because it shared RWE content such as posts that glorified Hitler as a martyr and called for a White Australia, and is connected to an individual who has a documented history of connection with Australian RWE groups. The next eight channels were chosen by following forwarded links from other channels (a function of the Telegram platform) to provide a sample (Figure 1).

Figure 1: How the nine Telegram channels were connected by forwarded links between 1 January and 15 July 2021.

Nine Telegram channels were chosen to form the sample based on the following characteristics:

  • An initial assessment of content (posts, images, videos, website links) shared in the channel revealed its ideological alignment with RWE, as defined above.

or

  • The channel shared content from or was affiliated with groups designated by the SPLC as hate groups, such as the Proud Boys, and the channel:
    • was linked to Australia
    • promoted at least one platform that offers online fundraising
    • had at least 100 subscribers as a baseline of audience reach.

This report seeks only to provide a preliminary mapping of where the Australian RWE ecosystem fundraises online. It doesn’t claim to be representative of the complete RWE ecosystem in Australia or assess the overall presence of certain ideologies. Nor do we attempt to analyse the scale or legality of RWE fundraising activity in Australia, how much is raised overall or how funds are ultimately used.

In recognition of work identifying the dangers of amplifying RWE and providing ‘breadcrumbs’ for the public into these ecosystems, only figures who are already well known to the public due to criminal charges and convictions highlighted in Australian media are named here.33 As shown in Figure 1, they include Thomas Sewell, whose affiliations with RWE groups have been covered extensively by Australian media and who is facing armed robbery, assault and violent disorder charges as recently as June 2021.34

This report examines the use of online funding platforms used by RWE Telegram channels in our sample but doesn’t analyse their broader uses and audiences. In general, those platforms weren’t intentionally built for RWE content; however, we note where platforms have purposefully taken a more laissez-faire approach to content moderation in stated opposition to more mainstream platforms.

Data collection and analysis included:

  • exporting the nine Telegram channels associated with our sample
  • examining channel files for terms including ‘donate’, ‘fund’ and ‘view’ to identify fundraising attempts and related platforms
  • mapping the funding ecosystem that stemmed from Telegram onto external platforms (Websites, YouTube, BitChute, DLive, Entropy, Odysee, Trovo, SubscribeStar, Patreon, cryptocurrency wallets, Buy Me a Coffee, Ko-fi, GoFundMe and PayPal, Represent)
  • examining websites related to channels in the sample using tools such as BuiltWith to identify advertising and ecommerce services such as Google AdSense, PayPal, Square and Amazon Associates Program
  • exporting and analysing Telegram JSON files using R packages tidyverse, lubridate and jsonlite to analyse how links were forwarded between channels.

Mapping the Australian RWE funding landscape

Introduction

We found at least 22 platforms, payment services, online tools and cryptocurrencies being used to solicit, process and earn funds linked to a sample of Telegram channels that shared RWE content in Australia between 1 January and 15 July 2021. Where we’ve been able to identify earnings in our sample, they appear to have been limited. This work establishes only that RWE-related fundraising activity is occurring and that the channels for it have been taken up in the Australian environment.

The sampled platforms include multiple emerging live-streaming websites such as DLive and Entropy, which are central to efforts aimed at building an audience for RWE content as well as the RWE community. Some of the platforms provide a means of soliciting donations or micropayments in cash or cryptocurrency. Fundraising was sometimes promoted via the sale of merchandise as well as on platforms such as Patreon, Buy Me a Coffee, PayPal and SubscribeStar. Others advertised various cryptocurrency wallets.

The range of platforms being used mirrors a recent review of the UK RWE online ecosystem published by Bellingcat.35 Likewise, Institute for Strategic Dialogue analysis in 2020 examined ‘73 US-based groups involved in promoting hatred against individuals on the basis of their gender, sexuality, race, religion or nationality’ and found similar online funding mechanisms.36 While global fundraising for RWE causes isn’t a new phenomenon, it’s arguably becoming a more complex one.37 Australia has domestic laws and is party to international taskforces concerning terrorism financing.38 However, there’s a ‘significant gap’ in knowledge internationally regarding the financial operations of groups that support acts of terrorism inspired by RWE ideology, or that support the broader ecosystem that creates content that could incite violence.39 The UN Counter-Terrorism Committee Executive Directorate has written that ‘money is often raised to fund a milieu – which may be accessed by those aspiring to carry out more violent acts – via event fees, merchandizing and donations.’ 40

The relationship between RWE material online, funding and acts of terrorism has been particularly scrutinised following the Christchurch terror attack. While in New Zealand, the Christchurch terrorist reportedly made at least ‘14 donations to RWE, anti-immigration groups and individuals’, 41 but his own attack was apparently self-funded.42 However, the Christchurch report said that it was ‘plausible to conclude’ that his exposure to RWE content online may have contributed to his actions on 15 March 2019.43 His donations formed a part of his engagement with that content. In an interview, professor of computer science at Elon University Megan Squire, who tracks RWE fundraising, described the use of online funding platforms that combine ‘tips’ and RWE live streams as the ‘monetisation of propaganda itself’.44

While RWE groups such as the US-based neo-Confederate group ‘League of the South’ historically solicited ‘dues’ or membership fees from members and sold merchandise,45 among other activities, requests for funds among the sample we examined were sometimes framed around individuals as RWE content creators rather than the activities of RWE groups specifically. This may mirror a social media ‘influencer’ model of patronage in which figures are rewarded for both the entertainment value and perceived credibility of the material they create online. Like wellness ‘influencers’, who use online platforms such as YouTube or Instagram to embody their health approach and build audiences ‘off the appeal of intimacy, authenticity and integrity’,46 RWE content creators may be supported for ostensibly ‘living’ the ideology they propagate.

