Eight expectations for the AUKUS announcement

Introduction

Australia is fast approaching a watershed moment for its national security. In March, Australian Prime Minister Anthony Albanese, British Prime Minister Rishi Sunak and US President Joe Biden will announce the "optimal pathway" by which Australia will acquire at least eight nuclear-powered, conventionally armed submarines (SSN) under the AUKUS partnership. Prime Minister Albanese has described it as “the single biggest leap in our defence capability in our history.”

By the AUKUS partnership’s first anniversary in September 2022, promising early efforts had been made to invest in infrastructure, form the necessary information-sharing agreements and establish training programs. At the same time, much remained uncertain about the scope, cost and timeline of the AUKUS submarine capability. With the completion of the initial 18-month consultation period, this explainer surveys official statements and remarks to uncover clues about the forthcoming submarine announcement. It foreshadows possible decisions in eight priority areas: the chosen submarine build, a potential interim capability gap, sovereignty considerations, costing, workforce demands, nuclear stewardship, force posture and structure and export controls.

1. Submarine build

Source: USSC

What kind of nuclear-powered submarine Australia will acquire has inspired intense speculation. The initial frontrunners were the US Virginia-class or UK Astute-class attack submarines. However, the option of a so-called “off-the-shelf” purchase of either submarine is unlikely.

In January 2023, a leaked letter by US senators Jack Reed and James Inhofe, the Chairman and then-ranking member of the Senate Armed Services Committee, raised concerns about AUKUS “stressing the U.S. submarine industrial base to the breaking point.” A bipartisan group of US congressmen were quick to reiterate their support for AUKUS once the story broke, insisting it would be a “rising tide that lifts all boats.” This support notwithstanding, the United States is currently struggling to build the two boats per year needed to achieve its own force-level goal of 60 to 69 SSNs by 2052. The US submarine option had another setback recently with revelations that four of its submarine dry docks would be closed for repairs against potential earthquake damage.

Similarly, choosing to extend the UK’s Astute-class program is unlikely. The United Kingdom is undertaking a sequential build process whereby it is moving to build its Dreadnought-class ballistic-missile submarine (SSBN) program while designing the Astute-class replacement. Even if Australia was to acquire an Astute-class submarine, there would be challenges integrating the onboard combat system, as it differs from that of current Australian and American fleets.

Senior leaders from Australia and the United Kingdom have instead suggested that the chosen design will be a genuinely “trilateral effort” and a “tri-nation project.”

Senior leaders from Australia and the United Kingdom have instead suggested that the chosen design will be a genuinely "trilateral effort" and a "tri-nation project." Australian Defence Minister and Deputy Prime Minister Richard Marles stated in December 2022 that, “whereas perhaps earlier on in the process one might have imagined that this could turn into some competitive process, what’s really been clear as this has evolved is that it’s a genuine collaboration.” These comments add weight to the possibility that the three leaders could announce some variation of the yet-to-commence US Next-Generation Attack Submarine or UK Submersible Ship Nuclear, Replacement (SSNR) programs to accommodate Australian requirements, or even that a completely new 'AUKUS-class' design might be unveiled to be acquired by all three countries.

Expectation: An off-the-shelf acquisition is highly unlikely, with a tri-national build the frontrunner.

2. Capability gap

Source: USSC

Any capability gap arising between the retirement of Australia’s existing Collins-class submarine fleet and the arrival of the AUKUS submarines will need to be addressed in the March announcement. The previous Australian Government approved the Life of Type Extension of the Navy’s existing fleet of six conventionally powered Collins-class submarines to commence in 2026, which will extend their service lives by 10 years. Nevertheless, the potential for a gap remains a concern, as Defence Minister Marles voiced in July 2022. At the December 2022 AUSMIN meeting, US Secretary of Defense Lloyd Austin declared “we will not allow Australia to have a capability gap going forward,” though it remains unclear how it will be addressed.

A range of stop-gap measures have been proposed both in and outside of government over the past 18 months.

A range of stop-gap measures have been proposed both in and outside of government over the past 18 months. One of the most popular suggestions is that an interim conventionally-powered submarine fleet should be acquired to defend Australia until all eight AUKUS submarines are built. However, this option was definitively rejected by Defence Minister Marles, who said there were no such plans during a visit to France in January 2023.

