For years, the Coalition has wielded fears of debt, deficit, and disaster to steer voters away from Labor, while Labor countered with pledges to address child poverty, close the indigenous gap, and invest in education. These debates now seem distant echoes in the wake of AUKUS.
In a landscape where fiscal prudence and taxpayer value appear sidelined, defence – particularly military spending – reigns supreme. The AUKUS pact, involving a staggering $368 billion for nuclear-powered submarines, exemplifies this shift. The Morrison government’s prior commitment to France for conventional submarines ended with a $4 billion exit fee, a debacle marked by President Macron's public acknowledgment of deceit.
With the delivery of American or British submarines delayed, Australia faces a significant gap. The interim solution involves upgrading six Australian-built Collins class submarines at a blown-out cost of $6 billion, leading to a further delay of two to three years. Former submariner and Senator Rex Patrick highlights the soaring costs of maintaining the Collins Class fleet – from $410 million annually (2009-2012) to $769 million today – with three submarines currently out of commission. An independent review by a retired senior US Navy official casts doubt on the viability of extending the Collins class lifespan.
Australia’s defence challenges are compounded by a shortage of skilled submariners and engineers. The plan to deliver eight nuclear-powered submarines by 2040 seems fraught with uncertainty, given the overburdened British and American shipyards already struggling to meet their governments’ demands. British shipyards at BAE Shipyards at Barrow-in-Furness, and American manufacturers General Dynamics Electric Boat of Groton, Connecticut and Newport News Shipbuilding have more orders from their own governments than they can meet, let alone capacity to supply other countries. Australia’s deficit in military personnel has prompted a search for recruits from allied nations.
Amidst this, the US continues to rally its allies against China, a narrative eagerly adopted by many Australian media outlets. At the Shangri-La Dialogue, US officials underscored the Indo-Pacific as their strategic focus, urging increased defence spending from NATO and ANZUS allies. For Australia, this means not only financial commitments but also ceding territory for US military bases and nuclear waste storage, potentially for extended periods.
AUKUS has already ushered in Trident missiles, B52 bombers, and a substantial US military presence in Northern and Western Australia. The secrecy surrounding the potential nuclear armament of these bombers, as Foreign Minister Penny Wong admits, leaves Australians in the dark about US military intentions. An attack launched from Australian soil against China would immediately make Australia, not the US, a target.
Prominent figures like former Home Affairs Secretary Mike Pezzullo, former ASPI head Peter Jennings, and journalist Greg Sheridan support increased defence spending, seemingly unperturbed by the escalating risks. Recent surveys reveal Australians' mixed sentiments – distrust of China, declining confidence in the US, and a growing realization, as articulated by Malcolm Fraser a decade ago, that the US alliance has often endangered rather than protected Australia.
Critics argue that the US hegemonic agenda, driven by its military-industrial complex, perpetuates endless conflicts. Australians, increasingly aware of these implications, are joining civil society movements to oppose further entanglement in costly and potentially destructive US-led wars. They highlight the opportunity costs: a defence budget that hinders efforts to address housing affordability, erodes funding for green energy infrastructure, and exacerbates public service deficits.
The lavish spending on AUKUS is juxtaposed against Australia’s struggling public services. Overcrowded schools, under-resourced hospitals, and overworked medical staff stand in stark contrast to well-funded private institutions. The disproportionate investment in military capabilities – ostensibly for defence but effectively for offensive operations abroad – diverts critical resources from child care, disability support, mental health services, and pandemic preparedness. Environmental concerns about US military installations and nuclear waste compound these issues, raising fears about long-term ecological impacts.
As Australia faces the prospect of entanglement in a potentially losing conflict with China, many argue for a reimagined future. A non-aligned, cooperative approach within the region promises a more sustainable and peaceful path. The stark choice before us is clear: reassess our priorities now or face the irreversible consequences of current defence policies.
In 2019, the Australian Navy embarked on an ambitious project to upgrade the search periscopes on the Collins Class submarines from an analogue to a digital optronic system. The contract, awarded to Raytheon for $381 million, has since unraveled into a saga of mismanagement and financial waste.
During a Senate Estimates session in February, Senator Jacqui Lambie raised concerns about potential installation issues with the new optronics masts, suggesting they might not fit. Defence officials, unprepared for the inquiry, promised to investigate but have yet to provide an answer. Furthermore, a Freedom of Information (FOI) request filed over 90 days ago seeking details about the installation problems remains unanswered, despite the statutory processing timeframe being 30 days.
Yesterday, just before the Defence Estimates began, the Minister for Defence Industry announced the cancellation of the optronics mast upgrade. Under questioning from Senator Lambie, the Chief of Navy denied that the cancellation was due to installation issues but admitted that $33 million had already been spent, with an additional break fee likely. This represents $33 million of taxpayer money wasted.