Of course, the online funding ecosystem could also lead people to make RWE content simply to court money and attention rather than due to ideological commitment. However distinguishing between social harms caused by those who are dedicated to right-wing extremism and those who are simply exploiting a fundraising or profile-raising opportunity is not simple if both make RWE content. This ‘influencer’ model also demonstrates a potential impact of more leaderless or decentralised strategies on fundraising approaches,47 and a ‘borderless’ internet means that new funding strategies are quickly shared and emulated. As Dr Cynthia Miller-Idriss suggested in Hate in the Homeland: The New Global Far Right:

The modern far right is working to build muscular warriors equipped with the physical capacity to fight, along with “alt-right” thinkers with the intellectual capacity to lead and the commercial ecosystems that help market, brand, and financially support these actions. Underpinning all of these activities, though, is the modern far right’s rapid adoption—and creation—of a broad new tech and media ecosystem for communication, dissemination, and mobilization.48

Where they can be identified, the funds raised by our Australian sample via live streams and crowdfunding appear limited in comparison to the significant amounts raised by high-profile individuals in the US who share RWE content. They shouldn’t be dismissed, however, as fundraising can spike alongside high-profile events, as we discuss below.49 Likewise, donating can have an impact on an individual’s ties and symbolic commitment to an organisation or cause. Activists who seek to build movements online sometimes discuss the ‘commitment curve’, in which new members begin by viewing and liking content but can shift to being supposedly more committed to the cause once they begin to donate.50

In addition, fundraising links were forwarded and promoted in more popular RWE British, Canadian and American Telegram public channels, helping to solidify ties between RWE influencers and groups in multiple countries. Similarly, some Australian figures in the sample channels were hosted on overseas podcasts and livestream shows, which offered another opportunity to raise a group’s or individual’s profile and promote fundraising efforts, while others created dedicated content for foreign media channels with links to right-wing extremism.

Funding platforms used by our sample

Table 1: The online platforms, payment processors and cryptocurrencies used by channels in our sample that offer the opportunity to raise funds.

Live streaming and video hostingDLiveEntropyOdyseeBitChuteTrovoYouTubeVideo platforms that allow various forms of monetisation, including tips paid to content makers during a live stream, or donations facilitated on the content maker’s video page or channel.
Subscription platformsSubscribeStarPatreonPlatforms that allow users to make ongoing contributions to a content maker, or pay for access to exclusive content.
Cryptocurrency walletsBitcoin (BTC)MoneroLitecoin (LTC)Ripple (XRP)Ethereum (ETH)Cryptocurrencies with variable functionality, some of which may attempt to obscure the destination of funds. The publication of wallet addresses in public channels allows anyone to donate.
Micropayments and donationsBuy Me a CoffeeKo‑fiOnline platforms that allow users to make ongoing or one‑off contributions to a content maker or individual.
CrowdfundingGoFundMeWebsites that allow users to request donations for a specific cause or activity.
Payment gatewayPayPalAn online payment system that allows users to accept tips and donations, as well as a payment gateway on websites.
Ecommerce websiteRepresentAn ecommerce website that allows users to set up an online store, largely through uploading designs that are then added to T‑shirts and other merchandise.
Ecommerce platformWooCommerceAn open‑source ecommerce platform built on WordPress that allows users to offer goods or services for sale on their websites.
Ecommerce serviceSquareA web solution that helps users set up online retail stores as well as payment processing.
Donation widgetDonorboxSoftware that allows users to create donation forms that are embedded on their websites.
Online advertisingGoogle AdSenseAmazon Associates ProgramOnline advertising programs that allow website owners to potentially earn revenue by showing ads alongside online content. Amazon Associates Program allows web‑page owners to recommend Amazon products and earn revenue if a purchase occurs, among other customer actions.

Platform analysis

Telegram

The chat app Telegram plays an important role in the online funding ecosystem among our sample, while not itself being a mechanism for raising money. The platform did briefly attempt to set up a cryptocurrency before shutting it down after pushback from the US Securities and Exchange Commission, indicating a potential crossover between fundraising and content creation on the app if such a scheme were to ever go ahead.51

In our sample, Telegram was used by individuals who shared RWE content appeared to act as a central guide and point of communication with followers—potentially because channels in the sample feel their channels are less likely to be removed than on platforms such as YouTube or Facebook, as well as the perception of security offered by encryption and its ‘self-destruct’ function.52 Fundraising links were often shared across the channel’s online presence, creating a network that provided a plethora of funding options (Figure 2). For example, one channel in our sample used the video description section on its YouTube videos to provide a link to its Telegram channel, as well as offering a range of funding mechanisms, including PayPal.

Figure 2: Links to fundraising platforms stemming from one Telegram channel in our sample (some social platforms are omitted).

Within the broader ecosystem, there are also Telegram channels dedicated to acting as ‘guides’ to RWE audio and video content, and particularly live streams on sites such as YouTube and DLive,53 including those in Australia that discuss extremist content (Figure 3). Those channels post times and links to such content with the goal of helping followers find and engage with it. This ostensibly helps channels find more viewers and potentially financial supporters for their content. This ecosystem is particularly facilitated by Telegram’s forwarding function, which allows links from one public channel to be forwarded into another, creating a road map for users to expand the range of channels they follow.

In this way, like a channel using hyperlinks to connect a YouTube profile to a website or Facebook page, it builds ‘large propaganda networks with multiple entry points’.54

Figure 3: The top 20 channel links forwarded into a Telegram channel that appears to act as a guide for largely RWE and conspiracist videos and live streams on DLive, YouTube and other platforms between 1 December 2020 and 15 July 2021.

DLive

DLive.tv is a live stream video platform with an inbuilt ‘rewards’ system and is largely used for gaming content. Viewers can donate ‘lemons’ to content creators (a reward point system that creators can cash out, while DLive takes 20% on all transactions on the platform) and take part in live chat rooms.55 DLive was embraced by a number of extremist figures in the US in 2020, including American RWE figure Nick Fuentes, who earned around US$61,655 on the platform in April–October 2020, according to estimates by Dr Megan Squire.56 The SPLC also found that some extremists used the site to ‘supplement’ offline fundraising efforts.57

The platform came to global attention after several figures streamed on DLive during the 6 January 2021 breach of the US Capitol building.58 While DLive accounts linked to the Australian Telegram channels in our sample don’t appear to be raising similar levels of revenue to US figures, they’re making use of the platform and could expand both usage and income generation. Some have a regular weekly streaming schedule, while others use the website more sporadically.