Officials in Australia and the United States have raised the option of leasing, purchasing or co-crewing US Virginia-class submarines in the Indo-Pacific. Another possibility is increasing the presence of US and UK submarines in Australia by allowing them to home port at Australian bases for maintenance and resupply. British media have suggested that the United Kingdom is contemplating selling Australia an Astute-class submarine as an interim capability while ruling out lending a submarine. Meanwhile, some Australian defence companies have called for fast-tracking autonomous underwater systems (AUVs) to plug any gaps, though the extent to which these systems can substitute submarine capabilities remains unclear.

Expectation: Australia is unlikely to acquire an interim conventionally powered submarine.

3. Sovereignty considerations

Source: USSC

Debate about the implications of AUKUS for Australia’s sovereignty has intensified as the submarine announcement has drawn closer. The first issue is whether nuclear-powered submarines will make Australia unacceptably dependent on the United States and the United Kingdom for their operation, as argued by former Prime Ministers Malcolm Turnbull and Paul Keating. In response, Defence Minister Marles most recently addressed Parliament, stating that “the reality is that almost all of Australia’s high-end capability is developed in cooperation with our partners… [and] dramatically enhanced capability dramatically enhances our sovereignty.” This was reaffirmed at Prime Minster Albanese’s National Press Club Speech in February 2023 where he categorically noted that operational decisions for Australian nuclear-powered submarines would remain the sovereign prerogative of the Australian Government.

Much of the ADF is equipped in partnership with foreign companies, such as US fighter jets and helicopters for the Air Force, British frigates and Spanish destroyers for the Navy, and German combat reconnaissance vehicles and South Korean self-propelled howitzers for the Army.

For the Australian Government, the AUKUS partnership is an evolution of Australia’s existing close defence industrial capability cooperation with key allies and partners. Much of the Australian Defence Force is equipped in partnership with foreign companies, such as US fighter jets and helicopters for the Air Force, British frigates and Spanish destroyers for the Navy, and German combat reconnaissance vehicles and South Korean self-propelled howitzers for the Army. A delicate point of difference between the operation of these other capabilities and nuclear-powered submarines is the question of sovereign control over the nuclear reactors that will power the boats. In February 2023, Australia’s Chief of the Nuclear Powered Submarine Taskforce, Vice Admiral Jonathan Mead, stressed that Australia will have “absolutely sovereign control and command of the reactor and the submarine.” How this will function in practice is a key question that will need to be answered in the March submarine announcement.

The second issue is whether Australia will retain control over its use of these submarines in any military contingency in the Indo-Pacific. US officials have repeatedly sought to allay such concerns. The day after AUKUS was first announced in September 2021, US Secretary of State Antony Blinken noted that, “there are no follow-on reciprocal requirements of any kind,” and US Secretary of Defence Austin added, “we certainly didn’t go into this with a quid pro quo mindset.” In January 2023, Prime Minister Albanese maintained that “we are being very clear that Australia's sovereign interest will be protected in any arrangements that we enter into.” Defence Minister Marles in a February 2023 speech further posited that high-end capability, “the use of which is at the complete discretion of a country, contributes greatly to the capacity of a people to determine their circumstances and therefore contributes greatly to national sovereignty.” The submarine announcement is unlikely to dispel these concerns but will hopefully enable a more informed discussion.

Expectation: New debate will emerge about the relationship between Australia’s sovereign capacity and control.

4. Cost

Source: USSC

Details as to the cost of the AUKUS submarines and associated infrastructure have been promised repeatedly by Australian officials as part of the March announcement. Defence Minister Marles noted in December 2022 that this will only be in "general terms," given the project’s long time horizon, but that “we’re dealing with the next four years […] you’ll see costs of this program start to appear in the forward estimates.” Whereas the French Attack-class program had an indicative cost of $90 billion for 12 conventionally powered submarines, the AUKUS submarines are estimated to cost anywhere between $100 billion and $171 billion for eight SSNs.

