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Stephen Grenville

The economic case for building nuclear subs offshore not in Adelaide

There is no point in strengthening our defence industry if we weaken the overall economy by doing so inefficiently.

In the fracas that accompanied the cancellation of the French submarine contract, one important issue was elided: where the AUKUS submarines would be built. Even before the type of submarine has been decided, both major political parties committed to build the submarines in Adelaide, with an open-ended promise to maximise Australian content.

Nuclear submarines are not only a different technological proposition from the French submarines, but a vastly larger undertaking. This decision cannot sensibly be based simply on the idea that it would be nice to have a domestic high-tech industry.

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Stephen Grenville is a former deputy governor of the Reserve Bank of Australia and a non-resident fellow of the Lowy Institute.

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    Original URL: https://www.afr.com/policy/foreign-affairs/the-economic-case-for-building-nuclear-subs-offshore-not-in-adelaide-20230305-p5cpgs