(Image: Private Media)

This is part four of an investigative series. Find part one here, part two here and part three here.

Whatever else AUKUS signifies, it is a policy nightmare for the Albanese government which has inherited what was literally a half-baked idea from Scott Morrison.

Defence Minister Richard Marles offered a reassuring tone this week, saying on the 12-month anniversary of the AUKUS announcement that the pathway to acquiring nuclear submarines was “taking shape”. Nuclear subs would make “the rest of the world take us seriously”. He also emphasised the “really huge opportunity” beyond submarines and linked this to trade and commerce.

The precise pathway to whatever nuclear submarine design Australia chooses — UK, US or a “tripartite” design — will be made clear by March.

Marles’ update comes against the backdrop of mounting concerns about the viability of the nuclear submarine component of the AUKUS deal. The projected cost is extreme — already. US production lines are apparently at capacity. Same in the UK. The logistics of building a nuclear submarine in Australia are formidable. Experts are at odds on whether or not the submarines will hold their strategic worth in 20 years’ time. 

National security expert Hugh White, who was the principal author of Australia’s 2000 Defence white paper, has made the case for Australia to dump the nuclear subs altogether.

Allan Gyngell, a former head of the Office of National Assessments and inaugural executive director of the Lowy Institute, questions what it means for Australia’s sovereignty: “Will it make Australia ultimately a subsidiary of the United States Navy? But we know so little about the agreement. It is still shrouded in mystery.”

The Lowy Institute’s Sam Roggeveen suggests we need to “take seriously the possibility that we will never get the AUKUS submarines”.

The doubts are on top of Australia’s lost decade when it comes to its submarine fleet, not to mention the billions of dollars already paid out on the aborted French Attack-class project.

Notwithstanding the legitimate angst, AUKUS is still attractive to Opposition Leader Peter Dutton, the Coalition and its backers as a political wedge issue. Some things don’t change.

A year ago AUKUS played into Labor’s political messaging that Scott Morrison was the “all announcement, no detail” prime minister.

“You do a public announcement and you message that you’re going to get nuclear subs, but actually you’ve not made any decisions, other than to consult about it and to cancel a contract,” Labor Senator Penny Wong said.

That’s not entirely fair. Morrison’s officials managed to have the US open the door for Australia to have access to its nuclear secrets, joining the UK. 

But now it’s Labor’s problem. So what is it going to do?

Going nowhere — fast

The AUKUS partners are halfway through an 18-month “pathway to implementation” which will resolve how and where Australia’s nuclear-powered submarines can be built. Come what may, though, AUKUS is already hoovering up large amounts of money and time. 

Euan Graham, senior fellow at the Institute for Strategic Studies, says there are 18 working groups devoted to AUKUS: eight on the nuclear issues and 10 covering the advanced technologies separate to the submarines.

Teams from Australia, the UK and the US visited sites in Australia early this year to “baseline” Australia’s “nuclear stewardship, infrastructure, workforce and industrial capabilities and requirements”, according to official announcements.

There are steps to build an Australian workforce with the skills for nuclear-powered submarines. There’s also a long list of projects for “collaboration”, including on undersea capabilities, quantum technologies, artificial intelligence, advanced cyber, hypersonic and counter-hypersonic capabilities and electronic warfare. 

In Australia hundreds of Defence employees, including its best brains, have been diverted to work on AUKUS, even as voices of dissent emerge.

So where does it leave Albanese?

The new prime minister has inherited not only the AUKUS deal but also the Security and Defence officials who worked to put it in place.

Marles said in a briefing this week that it was “really clear” Australia would have to develop its own capacity to build nuclear-powered submarines. This means Australia has to develop an industrial base “here at home”.

“We hope AUKUS can help develop a genuinely seamless defence industrial base across the US, the UK and Australia,” he said. (“Seamless” will be a word to watch for those interested in AUKUS messaging, joining Morrison’s “forever” pact.)

Anthony Albanese has already brought into the fold his old political ally and a former defence minister, Stephen Smith, to report on the status of defence procurements.

Smith arrives as an emissary from a world beyond. Like so many others in the AUKUS story, he comes highly networked through the influential — though little scrutinised — world of policy think tanks.

Smith is a long-term director of Perth’s US-Asia Centre which is aligned with the US Studies Centre, based in Sydney University. (Both centres are funded by the American Australian Association Ltd, which was founded by Sir Keith Murdoch in the 1940s. The Murdoch link remains strong. The US Studies Centre was set up in 2006 with a $25 million endowment from then prime minister John Howard after lobbying from the American Australian Association, instigated by Rupert Murdoch. The centre continues to be officially supported by News Corp Australia, The Australian and Sky News.)

Like other policy think tanks, the centre has the financial support of defence manufacturers, in this case Northrop Grumman, Thales and Boeing Australia. Of relevance to AUKUS, there has been a cross-pollination of policy experts between the US Studies Centre and Washington’s influential Center for Strategic and International Studies (CSIS).

A case in point is Dr John Edel. A former security adviser to former Democratic secretary of state John Kerry, Edel was a senior fellow at the US Studies Centre before becoming the inaugural Australia chair at the Center for Strategic and International Studies. Edel’s view is that China had only itself to blame for the AUKUS agreement coming about because of its “aggressive use of its military and economic power”, as he spelt out in Foreign Policy.

In the revolving-door world of think tanks, government and industry, Washington’s CSIS has been pivotal. It is the same think tank where Australia’s Andrew Shearer worked before he was appointed Morrison’s cabinet secretary in 2019 and then as head of the Office of National Intelligence. 

Defence-funded think tanks have played a role in building a policy consensus in Australia, the US and the UK that the Western powers need to be equipped with the ultimate weapons to counter China’s rise. Maybe they know the realpolitik of China. Maybe they’re right. Maybe they aren’t. But they are part of the vested interests which the Albanese government confronts when it takes a long, hard look at the future of AUKUS. 

The never-ending shemozzle

Whether or not Australia’s nuclear-powered submarines materialise by the early 2040s, there will be a capability gap which will need to be filled. 

“The whole submarine space is a wicked problem for the government,” Marcus Hellyer, senior defence analyst at the Australian Strategic Policy Institute (ASPI) says. 

“Two [of the planned eight] submarines might be ready by 2040 but even so you need more than that to make an effective fleet and that would take us into at least the 2050s,” he says.

Hellyer says that uncertainty means Australia needs to think about complementary solutions to mitigate risk. In his view that would mean non-submarine solutions such as large uncrewed underwater vessels or a long-range strike aircraft such as the B-21 bomber, “depending on what the problem is we are trying to solve”. Others say it may mean Australia buying “off the shelf” conventionally powered submarines, depending on the role they need to fulfil.

In the ultimate squaring of the circle, might it also mean restarting work with France’s French Naval Group, given the time and money which has already been poured into the Attack-class submarines? 

If you have any information about this story you would like to pass on please contact David Hardaker via dhardaker@protonmail.com.

Should Australia worm its way out of the AUKUS deal and go crawling back to the French? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.