Details as to the cost of the AUKUS submarines and associated infrastructure have been promised repeatedly by Australian officials.

The Australian Department of Defence has previously estimated that the facility and infrastructure costs alone required to transition to a nuclear-powered submarine fleet would cost $10 billion. A key benefit of building in Adelaide is that, whereas US and British shipyards face inefficiencies after decades of operation, Australia will begin from a ‘clean sheet’ in shipyard design, manufacturing facilities and production techniques to become one of the "most sophisticated construction yards in the world."

Regardless of build type, Vice Admiral Mead confirmed that “the Government is absolutely committed to building the boats in South Australia.” Therefore, an important component of the AUKUS costing will be Minister for Defence Industry Pat Conroy’s Defence Industry Development Strategy, which will align defence procurement plans with Australian industry participation. Minister Conroy has already stated that he wants to move away from "counterproductive" quotas on local industry content that unnecessarily raise costs.

Expectation: A top-line figure has been promised, with more detail expected after the Federal Budget in May 2023.

5. Workforce

Source: USSC

With the Australian Government intending to commence construction of the first AUKUS submarines in Adelaide "towards the end of this decade," building the national – and especially South Australian – workforce is a key priority. For context, the cancelled French Attack-class program involved 5,000 workers, but the latest UK nuclear-powered Astute-class submarine, HMS Anson, required more than 10,000. Just this month, Minister Conroy argued that relying on American and British skilled migrants to fill shortfalls "doesn’t make sense." The United States and the United Kingdom are both facing significant workforce shortages; the British submarine workforce has fluctuated from as low as 2,000 to as high as 17,000 during construction. Moreover, strict security vetting requirements prevent rapid workforce expansion.

The cancelled French Attack-class program involved 5,000 workers, but the latest UK nuclear-powered Astute-class submarine, HMS Anson, required more than 10,000.

In addition to shipyard workforce challenges, submarine personnel are also facing significant constraints. The Australian Navy was already facing personnel shortages operating six Collins-class submarines and eight Anzac-class frigates, which were set to be stressed by the transition to 12 Attack-class submarines prior to the September 2021 AUKUS announcement. Crewing challenges are likely to escalate as submarine personnel requirements expand from a 55-person crew for Collins-class submarines to closer to a 98-person crew, as required by the UK Astute-class submarines or a 135-person crew, as required by US Virginia-class submarines.

In an effort to kickstart growing the domestic shipyard workforce, 750 Australian engineers and technicians are expected to be sent for training across three nuclear submarine shipyards in the United States and the United Kingdom. To simultaneously grow the skillset of Australian submarine personnel, the United States and the United Kingdom have each invited Australian submariners to participate in their submarine training programs as a first step. US members of Congress also have proposed co-crewing US nuclear-powered submarines in the Indo-Pacific with Australian sailors and floated the possibility of joint command. And rather than travelling abroad for the training, two Australian Navy submariners completed the inaugural Australian Submarine Command Course in October 2022, thereby enabling the Navy to “determine the timing and content of the course and optimise it to meet our requirements.” These efforts will need to accelerate if Australia is to lay the foundations for its future submarine crews in conjunction with planned expansions to the Australian Defence Force.

Expectation: Workforce education and training programs may expand, with details to emerge in subsequent consultations.

6. Nuclear stewardship

Source: USSC

Vice Admiral Jonathan Mead has emphasised the importance of developing sovereign credentials in "nuclear stewardship." He specified that Australia will receive sealed nuclear reactors powered by highly enriched uranium. These reactors will not need to undertake nuclear refuelling at any point during the service life of the boat – in contrast, flow-enriched uranium reactors require refuelling every six to seven years. Nor will Australia have to handle the nuclear material. That being said, to operate SSNs Australia must be able to dispose of nuclear waste or make arrangements for a partner to do so. Australia will also need to closely collaborate with partners in order to implement satisfactory nuclear standards in practice. The March submarine announcement will need to offer greater detail in terms of how Australia intends to develop a nuclear ecosystem that is capable of protecting the reactors for decades to come.

The March submarine announcement will need to offer greater detail in terms of how Australia intends to develop a nuclear eco-system that is capable of protecting the reactors for decades to come.

