Budget Estimates for Nuclear-Powered Submarines Increase to $18 Billion by 2029
The cost of Australia’s AUKUS nuclear-powered submarine program is set to rise by an additional $6 billion over the next five years, bringing the total projected spending to $18 billion by 2029, according to new budget figures.
The latest Defence portfolio statement outlines the significant increase in projected costs, up from $12 billion in last year’s budget estimates. This surge in spending has reignited debate over the affordability and strategic necessity of the AUKUS pact, with critics questioning the long-term economic and security implications of Australia’s largest-ever defence procurement.
This is against a background of a rising cost of living crisis and minimal government action to remedy this in last night's (26 March 2025) budget.
Breakdown of Rising Costs
The updated budget details a steady increase in AUKUS-related spending, with funding for the submarine program rising from $2.4 billion in the current financial year to $6.2 billion by 2028-29.
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2024-25: $3.1 billion
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2025-26: $1.3 billion
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2026-27: $4.9 billion
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2028-29: $6.2 billion
Beyond these figures, the budget allocates $445 million over five years for nuclear-powered submarine sustainment, despite Australia not yet possessing any such vessels. It remains unclear whether this funding will support costs related to visiting US nuclear submarines, such as the USS Minnesota, which docked in Western Australia in February 2025 for the first in a series of planned visits.
Defence Minister Richard Marles has not provided further details on how these funds will be used.
A Growing Financial Commitment Amid Economic Pressures
The rising costs come at a time of economic uncertainty, prompting renewed criticism of the government’s defence spending priorities. Greens defence spokesperson David Shoebridge, a vocal opponent of the AUKUS agreement, questioned the rationale for additional investment in nuclear-powered submarines.
“Why on earth, in the middle of a cost-of-living crisis and worsening climate emergency, is the Albanese government choosing to dump billions more into nuclear submarines we will never get?” Shoebridge said in a statement.
The full cost of the AUKUS submarine program is expected to exceed $368 billion by the mid-2050s, a long-term financial commitment that successive governments will have to manage.
Strategic Concerns and US Expectations
While the government argues that the accelerated spending timeline will help strengthen Australia’s defence capabilities, some analysts believe the increased funding still falls short of meeting strategic demands.
A report from the Australian Strategic Policy Institute (ASPI) suggests that despite the funding increase, defence spending remains below expectations set by key allies, particularly the United States.
Marc Ablong and Marcus Schultz, analysts with ASPI, described the 2025-26 budget as a “lost opportunity”, arguing that the government’s approach risks undermining Australia’s credibility as a serious defence partner.
“In failing to adequately fund defence, the government has lost the opportunity for at least one year to convince our interlocutors in the US that Australia is doing enough to build up its forces,” they said.
Washington has previously urged Australia to increase its defence spending to 3% of GDP, but the current trajectory suggests it will only reach 2.33% by 2033-34.
The Road Ahead for AUKUS
The Albanese government has already announced plans to bring forward $1 billion in funding from the 2028-29 financial year to the coming years in an effort to speed up the delivery of key defence capabilities.
“This move will allow the government to deliver crucial capabilities for the Australian Defence Force sooner,” Marles stated in a recent social media post.
Despite this, questions remain about whether Australia’s current defence spending is sufficient to meet growing regional security challenges and whether the AUKUS agreement remains the best strategy for strengthening the nation’s military posture in the Indo-Pacific.
With the first AUKUS submarines not expected to be operational for decades, the debate over cost, sustainability, and strategic necessity is set to continue.
Labor has batted away the objections of its elders — Paul Keating, Gareth Evans, Bob Carr (who described AUKUS as “fragrant, methane-wrapped bullshit”) and Doug Cameron. Less easy to dismiss are the views of retired rear admiral Peter Briggs who concluded last year that halting the AUKUS submarines might be difficult, challenging and politically courageous, “but not nearly as improbable as getting SSNs [nuclear submarines] under AUKUS on time”. He made that call before Trump’s mayhem was unleashed.
Another former senior naval officer, Chris Barrie, who led the Australian Defence Force from 1998 to 2002, declared that “the vandals in the White House” have pushed the alliance to the brink of irrelevance, and urged the government to reassess its partnership.
So when is enough enough?
If Australia’s former military insiders are sounding the alarm, maybe it’s time for self-interested politicians to listen and act.
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