Prior to federation each self @-@ governing colony had operated its own naval force . These navies were small and lacked blue water capabilities , forcing the separate colonies to subsidise the cost of a British naval squadron in their waters for decades . The colonies maintained control over their respective navies until 1 March 1901 , when the Commonwealth Naval Force was created . This new force also lacked blue water capable ships , and ultimately did not lead to a change in Australian naval policy . In 1907 Prime Minister Alfred Deakin and Creswell , while attending the Imperial Conference in London , sought the British Government 's agreement to end the subsidy system and develop an Australian navy . The Admiralty rejected and resented the challenge , but suggested diplomatically that a small fleet of destroyers and submarines would be sufficient . Deakin was unimpressed , and in 1908 invited the American Great White Fleet to visit Australia . This visit fired public enthusiasm for a modern navy and in part led to the order of two 700 @-@ ton River @-@ class destroyers . The surge in German naval construction prompted the Admiralty to change their position however and the Royal Australian Navy was subsequently formed in 1911 , absorbing the Commonwealth Naval Force . On 4 October 1913 , the new fleet steamed through Sydney Heads , consisting of the battlecruiser HMAS Australia , three light cruisers , and three destroyers , while several other ships were still under construction . And as a consequence the navy entered the First World War as a formidable force .