The outgoing Chief of Navy, Vice Admiral David Shackleton, left the service with an upbeat speech, predicting big ships to replace those currently in Service.

He conceded that on occasions in his 36-year career, that sailors had saved him from himself.

And he said he'd like to give everyone in the Navy an all-expenses paid holiday.

VADM Shackleton made it plain, before he was piped on board HMAS Warramunga, for a tour of Sydney Harbour, that:

• Operational commitments since September 11 last in Operations Slipper and Relex had cumulatively placed great stress on Navy's ability to meet the mission set it by Government;

• The work of members of the RAN both individually and collectively was held in highest esteem nationally and beyond;

• Support of families is vital to Navy meeting its commitments; and

• The success enjoyed so far was a team effort depending on effective leadership and the sum of the efforts of a number of smaller teams.

Recalling the start of his tenure as Chief of Navy, Admiral Shackleton said that his first message was that it was crucial for the Service to gain the trust of all Australians that the Navy would serve them well in all it did.

"We have done that," he said. "You should feel justifiably proud that what you do is held in the very highest esteem. As sailors, we serve our country to the very best of our ability. We will go wherever we have to, we will do whatever it takes, for as long as it takes."

The retiring Chief said the Navy's future looked promising on many fronts. Because of the Navy's 'demonstrated high performance' the Navy's public approval rating was at the highest it had been for many years.

"The Government was committed to modern air warfare destroyers," he said. "I see them being about twice the size of the DDGs with a crew about that of an ANZAC.

"Tobruk, Manoora and Kanimbla will be replaced. I see (the replacements) being much larger than our present ships. The Army truly has a lot of stuff to be shifted, delivered, protected and supported. Both our tankers will be replaced. Our patrol boats will be replaced in a few years.

"Our submarines are amongst the world's best. Our mine warfare and diving capabilities are excellent. Our hydrographers are engaged in operations in ways that we didn't think possible a year ago.

"None of this has come about by the Navy expecting charity from the government. We have had to work hard to explain the complexity of maritime power and the centrality of a navy in that equation, and why it costs nearly $6 billion each year to do these things. While what we do looks easy on television, in effect it takes a world-class effort by world-class people to achieve it all. And, just as importantly, to keep on achieving it."

Admiral Shackleton also described the 'enormous challenge' facing the Navy of the future.

"The events of last September have lead to a major commitment by Navy in the Persian Gulf," he said. "The level of effort we have had to put in to ensure that Relex and Slipper are effective, and do other tasks, has cumulatively placed great stress on our ability to meet our mission set by Government.

"The Navy is on watch. This is why Australia has a navy. It must pay attention to all the professional matters that only the Navy really understands to keep that watch.

"Being on operations is not the same as working to a practice program. There are operational changes that must be adapted to, and it is simply not possible to plan for every option that may arise.

"Our traditional approaches to seeking flexibility and being able to adapt on the run are critical success factors for us. Institutions that cannot adapt are inevitably going to lose.

"Being on operations not only affects the sea going elements of the Navy. Navy headquarters and Systems Command are also fully focussed on ensuring that they play their part in ensuring that we have the tools we need, when we need them, to do the bidding of the Government."

Admiral Shackleton said people 'right across the Navy -- and in every other facet of Defence both service and civilians -- were also putting in hours that they would not have in the past to ensure that Navy can 'keep a good watch'.

"This is a huge team effort," he said. "Teams need good captains. Good captains are good leaders. I am not talking about Admirals and captains of ships. I am talking about every element of our Navy and the broader organisation that contributes to our performance.

"The Navy is a very large team, made up of many other teams, some large, some small. Good leadership is needed everywhere. Some of the best leaders I have ever met have been sailors.

"Given that it has been my own experience to have done most things the hard way, I can vouch for the fact that more than one sailor has saved me from myself on more than one occasion.

"There is no doubt that the Navy is working as hard now as it has ever done since it was formed in 1901. It is testimony to the people of the Navy that the people of today are every bit as professional and tough as their forefathers were. The quality of the men and women we have entering through our training schools is just outstanding."

Admiral Shackleton offered all Navy personnel personal thanks for their hard work and efforts over the three years of his stewardship at the top. They had worked hard to achieve outstanding results during a period of significant change.

However, he offered them all a final challenge: to leave the Navy a better place for the next generation as their forebears had done for them.

"Chiefs of Navy come and go, officers and sailors come and go, but the Navy is forever," he said. "We must all leave it a better place for our successors.

"It would be nice to say that I could reward you all by sending you on an all expenses paid holiday to a place of your choice. For myself, I always wanted to run out of fuel in Tahiti. But the reality is that I can't.

"But as the Chief of Navy what I can do, is give you all, a huge personal thankyou.

"Thank you all. And God bless," he said.

By Andrew Stackpool with Antony Underwood