Australia Rethinking Military Drones -- Update

By Rob Taylor 

SYDNEY--Australia is rekindling its interest in military drones that can roam as far as North Asia--reversing a stance that the hardware was too expensive.

An announcement will likely be made this year, Australian Defense Minister David Johnston said in an interview. The conservative government plans to indicate its priorities for an annual 25.0 billion Australian dollar (US$22.4 billion) defense budget in its first strategic blueprint in 2015.

"Something that can leave Darwin and do a couple of laps of Sri Lanka and come home again--that is exactly what we need," Mr. Johnston said ahead of a speech in Sydney commemorating the nation's submarine fleet. Darwin is on Australia's northern coastline and home to a U.S. Marines camp and close to several oil and gas installations.

Ministers had put the U.S. Navy's MQ-4C Triton drone near the top of a defense shopping list last year but pressure for spending cuts because of the country's fading mining-investment boom doused interest.

"It's undeniable that that capacity, up at about 55,000 feet, unarmed, is right in the place that we need to pay attention to. It's almost a no-brainer," Mr. Johnston said. "I'm hoping in the course of this year that I'll have something to say about that."

Northrop Grumman Corp.'s Triton--about the size of a small airliner--costs around $100 million and can stay aloft for more than 30 hours.

The previous Labor government had wanted to purchase six to seven drones and associated equipment for about A$3 billion. Under that government, net military spending shrank to around 1.56% of gross domestic product--its lowest since 1938.

Mr. Johnston's comments may signal that his ministry might be spared major budget cuts, with the government prioritizing purchase of military equipment that could help Prime Minister Tony Abbott deliver on a promise to tighten border security and halt asylum boat arrivals from neighboring Indonesia.

The U.S. Navy is still testing the Triton, which carries a 360-degree radar and sensors including infrared and optical cameras, ahead of entering operational service in 2017. Unmanned aerial vehicles are central to Northrop's international sales push, and has been aided by the U.S. government loosening export restrictions on platforms such as Global Hawk and Triton.

"The unmanned arena is beginning to open up for us on an international basis," James Palmer, Northrop's chief financial officer, said at an industry conference in New York on Thursday. "The Australian government has been following the Triton's development to see whether or not that capability may meet their needs on a long-term basis."

U.S. defense contractors will have their largest-ever presence at the Singapore Airshow next week, lured by the prospect of a growing Asian market. According to an estimate by consultant Avascent, the region's defense market is valued at US$350 billion, excluding China, over the next five years.

Still, the prospect of an Asian-Pacific arms race is worrying diplomats. In congressional testimony Wednesday, the U.S. assistant secretary of state for the region, Daniel Russel, painted an alarming picture of the standoff between China and Japan over a contested group of islands in the East China Sea. noting there had been "an unprecedented spike in risky activity" by Chinese maritime agencies.

To Mr. Johnston, more Chinese involvement in regional military exercises could be a way of lowering tensions between Japan and its bigger neighbor.

Three of China's newest and most powerful naval vessels patrolled south of Indonesia's Java Island--facing Australia's north--for the first time last week during a rare foray into the Indian Ocean that raised security eyebrows in Canberra, which is itself engaged in a US$90 billion buildup of military capability.

"I'm relaxed," Mr. Johnston said. "I think there's a lot of over negativity about that sort of thing. Let's be open and transparent and let's engage the neighborhood."

Growing trade tie-ups between regional countries would inevitably work to lower tensions, Mr. Johnston said, along with a steady widening of political forums where diplomatic sensitivities can be discussed. Australia is already negotiating a free-trade pact with China, its biggest trade partner, and will soon complete another with Japan. The country secured a free-trade agreement with South Korea in December.

"Nobody wants to see military action of any sort undermining the economic success of the region," Mr. Johnston said. "Everybody has skin in the game."

Doug Cameron in Chicago contributed to this article.

Write to Rob Taylor at [e-mail]

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