AUKUS submarine deal: Prime Minister Anthony Albanese to make public huge cost

The multi-billion dollar bill for Australia's nuclear-powered submarines will be made public by Prime Minister Anthony Albanese as he lines up a budget that also factors in unforeseen costs.

Worst case scenario contingency costs for Australia’s multi-billion dollar acquisition of nuclear-powered submarines will be made public to increase transparency around the historic AUKUS pact.

It is understood the budget for the massive Defence investment to be unveiled on Tuesday will not only outline the dollar-figure cost over the four years of forward estimates, but also for the next decade as well as a total percentage of GDP over the life of the project.

On Sunday night, The Australian reported that the nation’s nuclear submarine plan is expected to cost more than $200bn over three decades.

The newspaper also reported the mega project will create 20,000 direct Australian jobs and be overseen by a multi-agency body.

The federal government’s costings will likely also include additional estimates for “contingency” buffers accounting for unforeseen delays or issues over the multi-decade AUKUS project.

Anthony Albanese is expected to announce to final decision on the AUKUS submarines deal alongside US President Joe Biden and UK Prime Minister Rishi Sunak in San Diego, early Tuesday morning Australian time.

The local defence industry is expected to be called up to assist with the construction of up to five US-built Virginia-Class submarines – which cost about $3 billion each – in the 2030s.

Anthony Albanese landed in San Diego on Sunday ahead of the trilateral announcement at a naval base alongside US President Joe Biden and UK Prime Minister Rishi Sunak.

But the nation’s scientists are warning of a looming nuclear “skills crisis” with demand expected to soar as Australia moves to building its own fleet of new generation UK-US hybrid vessels later in the decade.

It can also be revealed a decision around an east coast base for the submarines – with candidates including the Port of Newcastle, Port Kembla near Wollongong and the Port of Brisbane – will not be unveiled at the San Diego announcement.

Instead the location of the new base will be finalised in the second half of 2023, informed by the government’s recently completed Defence Strategic Review.

The AUKUS decision is expected to include three key phases – the patrol of US Virginia-Class subs based out of Western Australia from 2027, then the purchase of at least three of this vessel in the 2030s, followed by the building of a new generation UK Astute-Class submarine using US weapons systems later in the decade.

Australia is looking to update its submarine fleet in the 2030s via this historic deal. Picture: Australian Defence Force via Getty Images

But it is understood local shipbuilding and defence industry businesses will have an opportunity to cash in on the AUKUS submarines deal in phase two, with the US likely to seek Australian assistance to sure up its supply chain as it constructs the Virginia-Class submarines.

US Congressman Joe Courtney, who is a member of the House Armed Services Committee, said on Sunday the AUKUS deal would help Australia develop its own skilled workforce needed to build the vessels.

Mr Courtney said “there is no question about it” that the US would need Australian help to build the Virginia-Class submarines.

“And we welcome it and we think it will benefit Australia in terms of really getting a workforce that will have the skill set to build its own subs,” he told ABC.

“That‘s what I think everyone really wants to see happen. We want this program to succeed.”

Australian Academy of Science President Professor Chennupati Jagadish said building the nation’s capability in nuclear science would be “central” to delivering on AUKUS.

“Nuclear science in Australia faces a skills crisis,” he said.

“We are significantly behind our peer nations in national nuclear and radiation science capability.

“Demand for nuclear scientists to meet existing workforce needs, let alone the national capacity to benefit from new developments in nuclear physics, is running well above supply and the capacity of existing universities to train sufficient scientists.”

Originally published as AUKUS submarine deal: Prime Minister Anthony Albanese to make public huge cost