Australia’s secretive AUKUS payments raise fresh doubts over sovereignty and trust in the US alliance

 

The Albanese government is transferring billions of dollars in public funds to the Trump administration to bolster America’s naval shipyards, while refusing to disclose when the payments are made or whether any guarantees are in place.

The Australian Submarine Agency, which manages the nuclear-powered submarine program, has blocked the release of a payment schedule under Freedom of Information laws. Officials argue that transparency would damage Australia’s international reputation and weaken its financial bargaining position.

Former Labor senator Doug Cameron, now patron of Labor Against War, has condemned the secrecy. He said that the government should “stop throwing good money after bad and cease all AUKUS payments to the Trump administration.”

Billions committed, little certainty in return

Under AUKUS, Australia has committed at least $4.6bn (US$3bn) to help the United States address its own submarine maintenance and production bottlenecks. The rationale is that this will eventually smooth the way for Australia to buy at least three Virginia-class submarines during the 2030s. Yet critics point out that there is no guarantee Washington will actually deliver the vessels.

Greens defence spokesperson David Shoebridge said it was “embarrassing for Labor that it is sending so much public money to the US to build nuclear submarines we will never get” and that embarrassment was “the worst possible reason” to withhold access to payment schedules.

These direct transfers to the US are only one part of a far larger commitment. The overall AUKUS submarine program is forecast to cost between $268bn and $368bn by the mid-2050s. Australia and the United Kingdom are jointly designing a new class of nuclear-powered submarines, to be constructed in Adelaide, which are not expected to enter service until the 2040s.

Trump’s leverage

The Trump administration is conducting its own review of AUKUS and has already signalled it wants Australia to increase defence spending dramatically and to commit explicitly to supporting the US in a potential conflict with China.

The first payment of US$500m was announced by Defence Minister Richard Marles during a February visit to Washington, where he stood alongside Donald Trump’s newly installed Pentagon chief, former Fox News contributor Pete Hegseth. In a telling exchange, Hegseth quipped that “the cheque did clear,” prompting Marles to reply that he was “pleased” to make the transfer during the first week of Hegseth’s tenure.

Further evidence of payments has emerged through disclosures in Washington. US Navy Secretary John C. Phelan told Congress in June that Australia would deposit another US$500m that month and an additional US$1bn by the end of 2025. Australian officials, however, refused to confirm the timing of the transfers when asked by the Nine newspapers in July.

FOI blocked

When a Freedom of Information request was lodged seeking the payment schedule and any advice on refund mechanisms, the Submarine Agency admitted it had a document that included details of the transfers. But the agency refused to release it, citing confidentiality between governments. The FOI decision warned that disclosure could “disadvantage the Commonwealth in future procurement negotiations.”

Doug Cameron said this was “an outrageous claim” and accused the government of hiding behind “negotiating leverage” to avoid accountability.

Andrew Fowler, author of Nuked: The Submarine Fiasco that Sank Australia’s Sovereignty, argued that Australia had already surrendered any leverage when the Morrison government abandoned the French submarine deal in favour of AUKUS. “Australia’s reputation was shredded then, and any leverage was lost,” he said.

Growing opposition inside Labor

Opposition to AUKUS is mounting within Labor ranks. The Victorian Labor Party recently passed a motion calling for an independent parliamentary inquiry into the pact and for payments to be suspended until its findings are delivered.

Cameron and other critics argue that the submarine deal ties Australia irrevocably to Washington’s military ambitions. “This is about making Australia a base for US militarism and hegemony in Asia,” he said, warning that it risks dragging the country into conflict with China, its largest trading partner.

The Albanese government insists AUKUS is about deterrence and regional stability. Marles has argued that Australia and the US share the values of “democracy and the rule of law.” But Cameron countered that the Trump administration’s authoritarianism and disregard for legal norms means “Australians cannot trust the USA as a defence partner.”

A pact that goes beyond submarines

Both supporters and critics agree that the significance of AUKUS extends well beyond submarines. A senior Biden administration official once described it as binding Australia “decisively” to the US and UK for generations.

Emma Shortis, of the Australia Institute, said Trump had simply made explicit the risks that were always inherent in the agreement. “The pre-commitment to joining conflict is built in,” she said, “it is just that the Trump administration may be more willing to say the quiet part out loud.”

The Albanese government continues to defend its payments as part of a multilateral arrangement with the US, yet its refusal to disclose details has deepened doubts about accountability and transparency in what is now the most expensive defence project in Australia’s history.

Albanese and Penny Wong, Australia’s Foreign Minister, argue the agreement bolsters regional deterrence and stability. But now the risks are no longer latent. Budget opacity, dependency on US platforms, and restricted sovereignty are combining to test both accountability at home and credibility in Canberra’s foreign policy.

New strains from Palestine recognition

Australia’s sudden decision to recognise a Palestinian state at the United Nations in September has only heightened tensions with Washington. Mike Huckabee, then US Ambassador to Israel, expressed strong disappointment and even “some disgust” at the timing and lack of consultation. His comments followed sharply worded reactions from Israeli officials and added complexity to Canberra’s relations with its long-time ally.

Although Foreign Minister Penny Wong informed US Secretary of State Marco Rubio before the public announcement, the emotional impact in Washington and Jerusalem has eroded trust. Analysts warn the move may make American legislators and defense officials less enthusiastic about approving further AUKUS support, especially at a time when Australia’s reliability as an ally is already under scrutiny. The recognition has been portrayed as a values-driven foreign policy choice, yet it also confronts Canberra with a deepening question of how independent and autonomous its alliance with Washington truly is.

No refunds

If the United States ultimately reneges on its commitment to deliver Virginia-class submarines, Australia will have no avenue to recover the billions already transferred. The Freedom of Information request confirmed there is no refund mechanism in place, meaning the money is gone regardless of the outcome. Critics argue that this represents not just poor negotiating practice but a serious misallocation of scarce public funds. The billions funnelled into American shipyards could instead have been directed to pressing domestic needs such as alleviating Australia’s chronic housing shortfall, boosting Medicare, or funding climate resilience projects. The absence of safeguards leaves taxpayers underwriting a gamble where the risks are entirely Canberra’s and the benefits rest on Washington’s goodwill, which is arguably rapidly eroding.