Bring out the big guns in defence of AUKUS project

Three years after Scott Morrison announced AUKUS, stunning the nation with its audacity and scope, the passing of two milestones this month served only to raise doubts about the pact’s viability, cost and political longevity as the Biden presidency concludes.

The first milestone was the signing and tabling in federal parliament of a 50-year treaty governing naval nuclear propulsion co-operation central to the ambitious plan to acquire nuclear-powered submarines from the US and Britain. The second was an announcement by the US State Department that Australia, the US and Britain have comparable export control regimes, billed as an important first step in setting the rules of the road for AUKUS implementation.

Laudatory statements from supporters came thick and fast. The British government said the treaty was a “historical breakthrough”. Defence Minister Richard Marles characterised it as “a generational change” and claimed the new defence export rules would “revolutionise” defence trade, innovation and co-operation between the three countries. But an eclectic group of critics panned the treaty and AUKUS, revealing a worrying lack of domestic support for the agreement.

Some of these criticisms are ill-informed. Others reflect the prejudices of left-leaning activists reflexively suspicious of the US and defence spending. They are not for turning. But there are many legitimate concerns about AUKUS that the Albanese government has struggled to address. Its public advocacy for the project has been episodic, reactive and disjointed. We have yet to see a compelling speech, strategy or narrative selling the merits of AUKUS.

This failure of leadership, vision, messaging and political management is the greatest threat to AUKUS. If the government doesn’t make a more robust case for the agreement, critics will fill the gap and erode the social licence essential to its success.

If you doubt that, then look at the statement by Labor luminary and former prime minister Paul Keating to the National Press Club last year. He blasted AUKUS as the “worst deal in all history” and “the worst international decision” by a Labor government since Billy Hughes tried to introduce conscription. More recently, Keating has said the submarine pact was turning Australia into the “51st state” of the US by leaving the nation dangerously dependent on its closest security partner.

It’s easy to dismiss Keating as out of touch and out of mind. But he still commands a following. And he has an unmatched ability to capture media headlines, tapping into a rich vein of anti-Americanism coursing through the veins of Australian politics.

Greens defence spokesman David Shoebridge is not a household name. But the real possibility of a Labor minority government, dependent on the Greens for support, will make it much more difficult to keep AUKUS on track if Shoebridge has his way. He branded the treaty as an “irresponsible, one-sided” agreement and “the deal of the century for the US and UK”.

Many defence professionals also have reservations about AUKUS. Their concerns aren’t about the value of having nuclear-powered submarines or access to the crown jewels of US defence technology under pillar two of the agreement. They centre on whether the Americans can deliver the promised Virginia-class submarines because of pressures on their shrinking submarine force.

Although the US Navy has the world’s most lethal and stealthy submarines, they aren’t building enough to match the unprecedented expansion of China’s submarine fleet. The numerical decline in submarine production mirrors the deterioration of America’s defence industrial base, especially shipyards. The US needs to double submarine production to keep up with China.

If war breaks out between them in the Pacific as Washington fears, will the US be able to spare the three Virginia-class submarines earmarked for our navy? And are we sure that British shipyards can deliver on time, and on budget, fit-for-purpose SSN-AUKUS submarines that will be the mainstay of our fleet in the 2040s?

The tabling of the treaty in federal parliament reveals that the US and Britain have escape clauses that allow them to terminate their commitments to provide submarines to Australia if they are deemed to pose an “unreasonable risk” to their own defence needs.

Should these clauses be invoked, we could be left without a viable submarine force, seriously undermining our deterrent posture and defence capability. The nightmare scenario is the non-delivery, or delayed delivery, of both the American and British submarines.

These are valid concerns that Anthony Albanese and Marles must do more to address. They also need to push back against ill-informed criticism and make the case that AUKUS is critical to our defence capability, industrial base, alliance credentials and future economy. Motherhood statements and dismissive comments won’t suffice. The Prime Minister needs to personally reframe the AUKUS narrative by sketching a vision that Australians can unite behind.

He should start by making the point that AUKUS is a transformational, nation-building project that could rejuvenate the whole Australian economy, not just our submarine force, if prosecuted intelligently, strategically and with sustained purpose.

South Australian Premier Peter Malinauskas is the only Labor leader who fully grasps this. He says AUKUS is Australia’s “biggest industrial undertaking in the history of the federation” and a huge opportunity for the country. Business Council of Australia chief executive Bran Black echoes Malinauskas. Writing in this masthead, he warns we risk letting “our greatest industrial opportunity slip” without a “national wake-up call” that mobilises a “Team Australia effort”. Furthermore, it would be “a serious mistake to define AUKUS only as defence policy. It has the potential to drive us towards a once-in-a-lifetime whole-of-economy transformation.”

Malinauskas and Black are right. Building modern, nuclear-powered submarines is one of the most complex industrial challenges imaginable. That’s why only a handful of countries produce them. It will require the harmonisation of national policy settings in skills, technology, education, migration, taxation, housing and infrastructure as well as defence.

