Extraordinary cost of submarine program reveals a confronting truth

The numbers are so big they make your eyes water and your breath catch in your throat.

It turns out all the impressive-sounding figures the experts have been using to estimate the cost of acquiring a fleet of nuclear-powered submarines – perhaps $100 billion, or maybe $200 billion – were low-balling it.

Instead, taxpayers can expect to spend between $268 billion and $368 billion over the next 30 years to develop a fleet of eight nuclear-powered submarines.

Overnight, news broke that the government would not provide a headline figure for the long-term cost of the new submarines. Instead, it would give only a cost over the next four years and an estimate of the project’s eventual share of gross domestic product. That would have been lily-livered but understandable given the vagaries of forecasting what the inflation rate will be decades from now.

In the end, courage prevailed. To its credit, the Albanese government decided not to hide the figure it knew everyone was desperate to know. Rather than obfuscation, it opted for radical honesty.

In doing so, it has delivered a course of electroshock therapy to the Australian public. The point of the exercise: to reveal the confronting truth that we are not at war, but neither are we at peace. Almost $400 billion, even over three decades, is not peacetime spending in anybody’s book – a fact that government ministers concede privately.

Almost as striking as the cost of the program is its speed. Acquiring nuclear-powered submarines will be a sprint as well as a marathon.

When the Morrison government announced the AUKUS pact 18 months ago, it looked like Australia would not acquire nuclear-powered submarines for two decades. That’s not true anymore. The government is pushing its foot to the accelerator by vowing to secure a Virginia-class submarine – the “apex predator” of the sea – from the US by 2033 plus two more by the end of the next decade. That would be an impressive accomplishment, moving the scheme from the never-never to the near term.

The urgency, on top of the dizzying price tag, reflects the fact we are navigating a dangerous and unpredictable new grey zone of superpower rivalry between China and the United States. It’s a contest in which we are poised to be a central player despite our geographical isolation and relatively small population.

AUKUS leaders: what they said

Accepting such a role will require tough spending decisions the nation as a whole is not yet ready to confront. Already, Opposition Leader Peter Dutton is flagging his willingness to support reduced spending on the National Disability Insurance Scheme to pay for the submarine program. Other unsettling tradeoffs will need to be discussed.

Even in the short term, before the big bills start arriving, difficult calls will have to be made. The submarine program is expected to cost $9 billion over the next four years, but the government believes the net cost to the defence budget will be zero.

That’s because – on top of the $6 billion saved by not proceeding with the previous French submarine deal – it will cut $3 billion from existing defence programs. More cuts will come with the release of the Defence Strategic Review next month. This is likely to anger other branches of the military such as the Army, while the Navy is lavished with money.

When announcing the details of the submarine program in San Diego, US President Joe Biden said the world stood at “an inflection point in history where the hard work of enhancing deterrence and promoting stability is going to affect the prospect of peace for decades to come”. It’s a line he often uses, but on this day it cut through with new resonance.

Prime Minister Anthony Albanese used his own language to convey the significance of the undertaking, saying that the “scale, complexity and economic significance of this investment is akin to the creation of the Australian automotive industry in the post-war period”.

The monumental price tag of the AUKUS pact has made it clear. We are not at war, but neither are we at peace.

( Information from politico.com was used in this report. Also if you have any problem of this article or if you need to remove this articles, please email here and we will delete this immediately. [email protected] )

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