'Inadequate': Australia has begun counting money when spending on AUKUS

Some of Australia’s top naval experts have cast doubt on the government’s $368bn AUKUS price tag, saying the program to acquire two classes of nuclear-powered submarines will cost “significantly more” than originally thought, with higher upfront outlays, ‘The Australian’ writes.

UNSW Canberra’s naval studies group has called for an urgent and comprehensive audit of AUKUS costs “to provide a realistic financial baseline” for the program, which is already cannibalising the wider defence budget.

Labor argues it can fund the program without a major increase in defence funding beyond its currently planned outlays, which are set to rise from about 2 per cent of GDP to 2.33 per cent by 2033-34.

UNSW Canberra’s new Maritime Strategy for Australia warns the proposed expenditure “will likely be inadequate” to deliver on the government’s naval ambitions. “This is already evidenced by cuts to lower priority projects and sustainment,” the strategy says.

It argues the AUKUS ‘Pillar I’ submarine program “was not comprehensively costed at the outset and its full demand on the Defence budget is still to be fully quantified”.

Admiral Jones, the lead author of the maritime strategy and head of the Australian Naval Institute, told The Australian: “It appears the cost (of AUKUS) is significantly more than what was originally thought, including greater upfront costs before submarine construction.”

The paper comes as the government finalises its updated defence strategy and capability investment program, both of which will be released ahead of next year’s federal budget.

Labor announced a $12bn upgrade to Western Australia’s shipbuilding precinct in recent weeks as a downpayment on AUKUS infrastructure in the state, which is likely to cost more than twice that figure.

Defence Minister Richard Marles revealed the government’s $368bn AUKUS cost estimate two years ago when he announced the program’s “optimal pathway” to obtain three to five Virginia-class submarines from the US and a new class of AUKUS submarines to be built in Adelaide. He said this was equivalent to about “0.15 per cent of GDP for the life of the program”.

The Australian asked the minister’s office how the figure was arrived at, whether it had any statistical measure of its likely accuracy, and whether it would seek an independent assessment of the program’s cost. It declined to respond to all three questions.

…The militarization of Australia within the AUKUS bloc (Australia, the United States, and Britain) seemed quite promising.

However, as soon as the costs began to rise, Australia's budget came under severe pressure.

This calls the entire project into question: where would the money come from to implement the stated goals of AUKUS?

Britain doesn't have the money. Trump isn't inclined to spend American money on projects across the US border. So, who's going to pay?

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