The defining story of the next decade emerges

When Emmanuel Macron told me in October 2021 that Scott Morrison had lied to him over the ditching of a massive submarine contract between Australia and France, the extraordinary missive generated global headlines.

But overlooked amid the fallout was another comment by the French president. Speaking to Australian reporters on the sidelines of the G20 summit in Rome, Macron pointed out that the decision to abandon French submarines in favour of designing and building new boats via the freshly minted AUKUS agreement between Australia, the United States and United Kingdom had created one big problem.

Australia is expected to announce it will buy up to five Virginia-class nuclear submarines from the US as a stopgap.

Macron’s beef was that in tearing up the French contract, the Morrison government didn’t actually know what type of submarine it would now acquire – only that they would be nuclear-powered. The best Morrison could say was that the government would spend the next 18 months working out the details.

“With the French deal negotiated by Malcolm Turnbull, Australia had definitely the notion to produce in Australia conventional submarines and to get the submarines within a clear and reliable period of time,” Macron said. “Now, you have 18 months before a report. Good luck.”

He had a point. And to some extent still does.

Having considered its options, Australia appears to have settled on a hybrid model of buying and operating two types of submarines. The government is expected to buy up to five Virginia-class submarines from the US, which are expected to arrive in the 2030s. This will help fill the gap between the retirement of the ageing Collins class submarine fleet in 2038 and the arrival of another cluster of boats in the 2040s, likely designed and partly built in Britain based on a modified version of the UK’s next-generation Astute-class submarine.

The solution has been largely praised by defence experts and the federal opposition as a good outcome for Australia. But as Macron pointed out back in 2021, big questions remain.

For example, given the nuclear technology involved in the US and UK-designed boats and Australia’s lack of expertise in this area, will foreign officers have to be present on the submarines when they are in operation and if so, doesn’t that undermine our sovereignty? This is a key concern of former prime minister Turnbull, and a valid one.

There are also question marks over whether the US-designed and built Virginia-class submarines due to arrive in the 2030s will be brand new, or some second-hand. And what have we offered the US in return for the submarines?

Perhaps the biggest mystery is over the longer-term UK-designed fleet. If Australia has decided to pursue a model, the design of which has not been settled, how does it guarantee there won’t be cost overruns or delivery delays? Will any of the boats be built in Australia? And if they are, is it worth paying a premium for local production instead of just buying them outright from Britain?

Some of these questions will hopefully be answered on Tuesday, when Prime Minister Anthony Albanese, US President Joe Biden and British Prime Minister Rishi Sunak meet in San Diego to announce the terms of the deal.

For Australians going about their busy lives, the topic of submarine procurement may not seem particularly pressing. But this is a huge story.

Some analysts say the total cost of the submarine project may reach up to $170 billion, so big money is at stake here. The new fleet is also being procured at a time when our regional security situation is deteriorating. This week, China’s newish Foreign Minister, Qin Gang, accused the US of trying to contain and suppress China, and unless Washington changed course, “no amount of guardrails can stop the derailment and rollover into confrontation and conflict”.

China hates the AUKUS agreement but fails to acknowledge that Australia’s decision to buy nuclear-powered submarines is a direct result of Beijing’s extraordinary ramp up in defence spending over recent years. China has increased military spending by 7 per cent this year to 1.5 trillion yuan (about $300 billion), which includes an expansion of its own nuclear-powered sub fleet. The US has lifted its annual defence spending to $US817 billion ($1.2 trillion). Japan is also doubling its defence spending to counter what Prime Minister Fumio Kishida described as the “unprecedented strategic challenge” of China.

A crucial story is playing out in our backyard and the is determined to be upfront with our subscribers about what it all means. This can sometimes lead to uncomfortable reading.

This week we launched Red Alert, a three-part series by international and political editor Peter Hartcher and foreign affairs and national security correspondent Matthew Knott. These two exceptional reporters brought together a panel of five defence experts in Sydney recently to discuss the threats facing Australia, the gaps in our preparedness, and what we should think about doing in response.

The series has been hugely popular with subscribers, but it has also generated mixed feedback. Some people haven’t loved the series and that’s fine. The is a grown up masthead and we welcome your views, and have published many of them on our letters pages this week.

One of the most important aspects of the project was the joint statement signed by our five experts – in particular the first point, which reads: “We do not want war. We urgently want to strengthen Australia as a means of sustaining peace through deterrence. This is the demand of our tough strategic times. Complacency will increase the probability of conflict.”

I agree entirely, and strongly believe Red Alert has been an excellent and overdue contribution to the national discussion around the defining story of the next decade.

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