Australian Foreign Minister Penny Wong and her counterparts have repeatedly emphasised their commitment to the Nuclear Non-Proliferation Treaty (NPT) and have insisted that AUKUS will abide by nuclear safeguards obligations. Australia needs to cultivate a cadre of senior experts with non-proliferation expertise to defend AUKUS in international bodies to counter misinformation. Chinese efforts to frame the AUKUS partnership as a violation of NPT commitments at International Atomic Energy Agency meetings have thus far proven unsuccessful, though they have undermined regional perceptions of what AUKUS is, as discussed in a previous USSC explainer. In spite of the Australian Government’s efforts, misinformation campaigns will likely intensify following the submarine announcement.

Expectation: Insight will be provided into Australia’s use of nuclear technology, though it will not completely allay regional concerns nor misinformation.

7. Force posture and structure

Source: USSC

The Albanese government will seek to harmonise the upcoming announcement with the Expanded US-Australia Force Posture Initiatives announced at AUSMIN 2021 and formalised in 2022. The previous Australian Government announced a new submarine base would be built on Australia’s east coast and identified Brisbane, Newcastle and Port Kembla in Wollongong as possible locations. In office, the Albanese government has maintained support for this proposal. This would be in addition to substantial upgrades to the port infrastructure at HMAS Stirling in Perth to accommodate and maintain US and UK naval assets, including submarines.

The previous Australian Government announced a new submarine base would be built on Australia’s east coast and identified Brisbane, Newcastle and Port Kembla in Wollongong as possible locations.

The increased rotation of US naval forces through Australian facilities and the development of "a combined logistics, sustainment, and maintenance enterprise" have clear implications for potential joint or coordinated submarine operations from Australian facilities in the coming years. At the same time, the Australian Government remains committed to the “fundamental principle underpinning these activities [which] is the longstanding bipartisan policy of having no foreign bases on Australian sovereign territory.”

Beyond the location of forces, the leaders may commit to the minimum number of boats to be built in Australia and confirm the ultimate composition of the planned force. The submarine announcement will complement the acquisition of new long-range strike capabilities recommended by the forthcoming Defence Strategic Review. Recent decisions to acquire land-based and anti-ship missiles portend the review’s expected emphasis on a new strategy of what Defence Minister Marles has called "impactful projection."

Expectation: The location of the new east coast naval base could feature in the submarine announcement.

8. Export controls

Source: USSC

The stringent regime of US export controls and protocols jeopardise the technology transfer needed for AUKUS. In December 2022, Defence Minister Marles said creating a "seamless environment" for intellectual property, technology sharing and industry integration would be difficult, but emphasised the three capitals were willing to work together to break down barriers. US House AUKUS Caucus co-chair Representative Mike Gallagher also underscored his commitment to reforming the US export control regime, suggesting that a “carve-out” of the International Traffic in Arms Regulations (ITAR) may be needed to make AUKUS a reality.

Given the apparent bipartisan political support in the United States, many in Australia remain optimistic that AUKUS may be the silver bullet that unlocks the US defence industrial base.

Given the apparent bipartisan political support in the United States, and the pace at which AUKUS partners instituted trilateral legal agreements, many in Australia remain optimistic that AUKUS may be the silver bullet that unlocks the US defence industrial base. However, elevating cooperation from information-sharing to far more complex technology transfer will be a daunting task. This issue will be increasingly pressing for Australian policymakers following the submarine announcement.

Expectation: The announcement could flag high-level intent to fast-track regulatory reforms for the submarine project.

Conclusion

The March submarine announcement will conclude the 18-month preliminary consultation phase of the AUKUS partnership. The Australian, American and British publics will finally get a clearer idea of how their governments intend to realise this ambitious endeavour. Ideally, the announcement will offer insight into the eight priority areas discussed in this article, consolidate key decisions and set in motion an "ambitious timeline" for capability acquisition. Ultimately, however, most efforts will be long-term challenges for Australia and its AUKUS partners, demanding engagement with a vast array of stakeholders beyond the federal government to deliver. In that regard, the AUKUS announcement will no doubt create as many questions as it answers.