Australian money is flushing into the US submarine construction system – a billion USD so far, with another billion by year’s end. And what will Australia have to show for it? Nothing.
Mon 15 Sep 2025 00.00 AEST
Photo: AAP Image/Trevor Collens
So far, the only explanation for totally unsecured payments to the US is our need to contribute to America’s submarine-building capacity so that, at some date that seems to be sliding ineluctably further away, we are able to buy some Virginia-class submarines and embark on our adventure as a nuclear-powered submarine navy. Right now, the US yards cannot meet the demands of the US Navy, let alone ours. They need to double their production rate.
And, by the way, we want to be able to build our own nuclear submarines. But instead of investing in our own yards, we think it’s smart to invest in American ones. It takes a special form of cleverness to think that up.
So funneling money into the American shipyards is like handing out cash to a property developer who’s finding that the cashflow doesn’t meet the construction schedule: it does nothing to improve our chances of securing our own dwelling on time, if at all. If you think that looks smart, you’re certainly not in the market for a house, or, if you are, you’re going to be disappointed. And as for the developer, he’s sure to get his money even if the creditors are worried. It’s no wonder that the US Navy is beginning to doubt the “viability” of the Australian acquisition.
Is it any wonder that the US is now reviewing the AUKUS agreement to assess its impact on the capability and readiness of the USN’s submarine arm? It is difficult to imagine that there is anyone in the US government or in the Pentagon who would lay a wager against President Trump vetoing the entire “Sleepy Joe” deal on a whim. Trump is no particular fan of Australia, or of anyone else for that matter.
Prudent Australian planning would already have identified an alternative and more reliable way of meeting our need for reliable submarines. Unfortunately, there is no sign that such alternative approaches have even been considered.
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And while we’re supporting the US submarine construction program at our expense, we’re hedging our bets by investing in an entirely new design of the British-Australian AUKUS-SSNR. This is a kind of castle in Spain that exists only in the minds of submarine designers and constructors who have yet to complete their own attack submarine (called Astute, in a remarkable example of Humpty-Dumpty language) that’s been running for over forty years. This has been exacerbated by the fact that their ballistic missile submarines (called Vanguard, reminiscent of one of the least successful products of the British automotive industry) are in real trouble.
Punters who cover their risks by betting on outsiders rarely succeed – something that the Audit Office might draw to the Government’s attention.
Over-budget and late is a characteristic of the British naval construction industry, as indeed it has been a feature of Australia’s naval acquisition. Yet we seem to have fallen for the slick marketing of UK Prime Ministers and Defence Ministers, even though we find it difficult even to remember who they were. And just a few weeks ago, the UK Defence Minister was at it again, spruiking a fifty-year agreement that neither he nor his Australian counterparts are likely to live long enough to see come to fruition.
Just as UK Prime Minister Liz Truss couldn’t outlast a wilting lettuce, it is hard to see how this agreement can survive, much less accommodate, the strategic forces that underlie the disruption through which the world community is currently living.
The Morrison and Albanese Governments have at no stage put a cogent case for nuclear-powered submarines. What started as political theatre in the lead-up to the 2022 election – all fanfare, no procession – has left Australia chasing a dream. It is a dream that concentrates on a propulsion system, nuclear reactors, rather than focusing on need, submarines that Australian can credibly construct and operate in the direct defence of Australia. With the Collins class, we proved that we could do it. With the AUKUS fiction, we risk proving that dreams consume reality, with the consequence that we will have nothing for our investment.
Churchill famously described Russia as a riddle wrapped in a mystery inside an enigma. The AUKUS submarine is beginning to look like a chimera masquerading as a dream inside a fantasy.
Allan Behm is Advisor, International & Security Affairs Program at the Australia Institute.
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