New report warns Australia’s naval fleet expansion could trigger major workforce strain in the 2030s

A new report from UNSW Canberra’s Naval Studies Group warns that Australia’s current naval shipbuilding program - the largest ever undertaken - risks acute workforce and sustainment pressures as the Royal Australian Navy prepares to introduce more than a dozen new warships in the 2030s.

The report, titled Building a Strong and Sustainable Fleet, examines more than 70 years of Australian naval shipbuilding history and warns that without significant reform the nation's ambitious Naval Shipbuilding and Sustainment Plan could recreate the costly "boom and bust" cycles that have historically undermined Australia's sovereign maritime capability.

The report, released at the Australian Naval Institute's 2026 Goldrick Seminar, was authored by Prof Peter Jones and Dr David Shackleton, both retired vice admirals and adjunct professors at UNSW Canberra. The report makes a number of recommendations that would enable the sustainability of Australia's multi-billion-dollar naval enterprise while avoiding future skills shortages, production disruptions and capability gaps.

The report notes that the Royal Australian Navy operates the most diverse fleet among advanced navies, drawing on platforms, technologies and supply chains from 10 different countries. 

The authors warn that this level of complexity increases ownership costs, places pressure on maintenance and logistics systems, and fragments the specialist workforce required to support the fleet.

The report argues that the simultaneous introduction of the Virginia-class submarines, SSN-AUKUS submarines and Mogami-class frigates will further increase demands on Australia's limited pool of skilled workers while deepening reliance on international supply chains.

Key findings

Workforce pressure in the 2030s

The report identifies a significant "surface fleet crunch" in the 2030s. 

While no new surface vessels are expected to enter service during the remainder of the current decade, the Navy will face the challenge of introducing 12 to 13 new surface warships during the following decade, creating substantial demand for skilled personnel across construction, sustainment and operations.

Risk of a future shipbuilding downturn

Prof Jones and Dr Shackleton warn that Australia faces another major shipbuilding slowdown as early as 2041 if follow-on construction programs are not planned and approved well in advance. Such a gap would undermine workforce retention and erode sovereign industrial capability.

Potential submarine capability gap

The report also highlights the risk of a significant reduction in Australia's submarine force during the 2030s. Without extending the life of the Collins-class fleet to around 40 years, the number of operational Royal Australian Navy submarines could fall to as few as three boats before replacement capabilities become available.

Recommendations to strengthen sovereign capability

The report proposes a series of reforms designed to transform naval shipbuilding from a collection of individual projects into a coordinated national enterprise.

Among its recommendations are:

• Adopting ship-design principles that prioritise capability, commonality and affordability over bespoke solutions.

• Expanding the use of spiral and batch development approaches to deliver continuous improvement across classes.

• Establishing greater systems commonality between naval platforms to reduce complexity and workforce demands.

• Introducing a minimum 70% local build requirement, measured against the Commonwealth selling price, to strengthen Australian industry participation and reduce exposure to international supply-chain disruption.

• Creating a sovereign naval enterprise board comprising government and industry leaders, with authority to oversee program integration, planning and assurance.

• Expanding the use of open-book contracting and target-cost incentive arrangements to improve transparency and reward efficient delivery.

• Establishing an east coast manufacturing hub to support construction of the Hunter, Mogami and SSN-AUKUS programs.

• Developing a strategic shipbuilding partnership with Japan by 2030 to support the future replacement of the Hobart-class destroyers and Canberra-class amphibious assault ships.

Prof Jones and Dr Shackleton say Australia has demonstrated its ability to build sophisticated warships domestically but maintaining that capability will require a continuous and disciplined national effort.

"Deterrence by denial will remain little more than a slogan unless Australia's maritime ambitions are supported by continuous, stable shipbuilding programs," Professor Jones said.

"Australia has proven it can construct advanced warships to world-class standards. The challenge now is ensuring this historic investment generates an enduring sovereign capability, rather than another cycle of expansion followed by contraction," Dr Shackleton said.

The report, Building a Strong and Sustainable Fleet is available for download here.