All the money, none of the submarines: AUKUS deal paying upfront for hopes and dreams

When Kerry Packer bought Channel 9 back from Allan Bond for effectively half the price Bond had sold it to him, Packer famously said “You only get one Alan Bond in your lifetime, and I’ve had mine”. For the United States and the UK, the AUKUS agreement is one where they only get one Australia, but the country pays over and over again.

The AUKUS agreement is so absurd that it seems laughable one Australian government would sign up to it, but for two governments to be so reckless, strains credulity beyond breaking point.

And yet here we are.

Consider this deal – a property developer sells you an apartment. They have already sold it to someone else, but if they happen to build more than they expect, then you can have it… so long as you pay money up front. Whether you get the apartment or not, the property developer keeps all the money.

And then you still sign and pay all the money.

Too unbelievable? Try this then.

Another property developer tells you they have plans to build a new style of apartment. They will be flashy and have lots of new technology. Problem is they are not sure if they can build them and want you to fund some new cranes and trucks in the meantime. But even if they don’t manage to build the apartment, then they keep the money.

Not only do you sign, you ditch the contract and lose the deposit you already had to buy a cheaper apartment.

Insane? Welcome to AUKUS.

Scott Morrison not only agreed to all this, Richard Marles and Anthony Albanese thought, yeah that sounds good.

First, we scrapped an agreement we had with France for them to sell us their Barracuda class submarines. Ending the contract cost $835m to do.

For AUKUS to happen, the UK needs to design a new type of nuclear submarine – the SSN-AUKUS class. At least five would be built in South Australia. And Australia is meant to get hold of them in the early 2040s.

Has construction started yet? Oh, god no. Can the UK manufacturing industry actually design and build these new submarines? Oh, my sweet summer child.

Late last year, retired UK Rear Admiral and former Ministry of Defence nuclear-policy director, Philip Mathias, noted that Britain is “no longer capable” of running a nuclear submarine programme. Earlier this month he told Nine newspapers “policy and money don’t build nuclear submarines. People do that and there are not enough of them with the right level of skills and experience.”

Not to worry, Australia is sending $4.6 billion to Rolls Royce in the UK over 10 years to help “clear bottlenecks” with its nuclear reactor production line. So that’s nice.

The other part of the AUKUS deal is for the United States to sell Australia three (or possibly five) Virginia Class submarines in the 2030s.

The catch is this only happens if the US has a surplus of submarines.

Do they have a surplus? Well, no, they have a shortage.

To reach a point where they will have enough submarines to sell us three or five of them, the US needs to build 2.33 boats per year because it already has a backlog of submarines to build for the US navy.

Big problem though, the Congressional Research Office noted, “the actual Virginia-class production rate has never reached 2.0 boats per year, and since 2022 has been limited to about 1.2 boats per year.”

So, we need the US to double production for the next decade and then still hope they decide they have more than they need.

But not to worry, the Australian Government is sending money to America to help out. In December the US Secretary of War, Pete Hegseth told reporters “we applaud Australia’s upcoming delivery of an additional $1 billion to help expand US submarine production capacity.”

That was on top of the $1.6 billion we have already sent to the US to help build their submarines in the hope that in 10 years they might have some spare.

And just remember, if the SSN-AUKUS subs are not built, we don’t get the money back. If the US decides it doesn’t have enough spare submarines to sell Australia, we don’t get the money back.

And it is not as though there are no other uses for that money. Just last week, there were reports of maggots raining down on patients in a hospital in Newcastle. Could the health system use an extra $2.6bn? What about schools? Aged care?

Instead, the Government has decided to send money to the UK and US to help their manufacturing industries in return for hopes and dreams, and no guarantee of any submarines.

And remember those Barracuda submarines that we were going to get from France? The latest report is that their production is a year ahead of schedule.

You would think that might spur a government devoted to economic management to hold an inquiry in AUKUS to make sure they are getting value for money.

But then that would involve a lot of questions – and AUKUS provides no good answers.