While the platform appealed to RWE figures due to its lax moderation compared to more mainstream live-streaming sites, DLive has since cracked down on some white supremacist channels following the Capitol Hill storming. In a statement following the riot, DLive said it had ‘suspended 3 accounts, forced offline 5 channels, banned 2 accounts from live streaming and permanently removed over 100 past broadcasts’ … ‘for content that violated its Terms of Service and Community Guidelines on or about January 6th.’ 59 Also in January 2021, DLive announced restrictions on what kind of content could raise money on the platform—including streams under its ‘X-tag’ section for mature audience content.60

However, Australian RWE channels in our sample are still collecting donations on the site and regularly live streaming. For example, one live stream in our sample following the DLive announcement was tagged as being about the video game Fortnite but instead discussed race using terms such as ‘pure blood’ and ‘mongrels’.

Entropy

Entropy is a video platform that allows users to port their streams from other platforms, including YouTube, Twitch and DLive, in what it calls a ‘censorship free environment’.61 That means that, even if their channel is stripped of the ability to run advertising or accept tips on those platforms, they can keep collecting donations on Entropy. On Entropy, viewers can make ‘paid chats’, in which they post a comment or question by donating in multiple currencies, including US and Australian dollars. The site takes 15% from paid interactions.62

YouTube also performs a similar function, allowing users to pay for ‘Super Chats’ that make their chat messages stand out during a live-stream chat session. However, YouTube has cracked down on some RWE figures monetising their channels after outlets such as BuzzFeed News reported on their use of the platform for fundraising.63 One channel in our sample specifically cited YouTube’s demonetisation of his account as a reason why financial support was required. In a statement provided to ASPI on 16 June 2021, Google said: ‘Channels that repeatedly brush up against our hate speech policies will be suspended from the YouTube Partner program, meaning they can’t run ads on their channel or use other monetization features like Super Chat.’64

As an example of how Entropy is used, one Telegram channel in our sample regularly posts links to live stream content on sites such as YouTube and DLive while encouraging users to ask questions via Entropy. Earlier this year, this channel featured Thomas Sewell, who is associated with Australia’s National Socialist Network and the European Australia Movement,65 and who is facing a number of charges, as described earlier in this report.66 During the stream, which also took place on YouTube, the channel claimed that viewers paid between US$3 and US$50 on Entropy to ensure their questions were posed to Sewell.

Odysee

The video platform Odysee was launched at the end of 2020 by chief executive Jeremy Kauffman, who said he wanted to recapture what he saw as the early internet where ‘anyone could speak and anyone could have a voice’.67 It hosts a variety of content, but it does in some cases appear to operate as a backup archive for videos that appear on other sites from which clips expressing extremist rhetoric are more likely to be removed.68

Odysee claims to be built on blockchain technology,69 which potentially makes it more difficult to remove videos. It also offers different ways to monetise content, including earnings per view, tips from viewers and site promotions.70 The company is also introducing live streaming.71 At least four channels in our sample used Odysee, including channels that hosted anti-Semitic videos but it’s unclear if or how much they had earned. Their pages displayed a button that allows viewers to ‘support this content’ either by paying a tip or paying to ‘boost’ the channel (Figure 4).72 Those contributions are in LBRY credits, which is a cryptocurrency currently being scrutinised by the US Securities and Exchange Commission.73

Figure 4: A channel seeking LBRY credits.

BitChute

BitChute is a British video hosting website that hosts a range of content.74 It has been widely used by extremists and figures from conspiracist communities, including QAnon and anti-vaccination activists, largely as a means of backing up videos removed from other sites.75 Some channels in our sample used it to share anti-Semitic material, among other content. BitChute provides integration with a number of third-party payment providers, including SubscribeStar, CoinPayments, Patreon and PayPal (Figure 5).76 In our sample, two of the five channels with BitChute pages had ‘monetised’ it as of 15 July 2021: one with PayPal, and the other with PayPal and Patreon.

Figure 5: BitChute account seeking payments via PayPal.

Trovo

Three channels in our sample promoted live streams on the site, but it’s unclear whether they were able to earn any income from the platform. A video streaming service, Trovo is owned by TLIVE LLC, which is an affiliate of the Chinese technology giant Tencent. Trovo offers various opportunities to earn revenue,77 but it’s unclear whether the channels are monetised on the platform.

PayPal, Patreon and SubscribeStar

A number of channels in our sample offered direct ways to donate: four used PayPal.Me pages that allow people to send money, and two offered Patreon subscriptions. Patreon is a membership platform that allows content creators to offer different subscription levels with varying levels of content and access. One Patreon account belonging to an Australian RWE content creator in the sample offered six support levels, ranging from under $2 per month up to almost $300 per month for exclusive content and ‘follow backs’ on social media. Two channels also used SubscribeStar, which similarly allows users to sign up for various levels of membership offering content and access, for which the site takes a 5% service fee.78

Donorbox

One channel also used Donorbox on its related website. Donorbox allows a user to include a donation embed or widget on their website that prompts visitors to make one-time or monthly donations (Figure 6).

Figure 6: A Donorbox donation widget.

GoFundMe

Another channel attempted to use crowdfunding website GoFundMe to raise money for a project, but didn’t appear to have attracted any donors via the website as of 15 July 2021. The channel also claimed that donations to the program were ‘tax deductible’, but we couldn’t locate the company on the Australian Charities and Not-for-profits Commission register or on state-based community organisation registers.

