AUKUS Submarine Cost: $368 Billion and Counting, for Submarines Arriving in the 2040s
By Direct Democracy
What Is AUKUS, and What Did We Actually Sign Up For?
In September 2021, then-Prime Minister Scott Morrison stood alongside US President Joe Biden and UK Prime Minister Boris Johnson to announce AUKUS - a trilateral security partnership that would, among other things, deliver nuclear-powered submarines to the Royal Australian Navy.
At the time, the cost was vague. The benefits were described as transformational. The debate lasted roughly 48 hours before the media cycle moved on.
By March 2023, the Albanese Labor government had fleshed out the details under the "Optimal Pathway" plan. The updated cost estimate: $268 billion to $368 billion over the life of the program, according to the government's own figures. That's a range so wide it could fund the entire annual federal budget twice over at its upper end.
For that price, Australia will receive three to five Virginia-class submarines purchased from the United States, beginning around 2032 at the earliest, followed by a new class of vessel - the SSN-AUKUS - built in Adelaide, with the first Australian-built boat not expected until the early 2040s.
To put that in perspective: children starting primary school today will be finishing university before Australia's own submarines hit the water.
The Numbers That Should Make You Uncomfortable
Let's break down what we know:
| Item | Figure |
|---|---|
| Total estimated program cost | $268B–$368B (AUD) |
| Upfront contribution to US submarine industrial base | ~$4.6B USD (~$7B AUD) |
| Cost per SSN-AUKUS submarine (estimated) | ~$15–26B AUD each |
| Year first Australian-built submarine expected | Early 2040s |
| Current Australian defence budget (annual) | ~$56 billion |
| Medicare annual expenditure (approx.) | ~$32 billion |
| National Disability Insurance Scheme (annual) | ~$42 billion |
To fund AUKUS over two decades, Australia will spend more on submarines than it currently spends on Medicare in a decade. And that upper estimate of $368 billion is almost certainly conservative - major defence acquisitions in Australia have a proud tradition of blowing past their budgets. The Attack-class submarine contract with France (cancelled to make way for AUKUS) had already ballooned from $50 billion to $90 billion before it was torn up.
Why Is This Policy So Controversial?
The criticism of AUKUS comes from across the political spectrum, and it's substantive:
On cost and timing: - Independent economists and defence analysts have questioned whether the capability will arrive in time to be strategically relevant, given the pace of technological change in autonomous underwater systems. - The Strategic and Defence Studies Centre at ANU has raised concerns about opportunity costs - money spent on submarines cannot be spent on cyber, missiles, or regional diplomacy. - The Grattan Institute and others have noted the program crowds out domestic spending priorities for a generation.
On sovereignty: - Australia will be dependent on US congressional approval to receive Virginia-class boats. The US Navy is itself short of submarines. There is no legal guarantee delivery will happen on schedule. - Former Prime Minister Paul Keating - no small figure in Labor history - has called AUKUS "the worst deal in all history" and accused the government of surrendering Australian sovereignty to Washington.
On regional relationships: - Indonesia, Malaysia, and other regional neighbours have expressed concern. ASEAN issued a formal statement emphasising the importance of keeping Southeast Asia free from nuclear weapons and great-power competition. - China, Australia's largest trading partner, views the program as a direct provocation - with real potential consequences for trade and diplomacy.
On the non-proliferation risk: - Nuclear-powered submarines use highly enriched uranium. Australia will be the first non-nuclear-weapons state to operate them, setting a precedent that experts at the International Atomic Energy Agency (IAEA) have warned could undermine the Nuclear Non-Proliferation Treaty framework.
Who Benefits - and Why Does This Persist?
This is the question that doesn't get asked often enough.
The AUKUS submarine program is a windfall for US and UK defence contractors - Huntington Ingalls Industries, BAE Systems, and Rolls-Royce among them. Australian prime contractors including ASC (now part of a government-owned enterprise) and a constellation of defence industry suppliers also stand to gain substantially.
Defence industry lobby groups are among the most well-funded and well-connected in Canberra. Both major parties - Labor and the Coalition - have long-standing relationships with defence industry donors and former officials who now work as consultants and advocates for exactly these contracts.
Critically, both major parties support AUKUS. There is no meaningful parliamentary opposition. This is not because Australians overwhelmingly demanded nuclear submarines - there was no mandate sought, no referendum, no serious public consultation. The decision was made by a small group of ministers and officials and presented to the public as a fait accompli.
Polling by the Australia Institute and others has consistently shown that when Australians are asked to rank defence spending against healthcare, housing, education, and cost-of-living relief, submarines do not top the list.
What Would Voters Actually Choose?
This is exactly the kind of question a direct democracy should be asking.
When you put the real numbers to people - $368 billion, submarines in the 2040s, dependency on US congressional approval, regional diplomatic risk - support for the program drops significantly. Most Australians support a strong defence, but most Australians also have a GP they can't afford to see, a mortgage that's crushing them, and children in underfunded public schools.
The AUKUS submarine deal is a masterclass in how major policy decisions get made in Australia: behind closed doors, between allied governments and defence industry players, with minimal democratic input, and locked in so thoroughly that future governments claim they have no choice but to continue.
Direct democracy doesn't mean Australians would automatically vote against defence spending. It means they would actually get to weigh in - with real information, real trade-offs, and real consequences attached. That's a conversation neither major party wants to have.
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