AUKUS: Australia plugs $368b into capability gap

Joseph Brookes
Senior Reporter

Australia will acquire up to five US nuclear powered submarines while a new fleet is built based on a British design, the Prime Minister confirmed Tuesday morning, officially ending the first phase of the AUKUS security pact 18 months after it was announced.

The project will cost up to $368 billion over the next 30 years, with Australia making a “significant contribution” to US shipyards.

Anthony Albanese said the submarine program will support 20,000 local jobs and deliver a new era in Australian defence capabilities.

Three US made, potentially second-hand Virginia class submarines will be bought by Australia for operation by the early 2030s, pending approval by US Congress. There is an option to acquire another two of the American submarines.

The Virginia subs will plug a capability gap until Australia or the UK can deliver new SSN-AUKUS submarines that are based on a British design with American weapons systems.

Prime Minister Albanese, US President Joe Biden, and British Prime Minister Rishi Sunak unveiled the “optimal pathway” in San Diego on Tuesday morning.

Australia will acquire up to five US Virginia Class submarines under AUKUS. Image: US Navy

The federal government is aiming to build all eight of its new SSN-AUKUS boats in Adelaide but has left open the possibility of acquiring some from British shipyards.

The submarines bought from the US are expected to be operational by the 2030s, with the Australian built replacements operational by the following decade.

$8 billion will be spent upgrading the naval base HMAS Stirling in Western Australia. Port Kembla south of Sydney is reportedly the preferred location for a future nuclear-powered submarine base, but this was not confirmed in Tuesday’s announcement.

Upgrades to the a shipyard in Osborne, South Australia, are slated to begin this year, with construction on the SSN-AUKUS not expected this decade.

“We are also proud to partner with the United Kingdom to construct the next generation submarine, to be called SSN-AUKUS, Prime Minister Albanese said at the announcement ceremony in San Diego. “A new, conventionally-armed, nuclear-powered, submarine – based on a British design, and incorporating cutting edge Australian, UK and US technologies.

“This will be an Australian sovereign capability – built by Australians, commanded by the Royal Australian Navy and sustained by Australians in Australian shipyards – with construction to begin within this decade,” Mr Albanese said.

Tuesday’s announcement is the result of an 18-month nuclear-powered submarine taskforce, involving dozens of officials overseen by Vice Admiral Jonathan Mead.

The taskforce was established in September 2021 when AUKUS was publicly announced by the three nations in response to China’s military buildup.

Building the submarines locally based on an information sharing agreement with the US was the federal government’s  “preference” since AUKUS was announced in 2021 by the former Coalition government. Australian science and industry leaders welcomed the agreement as a massive innovation opportunity.

But the long time frames for the platform and comments by defence officials and the government have cast doubt on how big a role the local industry will eventually play.

The AUKUS submarine project had been estimated by analysts to cost $170 billion but on Tuesday it was revealed the federal government expects the bill to be anywhere between $268 billion and $368 billion over the next 30 years.

The AUKUS agreement also includes commitments to jointly develop eight other technological capabilities, like quantum, cyber, hypersonics, electronic warfare and innovation.

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