Paul Keating called AUKUS “the worst deal in all history.” As the project proceeds, it’s becoming clear the former Prime Minister has grossly understated the situation. Rex Patrick explains.
Over the weekend, the United States President Joe Biden put a $US50B supplementary budget request to Congress to fund weapons for Ukraine and humanitarian aid for Israelis and Palestinians following the Hamas attacks in Gaza. As part of that package, there’s a $US3.4B line item to support the US submarine industrial base.
we’re paying $A4.7B to for a shipyard that will just build one Australian submarine.
This request seems to be addressing an AUKUS pre-condition of the Congress that the United States must improve its submarine production rate from two boats a year to three and get their existing boats out of maintenance yards faster, before any Virginia class submarines can be transferred to the Royal Australian Navy.
The US currently has two submarine production yards. This may have to go to three.
So, what’s the scam?
It’s not just the fact that Australians will pay a socially bankrupting $A368B for AUKUS. It’s worse than that.
It now appears that the initial $US3B ($A4.7B) cheque that Albanese has promised to write out to the US Defense Secretary will be combined with this new US money to build a new shipyard capability – in the US.
So, as well as paying for each of the three submarines that are part of the deal, we’ll pitch in half the money to help build a new US shipyard to construct them. Except … wait for it … we’re not getting three new submarines. Two of them will be second hand boats, already one-third into their life span.
But wait, there’s more
After we get two second hand and one new Virginia class submarine, we’re going to switch away from buying proven submarines to buying a brand new British submarine design.
Our Defence bureaucrats are planning to jump from a safe US program to a shipbuilder, BAE Systems, that was, at one stage during its last submarine program, four and a half years late and 53% over budget. BAE is the same shipbuilder for our current Hunter Class future frigate program, which is currently running about three years late.
But wait, there’s even more
The United Kingdom Government has just signed a design contract for the AUKUS submarine that, on publicly available information, does not include a requirement to engage Australian industry.
It’s the wrong time to inject Australian industry components in the AUKUS submarine after it has been designed. We’ll have missed the boat.
So, Paul Keating was wrong when he said AUKUS was the worst deal in all history. He missed the mark. It’s actually worse than what he said. It’s looking like the dumbest deal ever.
What Keating did get right, though, was a second statement “At the Kabuki show in San Diego [to announce the deal] a day or so ago, there’s three leaders standing there. Only one is paying. Our bloke, Albo. The other two, they’ve got the band playing Happy Days are Here Again.”