This is an important mechanism to monitor, however, as RWE groups overseas have obtained charity status. The Institute for Strategic Dialogue’s 2020 report, Bankrolling bigotry: an overview of the online funding strategies of American hate groups, found that 32 (44%) of the 73 hate groups examined had some form of charity tax status in the US.79 ‘This potentially helps legitimise hate groups and provides them with avenues through which to raise money’, the report said.

Buy Me a Coffee and Ko-fi

Channels in our sample used microdonation sites such as Buy Me a Coffee and Ko-fi—platforms that allow content creators to solicit donations and subscriptions by buying ‘coffees’. On Buy Me a Coffee they start at around US$3.39 (A$4.60). One channel, for example, shared several Buy Me a Coffee pages in 2021, ostensibly for Thomas Sewell’s legal fees (see Figure 7 below) for the charges described earlier in this report. It’s unclear, however, whether Sewell was able to withdraw those funds, as his pages have been repeatedly removed by the website. However, a post in the channel said ‘it doesn’t do anything to the money when it gets taken down’. A Buy Me a Coffee spokesperson declined to say why the pages were removed.80

Figure 7: Buy Me a Coffee posts raising funds for Thomas Sewell’s legal fees.

Merchandise

Two channels in our sample offered merchandise associated with their branding and ideology, including clothing and books via linked websites, which were examined using the online tool BuiltWith.

One used the ecommerce widget WooCommerce on its website, as well as payment facilitator PayPal.

The other used the online marketplace Represent, which allows people to customise clothing and offer it for sale on dedicated branded pages, as well as via the website builder and payment processor Square.81 The volume of sales is unclear, but counterterrorism financing expert Jessica Davis has written that ‘propaganda sales are unlikely to generate significant profit for terrorists and extremists, but generate a small source of funds, create loose networks of likeminded individuals and serve to keep propaganda available to potential new recruits.’82

Online advertising

Of the five channels in our sample that directed viewers to associated websites, three of those websites appeared to use Google AdSense (an online advertising program that could allow them to earn revenue when ads are seen or clicked), based on analysis using the BuiltWith website analytics tool. One also used Amazon Advertising and appeared to be part of an Amazon Associates Program, which allows web-page owners to recommend and link to Amazon products and earn money if a sale occurs, among other functions.83 Links from the website to a number of products on Amazon’s webstore included Store ID tags.

Cryptocurrencies

We observed wallet addresses for cryptocurrencies including bitcoin, monero, ethereum, ripple and litecoin promoted in Telegram channels and on associated accounts as a means of soliciting funds.

John Bambeneck, a computer security researcher who has tracked donations to RWE figures in Europe and the US, said in an interview that such figures still mostly use bitcoin ‘because that’s the easiest for people to get their minds around for low dollar donors’. Nevertheless, while money may be accepted in bitcoin, it can be converted to another cryptocurrency and moved to another wallet in an attempt to ‘create a break in traceability’.84

The use of cryptocurrencies can also be seen as part of a distrust of traditional financial institutions by RWE actors, and, in some cases, the developers of these ‘coins’ have explicitly cultivated that perception.85 Monero, in particular, has been embraced by overseas RWE channels due to its emphasis on privacy and lack of traceability. Notorious white supremacist website the Daily Stormer has announced that it accepts only monero donations after having been pushed off other funding platforms.86 While it can’t promise complete anonymity, monero claims to ‘hide the sender, amount, and receiver in the transaction’, making it difficult for third parties to track.87 It does it by mixing the wallet address with others when the coin is transferred.88

In contrast, researchers were previously able to track bitcoin sent to a range of RWE figures in the US.89

In one case, according to a 14 January 2021 Chainalysis report, American RWE figure Nick Fuentes was gifted bitcoin worth around US$250,000 from a donor in December 2020.90 ‘Previously, the most he had ever received in a single month was $2,707 worth of Bitcoin,’ according to the report.

A monero wallet address was also shared on a Telegram channel associated with Thomas Sewell, describing the funds raised as being used for Sewell’s legal fees. Likewise, a channel linked to Sewell’s former associate Blair Cottrell similarly advertised a number of cryptocurrency addresses, described as a means of supporting his content. Cottrell was convicted of ‘inciting hatred, contempt and ridicule of Muslims’ in 2017.91

Despite the increasing difficulty of tracking some types of cryptocurrency transactions, Bambeneck emphasised that there are still relatively few platforms on which money can be turned into cryptocurrency and donated, and vice versa, and that this provides a potential point of scrutiny by authorities where appropriate. ‘They can be sitting on a bunch of monero, but eventually they’re going to want to cash it out, so they’re going to want to use regulated exchanges,’ he said.92

Table 2 shows the highest balances over the 12 months to 15 July 2021 in some of the cryptocurrency wallet addresses shared in our sample.

Figure 8 is a post on Telegram highlighting Thomas Sewell’s donation request in monero.

Table 3 summarises the use of funding platforms by the channels in our sample.

Table 2: Highest balance over the 12 months to 15 July 2021 in some of the cryptocurrency wallet addresses shared in our sample, as per walletexplorer.com and etherscan.io. (Conversion as of 12 August 2021).

CryptocurrencyHighest balance over past 12 months
Bitcoin0.11813704 (A$7,280.84)
Bitcoin0.01294395 (A$797.74)
Litecoin0
Ethereum0.120330393 (A$514.83)
Ethereum0.009916 (A$42.43)

Note: We can’t confirm who controls the wallet, whether funds in the wallet were raised by donation solely or in part, or whether funds were cashed out or transferred to another wallet. Monero and ripple aren’t included.

Figure 8: A post on Telegram highlighting Thomas Sewell’s request seeking donations in monero.

Table 3: Summary of funding platforms in our sample of nine Telegram channels.