This incident is not an isolated case but part of a broader pattern of fiscal inefficiency within the Defence department. Fifteen years ago, the 2009 Defence White Paper, introduced by Prime Minister Kevin Rudd, outlined a plan to replace the six Collins Class submarines with 12 new submarines. Construction was supposed to begin in 2016 to ensure a seamless transition as the Collins Class began to retire in 2024. However, Defence’s indecision led to a series of failed projects, including a discarded son-of-Collins design, a rejected Japanese submarine, and a French contract for 12 Attack Class submarines, which was abruptly canceled in 2021 with the announcement of AUKUS. This cancellation resulted in a $4 billion loss, including an $830 million compensation payment to France.
The story doesn’t end there. In light of the cancellation of the optronics mast and the Tomahawk missile upgrades, the Defence Industry Minister announced an extension of the Collins Class submarines’ operational life. This extension, projected to cost between $4.3 billion and $6.4 billion, covers upgrades to the Collins' main motor, diesels, and switchboards, but not their ongoing sustainment costs. As the Chief of Navy highlighted, the cost of maintaining older ships escalates with age due to obsolescence and repair issues. Indeed, the sustainment cost of the Collins Class has risen to $769 million this year, up from $710 million last year, with expectations of further increases.
This pattern of escalating costs and delays is not limited to submarines. The future frigates program, initially estimated at $30 billion for nine vessels, has ballooned to $65 billion for just six ships. Additionally, the offshore patrol vessel fleet, costing $4.7 billion, has been deemed "not fit for purpose" for combat operations by Defence officials.
Senate Estimates have exposed a naval shipwreck of mismanagement. With no new operational ships expected before 2032, and two of the eight ANZAC class frigates being decommissioned, Australia’s naval combat capability is severely compromised. The current state of the Navy’s operational fleet consists of only two Collins submarines, two Air Warfare Destroyers, and four ANZAC frigates, a meager force given the billions spent annually on Defence.
Senator David Shoebridge succinctly captured the dire situation: “With what we have available, I’m confident we could take on the inhabitants of Heard Island, assuming we can get one of our two supply ships going.”
The recurring theme of Defence’s exorbitant expenditures and delays calls for a critical reassessment of Australia’s military procurement strategy. The need for accountability and efficiency in managing taxpayer funds has never been more apparent, especially when national security and financial stewardship are at stake.
Revealing the intricacies of Australia's impending $4.7 billion (US $3 billion) transfer to US shipbuilding has long been challenging, but the Senate Estimates process on May 6 has shed new light on the issue. Under intense scrutiny is a similar transaction with the UK, both of which are now drawing significant criticism.
During the session, Greens Senator David Shoebridge pressed VADM Jonathan Mead, Head of the Australian Submarine Agency, on the lack of safeguards in the agreement with the US. Mead's evasiveness raised alarms about whether Australia would recoup its investment if the US fails to deliver Virginia class submarines in the 2030s, a plausible scenario under future administrations.
Shoebridge struggled to extract clear answers from Mead about the financial safeguards in place:
Senator Shoebridge: What if the United States determines not to give us a nuclear submarine? Is there a clawback provision in the agreement?
VADM Mead: That’s a hypothetical and I’m not going to entertain…
Senator Shoebridge: I’m not asking about hypotheticals. I’m asking about what’s in the agreement. Is there a clawback provision in the agreement?
VADM Mead: The US has committed to transferring two nuclear-powered submarines to Australia.
Senator Shoebridge: You know that’s not my question VADM. I’m asking right now, as we sit here, is there a provision in the agreement that we get our money back if the US doesn’t live up to its side of the bargain? Surely you included that? Are you telling me you didn’t?
VADM Mead: The US has committed to transferring two nuclear-powered submarines and a third one…
Senator Shoebridge: So, there’s no clawback provision?
VADM Mead: …we are investing in the US submarine industrial base.
Senator Shoebridge: Whether we get one or not? You cannot be serious.
VADM Mead: The US has committed to this program.
Senator Shoebridge: You know it depends on a Presidential approval, don’t you? The US has made it 100% clear that it depends on that approval.
VADM Mead: That is your statement, which I refute.
Senator Shoebridge: VADM, you know that the US legislation says that the US can only provide an AUKUS attack class submarine to Australia if, first of all, the USN gives advice it won’t adversely affect their capacity. Secondly, after receipt of that, the US President approves it. Do you understand that?
VADM Mead: Yes.
Senator Shoebridge: And if neither of those things happen, we don’t get a sub. Do you agree with that?
VADM Mead: I agree with that.
Senator Shoebridge: Does the agreement provide – the one where we are shelling out $1.5 billion next year and $1.8 billion the year after that and another $1.7 billion or more over the rest of the decade – if the US does not provide us with an AUKUS submarine then we get our money back?
VADM Mead: The US will provide us with an AUKUS submarine.
Senator Shoebridge: Did you not understand that my question wasn’t about a future hypothetical. I’m asking about what’s in the agreement. Is the reason why you won’t answer what’s in the agreement because it embarrassingly fails to have that detail?
