AUKUS: Australia’s purchase of three US Virginia-class subs at risk after US Navy halves production

The sale of three Virginia-class nuclear submarines to Australia is in jeopardy after the US Navy made an unexpected move.

Supporters and critics of the AUKUS pact have blasted the US Navy’s decision to halve its planned submarine production next year, warning it could put Australia’s purchase of American nuclear-powered boats at risk.

As part of US President Joe Biden’s 2025 budget proposal, released on Monday (local time), the Navy revealed it would order one rather than two Virginia-class submarines in the next fiscal year, saving $US4bn amid a broader spending crunch.

But the Navy has already been unable to maintain the two-per-year pace and needs to speed up production to ensure its own fleet can withstand the sale of three Virginia-class submarines to Australia in the early 2030s.

These boats are supposed to be Australia’s first nuclear-powered submarines before the production of the SSN-AUKUS in South Australia.

Australia is supposed to be getting three Virginia-class nuclear subs under the AUKUS pact. Picture: Defence

Democrat congressman Joe Courtney, the influential co-chair of the congressional AUKUS caucus, said the Navy’s plan “makes little or no sense” especially given its submarine fleet was already 17 short of where it was supposed to be.

He pointed to warnings from shipbuilding unions that it would put a handbrake on efforts to bolster the submarine industrial base and speed up production.

“Given the new commitment the Department of Defence and Congress made last year to sell three submarines to our ally Australia, which I enthusiastically support, the ramifications of the Navy’s proposal will have a profound impact on both countries’ navies,” Mr Courtney said.

Australian Greens defence spokesman David Shoebridge also seized on the revelation, saying the failure was “almost too big to wrap your head around” as the Biden administration budgeted for “US needs but no one else”.

As part of US legislation passed last year to enable the submarine sale, the president at the time of the transfer would have to confirm it did not degrade America’s undersea capabilities, which Senator Shoebridge called a “kill switch”. He suggested “budgeting for one submarine all but guarantees” it would be pressed.

Congressman Joe Courtney, influential co-chair of the congressional AUKUS caucus. Picture: HUM Images/Universal Images Group via Getty Images

Australian Greens defence spokesman David Shoebridge. Picture: NCA NewsWire / Martin Ollman

In a briefing, the US Navy’s chief financial officer Mike McCord said it was a “management decision” given there were currently more than a dozen Virginia-class submarines on order with an average 30-month delay.

“The question was really, what can we do to get a better result other than keep doing the same thing and hoping for a different result,” he told reporters.

Under Secretary of the Navy Erik Raven also defended the move, saying the Navy was “not simply taking a submarine out” but instead acting “out of concern for the industrial base ability to produce yet one more, while in a capped environment making headroom for these historic investments in the submarine industrial base”.

Australia is investing $US3bn in America’s submarine industrial base as part of the AUKUS agreement, although a planned $US3.4bn spending boost by the Biden administration has been held up by a political fight over military support for Ukraine and Israel.

The Navy is promising to reach the two-per-year construction rate by 2028.

Mr Courtney vowed the Navy’s “hard rudder” would receive Congress’s “highest scrutiny”, with politicians able to adjust the proposal during the budget process.

A key factor in the Navy’s decision was a strict spending limit agreed by Mr Biden with House Republicans as part of a deal to raise the nation’s debt limit last year.

Deputy Prime Minister Richard Marles’s spokesperson AUKUS partners remain “steadfast”. Picture: Asanka Ratnayake/Getty Images

A year since Australia’s nuclear submarine plan was announced with the US and the UK, Deputy Prime Minister Richard Marles’s spokeswoman said the countries “remain steadfast in our commitment to the pathway announced last March”.

“All three AUKUS partners are working at pace to integrate our industrial base and to realise this historic initiative between our countries,” she said.

Originally published as AUKUS: Australia’s purchase of three US Virginia-class subs at risk after US Navy halves production