PlatformPresence in sample
Bitcoin (BTC)Two channels
MoneroTwo channels
Litecoin (LTC)One channel
Ripple (XRP)Two channels
Ethereum (ETH)Two channels
DLiveFive channels
EntropyThree channels
OdyseeFour channels
BitChuteFive channels
TrovoThree channels

Platform policies and demonetisation

All but two of the platforms and services we examined had terms of service for users that explicitly prohibited hate speech or threatening behaviour in some way (Table 4). In general, however, online content and payment platforms grant themselves considerable flexibility when it comes to interpreting and enforcing their own rules and typically operate with limited independent oversight and disclosure.93 Efforts to remove individuals and groups that share RWE content from funding platforms have often been prompted by public pressure on private companies to enforce their existing terms of service. For example, following the Unite the Right rally in Charlottesville in 2017, which left one woman dead, PayPal was pushed to remove accounts used by figures involved in the event.94 Activist groups have also pressured payment providers such as Mastercard and Visa to remove what they called ‘white supremacist groups’ from their platforms.95 Bringing significant challenges for freedom of expression as well as social risks, the enforcement of terms of service by funding platforms has been described as ‘reactive and arbitrary’.96

Table 4: The policies on hate speech of platforms used by a sample of 9 RWE channels in Australia as of 15 July 2021.

PlatformPolicy on hate speech and extremist groups
DLiveDLive prohibits activities and material (including live streams, videos and comments) that: ‘Constitute or encourage hate speech that directly attacks a person or group on the basis of race, ethnicity, national origin, religion, medical or mental condition, disability, age, sexual orientation, gender, or gender identity’.
EntropyNo policy on website.
OdyseeNo specific policy on hate speech, but prohibits using the service to ‘Stalk, intimidate, threaten, or otherwise harass or cause discomfort to other users’ or ‘for any illegal or unauthorized purpose or [to] engage in, encourage, or promote any illegal activity’.
TrovoProhibits conduct that would ‘promote or advocate for terrorism or violent extremism’ or ‘is threatening, abusive, libelous, slanderous, fraudulent, defamatory, deceptive, or otherwise offensive or objectionable’.
Buy Me a CoffeeProhibits content that’s ‘threatening, abusive, harassing, defamatory, libelous, tortious, obscene, profane, or invasive of another person’s privacy’.
Ko-fiProhibits ‘hate speech, intimidation or abuse of any kind targeting any individual, group or institution’.
PayPalProhibits use of the service for activities that involve ‘the promotion of hate, violence, racial or other forms of discriminatory intolerance or the financial exploitation of a crime’.
BitChuteProhibits activities that contain incitement to hatred ‘as defined in section 368E subsection (1) of the UK Communications Act 2003. This applies to any material likely to incite hatred against a group of persons or a member of a group of persons based on any of the grounds referred to in Article 21 of the Charter of Fundamental Rights of the European Union’ and ‘any act of violence or intimidation carried out with the intention offurthering a religious, political or any other ideological objective’. BitChute maintains and publishes a prohibited entities list that contains entities that BitChute has independentlyidentified and explicitly prohibited on the platform under this guideline.
GoFundMeUsers agree not to use the service for ‘User Content or reflecting behavior that we deem, in our sole discretion, to be an abuse of power or in support of hate, violence, harassment, bullying, discrimination, terrorism, or intolerance of any kind relating to race, ethnicity, national origin, religious affiliation, sexual orientation, sex, gender, gender identity, gender expression, serious disabilities or diseases’.
SubscribeStarProhibits use that would ‘harass, abuse, insult, harm, defame, slander, disparage, intimidate, or discriminate based on gender, sexual orientation, religion, ethnicity, race, age, national origin, or disability’.
PatreonProhibits ‘projects funding hate speech, such as calling for violence, exclusion, or segregation. This includes serious attacks on people based on their race, ethnicity, national origin, religion, sex, gender, sexual orientation, age, disability or serious medical conditions.’
RepresentProhibits material that is ‘hateful, or racially, ethnically or otherwise objectionable’ or is ‘advocating persecution based on gender, age, race, religion, disability or national origin, containing explicit sexual content or is otherwise inappropriate for Represent production’.
WooCommerceNo policy. A spokesperson told ASPI ‘WooCommerce, just like WordPress, is a free and open‑source software (as opposed to a platform/SAAS) distributed under GPL V2 license which means that anyone is free to use and modify it without any restrictions or supervision from our side. There isn’t a way for us to force any sort of policies on WooCommerce users, or monitor any sort of compliance.’97
SquareProhibits the upload or provision of content that ‘is false, misleading, unlawful, obscene, indecent, lewd, pornographic, defamatory, libelous, threatening, harassing, hateful, abusive, or inflammatory’.
DonorboxProhibits ‘engaging in, encouraging, promoting, or celebrating unlawful violence toward any group based on race, religion, disability, gender, sexual orientation, national origin, or any other immutable characteristic’.
Google AdSenseProhibits content that ‘incites hatred against, promotes discrimination of, or disparages an individual or group on the basis of their race or ethnic origin, religion, disability,age, nationality, veteran status, sexual orientation, gender, gender identity, or othercharacteristic that is associated with systemic discrimination or marginalization’.
Amazon Associates ProgramUnsuitable sites include those that ‘promote or contain materials or activity that is hateful, harassing, harmful, invasive of another’s privacy, abusive, or discriminatory (including on the basis of race, color, sex, religion, nationality, disability, sexual orientation, or age)’.

Indeed, the approach of payment platforms to RWE content wasn’t consistent among our sample.98 Buy Me a Coffee fundraisers posted to a Telegram channel associated with Thomas Sewell appeared to be repeatedly suspended, but the company declined to say why.99 However, some of the sites used by our sample that allow donations or tips, such as the live-streaming platform DLive, have announced crackdowns on ‘violent extremists’.100 Nevertheless, we found Australian RWE DLive channels circumventing the platform’s policies, potentially due to their lack of international prominence, limited monitoring or a lack of focus from those platforms on Australia.

