If AUKUS were NDIS? Rising cost of elusive subs submerged in budget
· Michael West
The price of the AUKUS submarine program is rising while the chances of subs being delivered is going down. Rex Patrick on the Budget subs spending.
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It’s quite hard, indeed impossible, to work out how much the AUKUS submarine program is costing the taxpayer, with few details and much hidden across multiple budgets.
We’ll start with the operation of the Australian Submarine Agency (ASA). The total appropriation to run ASA over the next four years (FY 2026-27 and forward estimates) is $2.35B, which is up from last year’s budget and forward estimates at $1.71B.
That’s a $37% increase.
If ASA were the NDIS, the Government would have announced fundamental cuts “to secure its future, so it grows in a sustainable way”.
Budget Position Comparison (Source: Defence Budget)
But there are a number of additional costs spread across other budgets – with no breakdown specifically to AUKUS. For instance, the cost of running the Australian Federal Police’s AUKUS protective security command, as revealed by MWM earlier this year.
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Added to that is the cost of the Australian Nuclear Science and technology Organisation’s (ANSTO) provision of expert advice, the Australian Radioactive Protection and Nuclear Safety Agency’s (ARPANSA) provision of safety research, advice and codes and standards.
The Attorney-General is spending money on legal services to ensure AUKUS is complying with Australia’s nuclear non-proliferation obligations, while the Department of Foreign Affairs and Trade is spending $43m this year and $44m next year on diplomacy to try to convince the International Atomic Energy Agency to declare the AUKUS program is compliant with Australia’s Comprehensive (Nuclear) Safeguards Agreement.
Funding is also being thrown at the Department of Industry, Science and Resources, the Department of Education, the Department of Employment and Workplace Relations, the new National Environment Protection Agency and the Department of Finance,
almost everyone’s getting a piece of the action.
Program advancement
More money being set aside for the actual delivery of the capability, with the total amount of money spent on gone from $2.9B in 2024-25 to $8.2B in 2025-26. A lot of that new expenditure has gone to the US and UK for to employ Americans and Brits, and to improve their shipyards.
By June 2027 we will have spent $11B on AUKUS without so much as a periscope to show for it.
Defence is spending money as quickly as they can, faster than they and the government have told the public they would. It might be they have learned something from the French Attack Class program, which was cancelled by Scott Morrison after burning $4B in taxpayers’ money; the lesson being that $4B in sunk cost is not enough to prevent a program from being terminated.
By the end of next year Defence will have spent more than $13B. Surely no government would cancel a program after spending that much money!
On the submarine construction and support infrastructure front, the Government has been keen to announce billions upon billions of dollars in expenditure on submarine facilities, but then put budgets amounts of ‘not for publication’ in the budget documents; Announcements good … budget details bad!
No subs for us…
One of the few nice things about the US system of government is that Congress is a totally separate arm of government to the executive.
The US Congress appropriates all money to government (as is the case in Australia), but because Secretaries (our equivalent of ministers) don’t sit in the Congress, they force Agencies to disclose a lot more details in their budgets.
In our budget documents we get one column in a table to explain the procurement of Virginia Class nuclear powered submarines; in the US Defense budget document there are 20 pages.
In our budget documents there is no indication of when the Royal Australian Navy will get a Virginia Class submarine. In the US Defense Budget document, every Virginia sub delivery date is specified, to the month.
US Virginia Class Submarine Deliveries (Source: Defense Budget)
What the US Defense budget papers do tell, apart from delivery dates, is that the best the US is hoping for is a submarine delivery rate of 1.7 boats per annum over the next decade, which is short of the 2 boats per annum necessary to meet their needs, let alone Australia’s.
US law states that their Navy cannot transfer a submarine to Australia if it would adversely affect their own undersea warfare capability.
No submarines are coming to Australia from the US, despite the billions we’re spending.
The delivery of AUKUS SSN subs from the UK, according to a new UK Parliamentary report, is not likely to happen either, yet The Dept of Defence spends onwards, with hope being their primary procurement risk mitigation strategy.
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No retirement for Collins
In 2009 the Rudd Government announced we were going to get 12 new submarines to replace our 6 Collins Class subs that were due to retire in 2025. However, they can’t be retired because
Defence has delivered absolutely zero subs to the Navy in those 17 years.
And so this year we’ll spend $921m on keeping our Collin subs at sea. That’s down on the $1B spent last year, but is grossly expensive compared to other submarine forces around the world. As anyone who tries to keep an old car on the road, with no source of spare parts, knows, it’s expensive.
And the annual costs of keeping the subs at sea doesn’t include a Life of Type Extension (LOTE) to try to deal with obsolescence. That is a separate program which has cost the taxpayer $519m so far, and will cost us another $262m over the next 12 months. The total outlay for the LOTE could reach $11B.
And if the cost spent on not much capability isn’t enough, the potential cost of nuclear waste storage may run into hundreds of billions. At least that won’t happen if the subs don’t appear…
Where are the AUKUS nuclear waste costings (let alone the dump sites)?