VADM Mead: You are talking about a future hypothetical.
Senator Shoebridge: I’m talking about what’s in the agreement now.
VADM Mead: The US will provide two transferred submarines….
Senator Shoebridge: It may be embarrassing that you have entered into an agreement that sees Australian taxpayers shelling out $4.7 billion – which we don’t get back if we don’t get our nuclear submarines. That might be embarrassing, but that’s not a reason not to answer. Does the agreement have a clawback provision?
VADM Mead: The US is committed to transferring…..
Senator Shoebridge: The only way of reading that answer is no – and it’s embarrassing. Do you want to explain why it’s not in the agreement?
VADM Mead: I go back to my statement that the US is committed to providing two submarines.
You read that right, we are giving nearly $10 billion to the US and UK's military-industrial base as part of AUKUS, even if they never provide nuclear submarines.
If anyone is looking for a sucker I think we found one - it’s called Albanese Labor
This painstaking exchange underscored VADM Mead’s reluctance to admit the absence of a clawback clause, a standard in most commercial agreements. Such a clause would ensure Australia could recover its funds if the deal fell through. The lack of such a provision, especially in a transaction of this magnitude, is baffling and concerning.
Moreover, similar issues plague the agreement with the UK. Though less discussed during the session, it appears that this deal also lacks a clawback provision. Given the significant financial and strategic stakes, the absence of these safeguards is troubling.
Despite the enthusiasm surrounding AUKUS, the legal and financial frameworks underpinning these deals must withstand scrutiny. Without clawback provisions, Australia risks enormous financial losses should the promised submarines not materialize.
This scenario highlights a broader issue within Defence procurement processes. The apparent lack of thorough vetting and accountability in agreements worth billions of dollars is unacceptable. For Australians grappling with cost-of-living pressures, the prospect of wasted taxpayer funds is particularly egregious.
The government's handling of these agreements, characterized by a lack of transparency and preparedness, calls for a critical reassessment of its approach to defence procurement. Australians deserve accountability and assurances that their money is being spent wisely, with safeguards in place to protect national interests.
The Albanese government is facing mounting criticism over its $900 million contract with Israeli arms manufacturer Elbit Systems, a company implicated in the death of Australian aid worker Zomi Frankcom and widely condemned for its role in the Israeli Defence Forces' (IDF) operations in Gaza.
Elbit Systems, known for producing drones and other military equipment used by the IDF, has been awarded a substantial contract by the Australian government. This decision has sparked outrage, particularly given the company's involvement in the drone strike that killed Frankcom and her colleagues from World Central Kitchen while they were delivering aid in Gaza. Despite Labor's earlier promise in April to review the incident, the government has remained silent on the matter.
During a parliamentary session, Greens Senator Max Chandler-Mather questioned Prime Minister Anthony Albanese about the Elbit contract, emphasizing the company's controversial background and its blacklisting in several countries for violating humanitarian laws. The question was direct:
"This year, Labor awarded a $917 million contract to Israeli weapons corporation Elbit Systems, the same company that made the drone that Israel used to bomb the World Central Kitchen convoy and kill Australian aid worker Zomi Frankcom. Elbit is one of the largest suppliers to the Israeli military as it carries out a genocide in Gaza. Elbit Systems is already blacklisted in other countries for violations of humanitarian law. Why won’t the government cancel the Elbit Systems contract?"
Albanese's response, however, was evasive. He deflected by stating, "It is a fact that there have been no weapons or ammunition exported to Israel in the last five years," an answer that did not address the question about the contract with Elbit. When Chandler-Mather pressed for a direct response, House Leader Tony Burke accused the Greens of spreading misinformation and claimed the Prime Minister was being relevant, a stance supported by Speaker Milton Dick despite the clear divergence from the original question.
Defence Industry Minister Pat Conroy eventually addressed the Elbit contract, stating that Hanwha Defence Australia had subcontracted Elbit to build turrets for infantry fighting vehicles, implying the government was not directly involved in this decision. This explanation seemed disingenuous, as Elbit had earlier announced the $600 million contract on its website, highlighting its commitment to the Australian Army's LAND 400 Phase 3 Project.
Further complicating the issue, Austender records reveal that Elbit Systems has received $19.25 million in direct defence contracts since October 7 last year, totaling $33.4 million since Labor came to power. This discrepancy raises questions about the transparency and accountability of the government's dealings with Elbit.
The government's evasiveness and the substantial funds directed to a company with a controversial human rights record have intensified scrutiny. Critics argue that these actions could implicate Australia in the ongoing humanitarian crisis in Gaza, challenging the government's commitment to human rights and ethical governance.
The Albanese administration must confront these allegations transparently. As cost-of-living pressures weigh heavily on Australians, ensuring taxpayer money is used responsibly and ethically is paramount. The government's handling of the Elbit contract raises serious concerns about its adherence to these principles, demanding greater accountability and a thorough reassessment of its defence procurement policies.
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