The definitional difficulties surrounding the sharing of RWE content, as explored above, may also play a role. The platforms rarely define, at least in publicly available documentation, what they mean by terms such as ‘hate speech’ or how a determination is made. One exception was Patreon, which provided a list of questions it may consider when reviewing an account for a potential hate-speech violation, such as ‘Does the creator glorify a group that is known to support ideologies that would be classified as hate speech under this policy?’101

The history of public pressure leading to RWE deplatforming from funding platforms has arguably fuelled what Cynthia Miller-Idriss has called an ‘entrepreneurial spirit within the far-right’.102 RWE groups and figures in the US and Europe have moved to fundraising platforms with fewer restrictions or those purpose-built for them. The now inactive crowdfunding site Hatreon is one example of this attempt to supplant more mainstream funding sources.103 However the demise of Hatreon (Visa reportedly suspended its processing support for the site) shows how funding platforms remain vulnerable to the decisions of major payment processors.104

Cryptocurrencies offer an increasingly popular alternative that’s seen as less vulnerable to deplatforming, as indicated by their use among our sample.105 Nevertheless, pressure points may emerge where cryptocurrencies are converted into or out of fiat currencies. Coinbase, a popular cryptocurrency exchange, reportedly shut down accounts attempting to make bitcoin transfers to RWE website the Daily Stormer in 2017.106 The company’s user agreement prohibits uses that ‘encourage hate, racial intolerance, or violent acts against others’.107 Reasearch fellow with the International Centre for Counter-Terrorism, Dr Eviane Leidig has also proposed that cryptocurrency exchanges like Coinbase and Bittrex become members of the Global Internet Forum to Counter Terrorism, which is a collection of technology companies that works to counter terrorist and violent extremist activity online.108

International case study

RWE figures in the US have raised significant amounts using crowdfunding tied to high-profile events such as the Million MAGA Marches in late 2020 and the 6 January 2021 Capitol riots. While the US political and media ecosystems are unique, they nevertheless provide an example of the scale of fundraising possible using online platforms. We don’t attempt to assess the legality of that activity in this report.

Various militia groups, as well as the Proud Boys (labelled a hate group by the SPLC109 and designated as a terrorist entity in Canada),110 appear to have raised thousands of dollars on the Christian crowdfunding platform GiveSendGo in December 2020 and January 2021, as revealed by a website data breach. Shared with ASPI ICPC by transparency group Distributed Denial of Secrets,111 the GiveSendGo dataset shows that the site was used to raise at least $172,000 in support of activities with claimed links to Proud Boy chapters in the two-month period, with the stated goal of covering expenses such as costs of travel and materials. As noted by The Guardian, ‘Two separate fundraisers asked patrons to fund protective gear and communications equipment for regional Proud Boys chapters, raising $4,876 and $12,900 respectively’.112 Analysis by the Washington Post found that at least $247,000 was raised on the site for 24 people looking to cover ‘travel, medical or legal expenses connected to “Stop the Steal” events’.113

GiveSendGo was also used to raise at least $164,399 as part of ‘legal defense’ funds as of February 2021, including funds ostensibly for high-profile figures in the Proud Boys, including Enrique Tarrio (at least $113,000, according to the DDoSecrets data and a cached GiveSendGo page)114 and Nick Ochs (two funds appear in his name, amounting to at least $22,899, according to the DDoSecrets data and cached GiveSendGo pages),115 as well as members of militia groups (Figure 9). These are likely to be a conservative estimates, given that we included only individuals and funds in our dataset with alleged links to events leading up to and including the 6 January riot and to the Proud Boys or the militia group Oath Keepers, as verified by cached records of the GiveSendGo website, media reports and other sources. In addition, some fundraisers captured in the DDoSecrets dataset are still accepting funds.

Figure 9: Funds raised on GiveSendGo as of February 2021 that are claimed to be linked to the Proud Boys and Oath Keepers, drawn from Distributed Denial of Secrets data.

‘Breadcrumbs’ and ties to the international RWE ecosystem

The online funding mechanisms described in this report also serve as an additional point of connection between the Australian RWE milieu and those who share their views internationally.

Funding techniques and strategies developed in one country or ecosystem are copied and refined, and vice versa. As Tom Keatinge, Florence Keen and Kayla Izenman wrote in 2019:

While there is no international struggle under which these actors currently unite (in contrast to the threat posed by Islamist actors), RWE terrorist and extremist groups are increasingly connected, sharing and emulating best practices, which may include financial methodologies and the transferring of funds.116

Public channels on Telegram, in particular, allow messages to easily be forwarded into other groups – a mechanism that helps build the RWE community domestically and internationally. For example, we observed pleas for support for Thomas Sewell’s legal fund, which the associated Telegram channel said could be provided in the cryptocurrency monero or via Buy Me a Coffee, forwarded into North American RWE Telegram channels—some with more than 50,000 members (Figure 10). Video clips of his alleged confrontation with a security guard, which resulted in an assault charge, were also highly shared across a variety of local and foreign Telegram channels alongside the financial support request.117

Figure 10: Calls for funding created in March 2021 in a Telegram channel associated with Tom Sewell and forwarded into a sample of Australian and overseas RWE and conspiracy theory channels (channel subscriber numbers recorded in July 2021).

We also observed channels in our sample and associated individuals solidifying connections to the international RWE ecosystem by appearing on British, South African and American podcasts and live-stream shows, which were sometimes used to promote fundraising efforts and posted back on their associated Telegram channels (Figure 11). In some cases, such exchanges appear to be formalised: individuals associated with at least two channels in the sample have regular shows and contribute to overseas media channels that sometimes share RWE content, although it isn’t clear what or whether they earn from those relationships financially.

Figure 11: The top 20 Telegram channels forwarded into a Telegram channel that shares content from a North American RWE figure between 1 January and 15 July 2021; a channel associated with Australian Thomas Sewell is among the top 10.

