Australia ‘paying its way’ with $800m AUKUS deposit, says Richard Marles

Australia has made its first AUKUS down payment to the US as the Albanese government looks to lock-in Trump administration support for the submarine program.

The Virginia-class attack submarine USS Montana. Picture: US Navy

Australia has made its first AUKUS down payment to the US, transferring nearly $800m to help boost the country’s submarine production as the Albanese government looks to lock-in Trump administration support for the key defence initiative.

Defence Minister Richard Marles revealed the $US500m payment ahead of a meeting with his new US counterpart Pete Hegseth in Washington DC, declaring Australia was “paying its way” under the AUKUS pact.

The taxpayers’ funds are part of a promised $US3bn ($4.8bn) package to strengthen the US submarine industry so it can supply three to five Virginia-class boats to Australia by the early 2030s.

The money was transferred after the Defence Minister’s call with Mr Hegseth last week – well ahead of the June 30 payment deadline.

Key members of the new Trump administration have expressed support for AUKUS, but Donald Trump is yet to publicly endorse the submarine deal and there are fears he might seek to renegotiate it.

The payment comes as American submarine production lags well behind where it needs to be for the US to supply its promised nuclear boats to Australia without undermining its own fleet.

Defence Minister Richard Marles on the phone to US Secretary of Defence Pete Hegseth on January 29. Picture: X

The Albanese government is also bracing for a Trump administration call to ramp up defence spending from the nation’s current 2 per cent of GDP, as the President piles pressure on US allies to lift their military budgets to 5 per cent of GDP.

Mr Marles said the first AUKUS payment was a “fair and equitable” contribution to the submarine plan, which is forecast to cost up to $368bn for the US-supplied submarines and a fleet of new AUKUS-class boats to be built in Adelaide.

“It is about Australia paying its way when it comes to AUKUS by helping to uplift the US submarine industrial base so that Virginia-class submarines are available to be transferred to Australia,” he said.

Mr Marles was due to meet Mr Hegseth on Saturday morning Australian time before laying a wreath with his counterpart at the Arlington National Cemetery to honour the sacrifice of America’s fallen soldiers.

They are expected to discuss the AUKUS pathway, Chinese security threats in the Indo-­Pacific, and the US’s expanding military presence in Australia.

It will be Mr Hegseth’s first face-to-face meeting with a foreign counterpart since his knife-edge confirmation by the US Senate late last month.

Vice-President JD Vance had to use his tie-breaking vote to secure Mr Hegseth in the role following allegations of sexual misconduct, financial mismanagement and public drunkenness against the former army officer and Fox News host.

US Secretary of Defence Pete Hegseth, right, welcomes Israeli Prime Minister Benjamin Netanyahu to the Pentagon. Picture: AFP

Mr Marles will also meet the heads of the Senate Armed Services Committee, Republican Jack Reed and Democrat Joe Courtney, whose ongoing support will be critical to the success of the AUKUS submarine program.

Mr Marles will be on the ground in Washington for only one full day before heading home to Australia to attend parliament next week. But the trip was seen as an essential one to burnish his relationship with Mr Hegseth, and the Albanese government’s standing with the wider Trump administration. Anthony Albanese is believed to have spoken to Mr Trump just once following his election win, and was at pains this week not to criticise the President’s widely condemned plan to “take over” Gaza.

Foreign Minister Penny Wong attended Mr Trump’s inauguration and met with new Secretary of State Marco Rubio, who said in his confirmation hearing that AUKUS would receive “very strong support” from the new administration.

He said the trilateral security partnership between Australia, the US and the UK was “almost a blueprint in many ways of how we can create consortium-like partnerships with nation states that are allied to us to confront some of these global challenges”.

A recent US Congressional Budget Office report confirmed the country’s submarine industry continues to build just one Virginia-class boat a year – well under the 2.3 a year needed for the US to meet its own needs and also fulfil its commitment to Australia.

The report said the US Navy’s “priority” program to build new Columbia-class ballistic missile submarines was behind schedule and could further delay Virginia-class production.

The AUKUS treaty allows the US and Britain to pull out of the deal with just one year’s notice if they decide it threatens their own nuclear submarine ­programs.