Viewed up close and out of the water, US Virginia-class submarines are very large, complex vessels. The latest version is 140m long and as high as a three-storey building. Constructing them requires advanced metallurgy, vast quantities of steel, thousands of skilled workers, seamless guidance and weapons systems integration, state-of-the-art photonics sensors, stealth technology and precision manufacturing.

That’s just the submarines. Although it seldom hits the headlines, pillar two of AUKUS is making substantial progress, particularly in harmonising regulatory and policy settings between the three countries. The defence free-trade zone is a necessary precondition for closer collaboration and eventually seamless co-production in Australia of essential defence equipment and materiel.

This will facilitate billions of dollars in secure licence-free defence trade by removing most of the previous restrictions on defence exports and technology sharing that have hamstrung Australian industry under the onerous, and innovation sapping, International Traffic in Arms Regulations administered by the State Department.

Pillar two also gives Australia unprecedented access to cutting-edge technology in cyber, artificial intelligence and automation, quantum, electronic warfare, hypersonics and underwater capabilities. The benefits of tech collaboration with the US and Britain will flow through into the wider economy, jump-starting new industries and lifting our flagging productivity. Without it, Australia will remain a research and development laggard and technology taker. We spend less than half the OECD average on R&D.

Albanese must rebut claims that AUKUS is not value for money, a trope weaponised by opponents because his government made the rookie mistake of estimating the full life-cycle cost of the new submarines, producing the eye-popping figure of $368bn.

Can you imagine a car dealer providing a prospective client with the life-cycle costs of the shiny new car in the dealership window? The latest Virginia-class submarine costs about $US4.3bn ($6.3bn) to build, which is the figure that should have been used.

The government has dug a deep fiscal hole for itself by not matching its dire security warnings with a commensurate increase in defence spending, which means we are going to become ever more reliant on the US to do the heavy lifting.

This logic eludes detractors on the left who fail to understand how much more it would cost to defend Australia if we were to go it alone – at least double the $55.7bn we currently spend on defence for far less capability. They play up the cost of AUKUS but discount the benefits – $368bn across 20 years is not an unreasonable amount of money to pay for a generational opportunity to turbocharge Australian industry, defence capabilities and economic growth. That’s less than three years of the projected cost of the National Disability Insurance Scheme in 2034.

The benefits are starting to flow. Australia has already received $1.6bn in US defence contracts within the context of AUKUS, according to Paul Myler, the former deputy head of mission in our Washington embassy. He says the AUKUS pact “is not about making it easier for Australia to buy US kit. If we only look at it through a purchase-sale transaction lens, we have failed. This is a radical reimagination.”

There is a risk that the promised Virginia-class submarines won’t be delivered. But it’s much lower than pessimists allow and will diminish across time for two reasons. AUKUS enjoys strong, bipartisan support in congress.

If Kamala Harris wins the presidency, she will almost certainly maintain Joe Biden’s commitment to the agreement. Donald Trump is unlikely to overturn it because we pay our alliance dues and have already contributed $US3bn to boost American submarine production and free up Virginia-class boats for our navy.

More important, the US Navy is beginning to make real progress in expanding annual submarine production from 1.2 to 2.2 vessels. It’s hiring thousands of additional workers, using 3D-metal printing, increasing efficiencies, modernising government shipyards and outsourcing work to smaller private shipyards. As a result, the trajectory of submarine production measured in tonnage has doubled during the past few years at the two lead submarine shipyards. And it’s on track to double again “in the near future”, according to congressman Joe Courtney, the ranking member of the house armed services seapower and projection forces subcommittee. Operational readiness of the US submarine fleet has gone from 60 per cent to 66 per cent and is on track to hit 80 per cent by 2028.

Wars, like sporting contests, are team events. A bonded, motivated, disciplined and innovative team committed to a shared outcome is hard to beat and the same applies in geopolitical conflicts. The great strength of democracies is that they can work co-operatively at levels that are beyond the reach of authoritarian states for all their mobilising and implementing advantages.

The submarine partnership between the three AUKUS signatories exemplifies what can be achieved. Combining and integrating our respective strengths allows the whole to exceed the sum of its parts. Each submarine the partnership produces benefits all three countries. The same applies to the vitally important technologies in pillar two. It’s a mistake to view AUKUS only from a national perspective and equally siloed thinking to see AUKUS submarine construction in Australia as only benefiting South Australia.

At its heart, AUKUS is an industry, technology and national security multiplier that can help future-proof Australia’s prosperity and security in a troubled world.

The great weakness in the arguments of Keating and Shoebridge is their unwillingness to concede how much the international security environment has worsened in the past three years. Europeans were in similar denial until Russia’s blatant invasion of Ukraine shook them out of their complacency, making them realise that autocrats are driven by power and deterred only by countervailing military strength.

This, of course, is one of the enduring lessons of history. Unfortunately, humans have not progressed to the peaceful nirvana that Shoebridge seems to assume.

AUKUS’s ambition and scale mean this unique strategic partnership is never going to be an easy journey. But three years on from its announcement, AUKUS is developing a momentum that has surprised supporters and detractors alike. It won’t be arrested unless there is a catastrophic loss of political will caused by a failure of government to sell its benefits to a sceptical and disengaged public.