Recommendations

The ways online funding mechanisms can be exploited by individuals and groups sharing RWE material in Australia are an emerging problem. Strong policies and programs to address the drivers of right-wing extremism are important for undermining both the popularity of online extremist content and for disengaging people from RWE movements. However, another strategy that Australian law enforcement, intelligence agencies, policymakers and civil society should explore involves addressing and undermining the financial incentives that can help sustain and grow such movements. This report makes recommendations for government, companies and civil society. These recommendations are grouped into six categories:

1. Reporting obligations for online platforms that allow fundraising

Some financial platforms have obligations under Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) if they reach the benchmark of providing a ‘designated service’ with a ‘geographical link’ to Australia, among other requirements.118 While that may be unlikely or complex for some foreign entities that do not have a permanent establishment in Australia, for example, the AML/CTF Act requires a variety of customer identification and verification processes, as well as the reporting of suspicious transactions and record keeping.

Government and regulators should:

  • consider whether some of the emerging financial platforms discussed in this report have obligations under the AML/CTF Act
  • consider new processes to ensure that emerging online financial platforms are recording and reporting suspicious transactions, among other obligations, even if the service is not located in Australia.

2. Hate crime monitoring

As this report notes, Australia lacks a central registry of hate crimes and related incidents similar to the US Federal Bureau of Investigation’s Hate Crime Statistics program. Some organisations, such as Islamophobia Register Australia, track incidents. However, data is collected using different criteria, verification and methodologies and isn’t centralised, frustrating an overarching understanding of such crimes.119 As Professor Greg Barton has written, ‘we are flying blind’.120 Such a registry would provide considerable benefit in understanding the prevalence of RWE-motivated incidents and crime in Australia and provide a better framework to understand related financial activity.

  • The government should work with civil society and other groups to create a unified national hate crime and incidents statistics database.

3. Prohibitions against the commercial exploitation of a person’s notoriety from criminal offending

In Australia, various legal jurisdictions have varying and at times controversial laws aimed at preventing criminals from benefiting from their crimes,121 including in some cases from ‘selling’ their story.122 For example, the Proceeds of Crime Act 2002 has provisions that aim to deprive people of ‘literary proceeds derived from the commercial exploitation of their notoriety from having committed offences’.123 Commercial exploitation can be by any means, including visual media.124

  • Law enforcement should consider whether the online fundraising of RWE figures in Australia who have gained notoriety from criminal activity falls under the Proceeds of Crime Act or similar state provisions.

4. Enhanced transparency reporting

Many of the platforms in our sample have been co-opted by groups and individuals that share RWE content, even if they weren’t built for that purpose. In general, however, few offer governments, researchers, civil society or the public significant transparency about who is using their platforms, how much is being raised or whether funds are successfully ‘cashed out’—all of which necessarily raise privacy considerations, among other civil liberty concerns. Nor do they typically share detailed reports on how many accounts have been closed or removed from their platforms for sharing hate speech or otherwise breaking platform policies. This is also an issue when it comes to ‘false positives’, or when users are inappropriately removed—and especially when there are no meaningful avenues for appeal.

It’s important to note that ‘arbitrary and reactive’ action on the use of such platforms to fund RWE individuals and movements allows private companies considerable latitude over serious social issues, and government and civil society groups must play a role in defining platform regulatory responsibilities, thresholds and safeguards.125 Civil society is already pushing for change in this space.126 In June 2021, for example, the Electronic Frontier Foundation and 21 other digital rights organisations wrote to PayPal and its subsidiary Venmo calling on the companies to ‘ensure due process, transparency, and accountability’ for users.127 To that end, the letter broadly called for the companies to:

  • Publish regular transparency reports
  • Provide meaningful notice to users
  • Offer a timely and meaningful appeal process.

Non-governmental bodies such as the Global Internet Forum to Counter Terrorism are also playing a role in the moderation of extremist content,128 although not without scrutiny concerning the transparency and accountability of their activities.129 Founded in 2017 by Facebook, Microsoft, Twitter and YouTube, the forum aims to build tools and processes that counter the use of technology platforms by terrorists and violent extremists. Likewise, the Organisation for Economic Co-operation and Development is developing a Voluntary Transparency Reporting Framework for Terrorist and Violent Extremist Content Online.130

Government agencies, companies and civil society should:

  • examine multilateral mechanisms to ensure greater platform transparency and accountability on policy and enforcement
  • come together with the platforms and services mentioned in this report, where possible, to discuss opportunities for enhanced transparency and accountability regarding the application of those platforms’ terms of services and opportunities for greater clarity and information sharing
  • examine opportunities to promote a ‘safety by design’ approach that puts user safety and rights at the centre of the design, development and release of online funding products and services.

5. Further research on the relationships between online content creation and fundraising by RWE influencers, radicalisation and mobilisation to violence

More research is needed to better understand how online funding platforms may incentivise or help sustain the growth of RWE entities in Australia, and the symbiotic relationship between the two.

Government agencies and civil society should fund and support work that examines, among other topics:

  • further themes, tools and narratives of RWE fundraising in Australia
  • whether law enforcement agencies have sufficient capability and expertise to investigate these online ecosystems, and identify potential training to overcome any gaps
  • how the RWE funding ecosystem may overlap with other online movements, such as groups that espouse conspiracy theories concerning Covid-19
  • how the broader online ecosystem (for example, video platforms, chat apps, social media services and hosting services) amplifies, distributes or conducts traffic to the funding platforms mentioned in this report.

6. Countering violent extremism

While more work needs to be done to understand the role of online funding mechanisms in the RWE ecosystem, countering violent extremism early-intervention providers in government agencies and NGOs should be aware that those funding mechanisms could be a factor when they’re working to disengage people from the RWE community.

  • Government agencies and NGOs that provide countering violent extremism services should investigate whether income from online platforms could be influential or appealing for radicalised or at-risk individuals, and build the ability to identify that potential influence.

