Australia To Spend An ‘Astronomical’ $368B For ‘Second-Hand’ Nuclear Submarines; Experts Slam ‘Trillion Dollar’ Debt Deal

More than a year after the AUKUS pact was signed on September 2021, the US, UK, and Australia have finally revealed details of their plan to build a new fleet of nuclear-powered submarines for Australia. The price, however, is astronomical.

A defense official told the media on March 14 Australia’s nuclear-powered submarine program with the US and UK might cost up to A$368 billion ($245 billion) over the next three decades. This will make it the largest single-defense project in Australian history.

In what has been touted as a significant move to confront China’s naval buildup in the Indo-Pacific, British Prime Minister Rishi Sunak, Australian Prime Minister Anthony Albanese, and US President Joe Biden disclosed details of a proposal to supply Australia with nuclear-powered attack submarines.

In the early part of the next decade, the Australian government will acquire three Virginia-class submarines, possibly used ones. This decision is subject to US Congress approval. The historic AUKUS defense and security contract will also reportedly include an option to buy two more.

The move was not completely surprising for military watchers as there were reports throughout 2022 that Canberra would buy the US Virginia-class or UK Astute-class submarines.

Further, in June last year, US lawmakers introduced a bill called the ‘Australia-US Submarine Officer Pipeline Act’ to train Royal Australian Navy officers in the operation of nuclear submarines.

File Image: USS West Virginia Submarine: Via US CENTCOM

According to the latest plan forged by the AUKUS allies, the British work to replace their Astute-class submarines will be “leveraged” to continue design and development work on a brand-new submarine known as the SSN-AUKUS.

That submarine, which will eventually be operated by the UK and Australia employing US combat systems, will be referred to as the AUKUS class. From the early 2040s through the late 2050s, one submarine will be manufactured every two years, and the Royal Australian Navy will get five SSN-AUKUS boats by the mid-2050s.

Astute-class submarine - Wikipedia
Astute-class submarine – Wikipedia

Eight Australian submarines built in Adelaide would eventually make up the fleet until the 2060s. The federal government reserves the right to acquire some from British shipyards if strategic circumstances alter.

The Submarine Rotational Forces West, comprised of four US and one UK submarine, will begin rotating through Western Australia as early as 2027. A decision has not yet been made about a future submarine facility on the east coast, while Port Kembla has solidified as the most likely site. Work on this site will also cause additional dollars for Australia.

Although the plan appears consistent with the threat posed by the Chinese military buildup, the cost of the nuclear submarine has caught the most attention. As soon as the news about the program started to trickle in, military experts and netizens were divided on the enormous costs.

Image for Representation

Australia’s Submarine Acquisition Is A Costly Affair

The federal government estimates the cost of the submarine program will be between $268 billion and $368 billion over the next 30 years. Out of this, at least $8 billion will go towards modernizing the naval facility HMAS Stirling in Western Australia and $2 billion over the next four years upgrading the Osborne shipyards in South Australia.

Australia will also provide $3 billion over the next four years to production lines in the US and the UK as part of its financial commitment, with the US receiving the majority of the funding for improvement.

Justin Bassi of the Australian Strategic Policy Institute claimed the program’s cost would be “eye-watering.” However, he added, “The alternative is an even higher cost to Australia’s security and sovereignty down the track.” Bassi was referring to the security risk posed to Australian security by China.

EurAsian Times had extensively reported on the security agreement signed between China and Solomon Islands and the risk it purportedly poses to Australian security. Further, China’s widespread expansion in the Pacific Island region, which Australia considers its traditional bastion, is alarming for Canberra.

The Australian government admits that the price is high, but it maintains that the nuclear submarine will differ from previous defense projects that have run over budget and schedule.

Aukus allies unveil plan to supply Australia with nuclear-powered submarines | Financial Times

“[Firstly,] we announced very significant reforms to the procurement in October that will contribute to the performance of Defense,” Defense Industry Minister Pat Conroy said, according to an ABC News report.

“Secondly, as part of the announcement, we’ve announced a dedicated agency that will provide a laser-like focus on delivering the project. “[Thirdly,] we’ve actually learned the lessons from past procure amendments, particularly [with] the Collins class.”

The former Defense Minister of Australia, Peter Dutton, hit out at the Albanese government over cost overruns. Dutton said Labor’s claim that the AUKUS nuclear submarine proposal is cost-neutral over four years is “not credible” and that the Albanese government is getting ready to “cannibalize” other projects with the $3 billion in defense cuts necessary to pay for the plan.

There has been significant dissonance on the issue of the high cost of the acquisition of nuclear submarines. Some netizens said on Twitter that the cost was very high for “second-hand” submarines.

A renowned Australian journalist Peter Cronau said on Twitter, “The full cost is blowing out already—$200b has turned into $368b. And that’s just the subs. Yet to be announced are costs of new missile launchers in Australia, new airports for US B-52s—& nuclear bunkers for Alice Springs residents.”

A former Australian submariner and military observer, Rex Patrick, wrote on his blog, “Australia has 970 billion dollars in gross debt. It will rise to a trillion dollars next financial year. Albanese says that our Defense budget will increase to 2.5% of GDP. That’s an extra $10 billion per annum, on top of a structural deficit of $50 billion yearly, already rising to $70 billion.

“With Stage 3 tax cuts set to kick in next year, and revenue from coal and gas exports likely to decrease, it hard to work out how AUKUS will be paid for, other than by spending cuts.”

Several other Australian citizens joined this bandwagon and lamented that the deal would be profitable to the US Navy instead of serving any real purpose for Australian security. Ordinary citizens took to Twitter to express their disenchantment with the decision that will weigh heavily on taxpayers.

Australian f-35
File Image: Australian F-35

The concerns about high costs are not just limited to nuclear submarines. Earlier, the government faced flak related to high acquisition and maintenance costs incurred due to the decision to buy F-35A stealth combat jets from the United States-based Lockheed Martin.

In April 2022, Air Vice-Marshal Leon Phillips, head of the Aerospace Systems Division, informed the Australian parliament’s Foreign Affairs, Defense and Trade Legislation Committee that the government expects to spend a whopping AUD14.6 billion ($10.87 billion) to sustain its Lockheed Martin F-35A Lightning II fleet till 2053.

Later that year, a senior Australian journalist, Brian Toohey, who has been writing extensively for Australia’s national security policy since 1973, questioned the ‘Defense Policy Review’ of the Australian government that was believed to be advocating the purchase of the fourth squadron of F-35 fighter fighters.

Toohey argued that Australia “should be asking for a refund” and that “the worst mistake was to buy the fighter in the first place” while pointing out the long history of expensive difficulties with the F-35s already purchased.

Against that backdrop, the astronomical cost could trigger a storm inside the country despite the arguments about national security cited by the Anthony Albanese government.

On its part, even the Chinese analysts had warned Australia in the run-up to the announcement saying, “Australia is “planting a time bomb” for its peace and that of the region, and it would bear the cost of the “expensive mistake” of following the US.”