Spending on the AUKUS submarine program is growing so dramatically that it is approaching the size of a standalone branch of the Defence Force, draining funding for other military equipment, a group of the nation’s top defence experts has warned.
As Opposition Leader Peter Dutton prepares to announce the Coalition’s defence spending policy, the experts warn the Australian military is becoming dangerously dependent on the United States and should start hedging its bets to prepare for a more self-interested and less reliable ally under President Donald Trump.
Military experts are concerned that Australia’s move to acquire Virginia-class submarines is distorting the defence budget.Credit: AP
The report by the Strategic Analysis Australia think tank finds that despite the first nuclear-powered submarine not expected to arrive in Australia until 2032, AUKUS is already significantly distorting the defence budget.
In particular, the authors find the Royal Australian Air Force is in the “dog house” despite being arguably the best performing and most potent branch of the defence force.
Over the next four years, the nuclear-powered submarine program is projected to cost $17.3 billion, outstripping the RAAF’s capital budget of $12.7 billion, which excludes staff and sustainment costs.
“The discrepancy is made even more stark when we consider that Defence hasn’t even started to spend on any actual submarines, while air projects are in the middle of delivering MC-55 electronic warfare aircraft, MQ-4 Triton uncrewed aerial vehicles, long-range strike missiles, guided bombs, air-to-air missiles, and so on,” leading defence economist Marcus Hellyer writes in the report.
“It seems reasonable then to describe the [nuclear-powered submarine] enterprise as the ADF’s fourth service, at least in terms of its acquisition spending … It’s hard to grasp how unusual this situation is.”
Arguing that “submarines clearly exercise a strange hold over our collective imaginations”, Hellyer finds that the total cost of the nuclear-powered submarine program – including personnel and sustainment – could eventually rival that of the three branches of the military: the navy, air force and army.
The report finds the AUKUS submarine program is likely to cost $10 billion a year within a decade, the same as the current annual budget for the entire air force.
The authors, all of whom formerly worked for the Australian Strategic Policy Institute, call for defence spending to be put on a rapid trajectory to reach 3 per cent of gross domestic product within the next term of government, taking defence spending from the current $56 billion annually to $84 billion a year.
Credit: Matt Golding
“Australia has no credible argument for continuing to devote such a low share of our national wealth to meeting our security needs, particularly as we now plan to not just have the conventionally equipped military that we’ve maintained for decades but now want to add enormously expensive nuclear-powered submarines into our order of battle,” former Defence official Michael Shoebridge writes in the report funded by defence firms, including Boeing.
The authors acknowledge it would be challenging for the defence force to ramp up spending so quickly given it has missed its acquisition spending targets by a total of $26 billion over the past decade, meaning promised capabilities have not been delivered.
The Coalition has been mulling increasing defence spending to 2.5 per cent of GDP and has promised to spend $3 billion to buy 28 additional F-35 joint strike fighter jets.
Labor has vowed to lift defence spending from the current 2 per cent of GDP to 2.33 per cent by 2033-34.
Shoebridge argues that Australian defence policy has to be fundamentally rethought because “America is no longer signed up to defending the global rules-based order and has little interest in helping its partners and allies to maintain a free and open Indo-Pacific”.
Australia should be prepared for the Trump administration to demand payment for joint military and intelligence facilities in Australia – including the secretive Pine Gap intelligence facility – and to seek to renegotiate the AUKUS pact to extract more money from Australia, he writes.
The authors find that 19 of the defence force’s 30 biggest planned acquisitions are set to come from the US, a risky trend given it is becoming a less reliable security partner under Trump.
“Ultimately, we need to hedge our risks and diversify our defence suppliers, in particular local ones,” the authors write.
The report comes as a separate paper by former air force chief Geoff Brown argues that the RAAF should urgently acquire a long-range bomber capable of striking deep into the Indo-Pacific to address a “glaring” capability gap.
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