Acknowledgements

Thank you to Danielle Cave, Dr Jacob Wallis and Albert Zhang for all of their work on this project. Thank you also to all of those who peer reviewed this work and provided valuable feedback, including anonymous reviewers and Dr John Coyne, Michael Shoebridge, Fergus Hanson, Dr Debra Smith, Lydia Khalil, Dr Kaz Ross and Levi West. ASPI’s International Cyber Policy Centre receives funding from a variety of sources including sponsorship, research and project support from across governments, industry and civil society. No specific funding was received to fund the production of this report.

What is ASPI?

The Australian Strategic Policy Institute was formed in 2001 as an independent, non‑partisan think tank. Its core aim is to provide the Australian Government with fresh ideas on Australia’s defence, security and strategic policy choices. ASPI is responsible for informing the public on a range of strategic issues, generating new thinking for government and harnessing strategic thinking internationally.

ASPI’s sources of funding are identified in our annual report, online at www.aspi.org.au and in the acknowledgements section of individual publications. ASPI remains independent in the content of the research and in all editorial judgements.

ASPI International Cyber Policy Centre

ASPI’s International Cyber Policy Centre (ICPC) is a leading voice in global debates on cyber, emerging and critical technologies, issues related to information and foreign interference and focuses on the impact these issues have on broader strategic policy. The centre has a growing mixture of expertise and skills with teams of researchers who concentrate on policy, technical analysis, information operations and disinformation, critical and emerging technologies, cyber capacity building, satellite analysis, surveillance and China-related issues.

The ICPC informs public debate in the Indo-Pacific region and supports public policy development by producing original, empirical, data-driven research. The ICPC enriches regional debates by collaborating with research institutes from around the world and by bringing leading global experts to Australia, including through fellowships. To develop capability in Australia and across the Indo-Pacific region, the ICPC has a capacity building team that conducts workshops, training programs and large-scale exercises for the public and private sectors.

We would like to thank all of those who support and contribute to the ICPC with their time, intellect and passion for the topics we work on. If you would like to support the work of the centre please contact: icpc@aspi.org.au

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This publication is designed to provide accurate and authoritative information in relation to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering any form of professional or other advice or services. No person should rely on the contents of this publication without first obtaining advice from a qualified professional.

© The Australian Strategic Policy Institute Limited 2021

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First published August 2021
ISSN 2209-9689 (online)
ISSN 2209-9670 (print)

Cover image produced by Claudia Chinyere Akole

Funding Statement: No specific sponsorship was received to fund production of this report.

  1. As an example, in June 2020, Facebook designated ‘boogaloo’ a ‘violent US-based anti-government network as a dangerous organization’ and banned it from the platform under its under Dangerous Individuals and Organizations policy, online. ↩︎
  2. Gerrit De Vynck, Ellen Nakashima, ‘RWE groups move online conversations from social media to chat apps—and out of view of law enforcement’, Washington Post, 18 January 2021, online. ↩︎
  3. The 2021 Lowy Institute Poll found that 42% of those surveyed saw ‘right-wing extremism as a critical threat to the vital interests of Australia in the next ten years’, online. ↩︎
  4. Will Carless, ‘Crowdfunding hate: how white supremacists and other extremists raise money from legions of online followers’, USA Today, 4 February 2021, online. ↩︎
  5. In March 2021, ASIO Director-General Mike Burgess announced the organisation’s new preference to categorise violent extremism as ‘religiously motivated’ or ‘ideologically motivated’, rather than as ‘Islamic’ or ‘RWE’, for example—a change that was challenged by some terrorism experts and political figures. ‘Ideological extremism’ includes right-wing extremism. Burgess told The Guardian that he would still say ‘extreme rightwing terror … when it matters and when that is sensibly there’. Daniel Hurst, ‘Australia’s spy chief vows to call out rightwing terrorism when there’s a specific threat’, The Guardian, 20 March 2021, online. ↩︎
  6. Australian Security Intelligence Organisation (ASIO), Director-General’s annual threat assessment, Australian Government, 17 March 2021, online. ↩︎
  7. Telegram is a messaging application. For more discussion of Telegram, please see the section titled ‘Telegram’ under the ‘Platform analysis’ section on page 10. ↩︎
  8. Report: Royal Commission of Inquiry into the terrorist attack on Christchurch masjidain on 15 March 2019, Part 4, Chapter 7, paragraph 17, New Zealand Royal Commission, 21 December 2020, online. ↩︎
  9. ‘Posing as patriots: Graphika exposes an active campaign by suspected Russian actors to covertly target RWE US audiences on alternative platforms’, Graphika, 7 June 2021, online. ↩︎
  10. Kristy Campion, ‘A “lunatic fringe”? The persistence of right wing extremism in Australia’, Perspectives on Terrorism, April 2019, online. ↩︎

ANZUS at 70: The past, present and future of the alliance

The ANZUS Treaty was signed on 1 September 1951 in San Francisco. It was the product of energetic Australian lobbying to secure a formal US commitment to Australian and New Zealand security. At the time, the shape of Asian security after World War II was still developing. Canberra worried that a ‘soft’ peace treaty with Japan might one day allow a return of a militarised regime to threaten the region.

ANZUS at 70 explores the past, present and future of the alliance relationship, drawing on a wide range of authors with deep professional interest in the alliance. Our aim is to provide lively and comprehensible analysis of key historical points in the life of the treaty and indeed of the broader Australia–US bilateral relationship, which traces its defence origins back to before World War I.

ANZUS today encompasses much more than defence and intelligence cooperation. Newer areas of collaboration include work on cybersecurity, space, supply chains, industrial production, rare earths, emerging science and technology areas such as quantum computing, climate change and wider engagement with countries and institutions beyond ANZUS’s initial scope or intention.

The treaty remains a core component of wider and deeper relations between Australia and the US. This study aims to show the range of those ties, to understand the many and varied challenges we face today and to understand how ANZUS might be shaped to meet future events.

Watch the launch webinar here.