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Join our Team! AUKUS foreign expenditure sinkhole blows out to $12B … already

by Rex Patrick | Dec 7, 2023 | Government, Latest Posts

The Albanese Government has just announced another $3B into the US submarine industrial base, in addition to the $4.7B already committed. It’s money that should have been spent in Australia instead. Rex Patrick reports on a widening foreign expenditure sinkhole.

Normally, you’d see a gaggle of politicians in front of cameras if there was a multi-billion dollar Defence contract announcement to be made, but not here.

On December 1, the US Defence Security Co-operation Agency posted an announcement on its website that, over the next three years, Australia is going to tip another $3B of Australian taxpayers’ dollars into US shipyards – Huntington Ingalls Industries and General Dynamics Electric Boat and the US Defense company, System Planning and Analysis Inc.

All three companies are advertising “join our team” on their home pages.

Announceables Galore: Albo cosies up to US on AUKUS, Microsoft and critical minerals

It’s like that old Irish joke where a tourist asks one of the locals for directions to Dublin. The Irishman replies, “well, if I were going to Dublin, I wouldn’t start from here”.

And that’s how it is for the Australian submarine building and support industry. As work has dried up in the wake of the $4B French Attack Class program winding up, all Australian industry can see happening is Prime Minister Albanese flooding the United States with Australian taxpayers’ dollars. You wouldn’t start a manufacturing or submarine software house here; you’d move to the US because that’s where the dollars are going.

Up until last week, Australians were seething that Albanese had committed $4.7B to enhance the US submarine industrial base. It’s cash that’ll be used by the US Defence Department to:

  • Increase the Virginia class production rate (we’re spending money lifting the US submarine build yard’s capacity).
  • Enhance Virginia class submarine deep and intermediate-level maintenance facilities in US (we’re injecting money into their submarine maintenance shipyards).
  • Pre-purchase Virginia submarine components and materials, so they are on hand at the start of the maintenance period – saving time (we’re paying for their submarine spares).
  • Outsource less complex sustainment and expand planning efforts for private sector overhauls to reduce backlog (we’re providing coin to help smaller US companies take some of the load off US shipyards).

This detail was not supposed to be shared with Australians. In a Senate Estimates brief obtained using Freedom of Information laws, it was advised that

this was to be kept quiet and only revealed ‘if pressed on the funding.’

Another $3 billion

The money on the barrel is to be used for “training and training devices”. The announcement states “The sale will advance the AUKUS trilateral agreement by providing the equipment to train Royal Australian Navy crews in areas such as submarine navigation, communications, ship control, and other capabilities.

Additionally, it will also provide the means to train select Australian civilians and contractors at United States Naval Shipyards. This trained workforce will grow Australia’s submarine capability, which is expected to ultimately incorporate technologies from all three AUKUS partner nations.”

Implementation of the sale will involve the assignment of approximately 70 additional U.S. Government and contractor representatives to Australia to support in-person training, equipment familiarisation, and on-site engineering and maintenance of simulation and training devices.

The training program appears to be planned over the next three years.

Expensive training

To give some comparison, it’s worth taking a look at an alternate three billion dollar spend in the education sector.

Adelaide University would seem a good comparison. For a billion dollars in revenue per annum the university pays 3,600 staff and teaches and trains some 23,000 students per annum. For three billion dollars you can get more than 20,000 graduates.

The comparison seems striking.

But we do know that the AUKUS team are spending $633K on travel each month, so they must have things in hand.

AUKUS Gravy Plane: $633K a month in flights with the taxpayer picking up the tab

Submarines In 2033, training in 2024

It’s hard to work out precisely what’s going on. Why are we spending that amount of money on training right now when the earliest we’re going to see a nuclear submarine with an Australian white ensign is 2033?

The answer would appear to lie in ‘Submarine Rotational Force – West’. That’s the part of the optimal pathway laid out by Mr Albanese in March when he took ownership of the AUKUS program.

Last week in Washington Defence Minister Marles announced that “The first planned maintenance activity of a U.S. SSN is planned to occur at HMAS Stirling in the second half of 2024. This will represent a substantial increase in Australian Defence Force participation in maintenance activities on U.S. SSNs.”

So, we’re paying three billion dollars to ramp up our ability to support US submarines operating out of Australia. We’re paying them for us to help them.

Sure, there can be no question that there will be benefits in terms of experience gained by the Australian Navy and Western Australian industry, but former Prime Minister Paul Keating was right in March when he said,

At the Kabuki show in San Diego … there are three leaders standing there. Only one is paying. Our bloke, Albo.

On that note, a check of the Senate Question on Notice database shows Defence has not answered the question from Senator Lambie, “Has Defence paid for any AUKUS partner officials to travel to and from Australia; if so, how much was spent on overseas official’s travel?”. It’s a question that’s been sitting unanswered on the notice paper since August.

The sinkhole expands

AUKUS has become a great sinkhole for Australian taxpayers’ money.

It doesn’t just stop at the US border. In a newly released House of Commons Library research paper, a further widening of the sinkhole was revealed. In a section of the brief entitled ‘Spending on the UK nuclear enterprise,” the following was stated:

“Further, sustained funding will be provided to the SSN-AUKUS program over the next decade. Australia will also make a “proportionate financial investment in the United Kingdom submarine industrial base” to accelerate production and accommodate the manufacture of the nuclear propulsion plants for the Australian SSN-AUKUS submarines in the UK. No further details on that financial contribution have been provided, although the government has confirmed that plans are underway to expand the Rolls Royce site in Derby, with the expectation of creating 1,170 skilled jobs.”

So, it’s a blank cheque from Australian taxpayers and at least 1,170 jobs for the British.

Assuming the UK commitment at this stage is similar to the $US4.7B commitment, we’re exporting more than $12B Australian dollars for no jobs and no growth.

Shipwreck in the making

To add insult to injury, all this is not being revealed by the Australian government, but by the beneficiary partners, as further news hit the streets on the Navy’s $45B Future Frigates fiasco.

A report into the troubled program by two former senior Defence officials found that the Future Frigates tender did not pay sufficient attention to the project’s risks, nor “fulfil the requirements of the Commonwealth Procurement Rules (CPRs) in relation to achieving value for money.”

Having botched yet another major Defence procurement program our Defence Department bureaucrats are moving ahead with the $368B AUKUS submarine program.

On Tuesday Senator Lambie nailed it at question time, asking Foreign Minister Penny Wong, representing Defence Minister Richard Marles:

AUKUS is a multi-decade program set to cost 10 times what the frigates will cost. Minister, how can the Australian people possibly have any confidence that AUKUS won’t be just another stuff-up?

Apart from the benefit to the foreign industry from our $12B cash injection, AUKUS is a mammoth shipwreck in the making.

I just want a Ferrari, sorry, a nuclear submarine, no matter the cost

Rex Patrick is a former Senator for South Australia and earlier a submariner in the armed forces. Best known as an anti-corruption and transparency crusader - www.transparencywarrior.com.au.

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