Paul Keating rightly calls it the “worst deal in all history,” and the Albanese Government intends to use Australian taxpayer’s money to build up the US and UK submarine construction and ship repair industry. Rex Patrick looks into the AUKUS detail.
Under Article 4 of the United States Treasury Act, it is the US Treasury that receives and takes care of the United States Government’s money. The US Constitution demands that no money shall be drawn from the Treasury, unless it has been appropriated by law.
That means that Anthony Albanese can’t just write out a cheque and hand it to Joe Biden to spend on AUKUS. It takes a bit more than that.
Which the US Congress is now setting up. On 9 June this year, Democratic Congressman Gregory W Meeks introduced the AUKUS Undersea Defence Act into the House of Representatives which creates a special account in the US Treasury to be known as the “Submarine Special Activities Account” and grants lawful authority for the Secretary of Defense to spend the money in that special account for specific purposes.
The legislation doesn’t permit the United Kingdom to deposit into it, only Australia can. Paul Keating was right about the “Kabuki show in San Diego” where he observed,
there’s three leaders standing there. Only one is paying. Our bloke. Albo.
Improving the US submarine industrial base
US shipbuilders and maintainers have started laughing all the way to the bank.
And so they should. Until now, they’ve conspicuously failed to meet the expectations of their US Navy customer. Australia will inject money to help them meet their US customer’s requirements.
There are just two submarine shipbuilders in the US, General Dynamics’ Electric Boat Division of Groton, Connecticut, and Huntington Ingalls Industries’ Newport News Shipbuilding, of Newport News.
Between them, they currently build 2 Virginia submarines a year, in circumstances where the US needs them to be able to build two and an additional Columbia Class ballistic nuclear missile submarine) – the equivalent of building five Virginia submarines being built per year.
There are four government operated Naval Shipyards that conduct maintenance on US submarines. They’re supposed to ensure 80% of the active submarine fleet is available for use at any time. But the industry base is short of workers and facility constraints. They are only achieving 60% availability. They’re also encountering some very difficult to resolve technical problems with their submarines, spares parts and supply chain problems.
They’re also encountering some very difficult to resolve technical problems with their submarines, spares parts and supply chain problems.
Money is needed to fix these problems – a lot of money.
And that’s a big problem because there’s not a lot of US money lying around, especially noting their 33 trillion dollars of debt. So where is the US submarine industrial base going to get the money from?
It’s not hard to guess.
As the great American showman P.T. Barnum is reputed to have proclaimed, “There’s a sucker born every minute.”
In an unprecedented move, our Prime Minister has signed up to spending at least $3b Aussie dollars, and likely much more, on helping the United States solve their build and maintenance woes. That’s on top of paying directly for the eventual transfer of between three and five submarines from the US Navy inventory to Australia (although the AUKUS Undersea Defense Act only seeks to authorise the transfer of two).
It’s akin to going into a car dealership to buy a production model Audi and being told; you’ll have to not only pay for a second-hand vehicle but also pay for an upgrade of the production line at Ingolstadt, and contribute directly for upgrades to some of the servicing centres in and around Bavaria. Worst deal in all of history, indeed!
There will be no growth in Australian shipbuilding for a decade – all the action is taking place in the US and UK. Australian dollars are going to be poured into the US submarine industrial base. New hires are already happening.
Further beyond the Atlantic Ocean, the UK Government is about to sign an AUKUS detailed design and long lead item submarine contract with the shipyard, BAE Systems. We’ll pay for a lot of the UK activity and not get that much industry action in return.
Already there’s a lot of smiles at Barrow-in-Furness, where the submarines are built. They just can’t believe their luck. Our Defence Department has learned absolutely nothing from the failed industry growth experiences that were the French attack class submarine program and the UK’s Hunter Class frigate program.
And don’t think that the initial payment of $3 billion from Australian taxpayers will be the end of our subsidisation of US and UK ship builders.
That’s just the first drop of water on a very dry sponge.
Where are the jobs?
The work taking place in the United States and United Kingdom will help draw obvious attention to the lack of AUKUS work taking place in Australia.
Prime Minister Albanese tells Australians that the $368b program will bring about 20,000 jobs. But he won’t tell us when these jobs will come, or where.
That’s despite the Defence Department having at least two workforce planning documents sitting inside their filing cabinets. They have these taxpayer funded studies, but are refusing to release them under FOI, not for national security reasons, but just because they are not finalised.
It’s more likely the documents will confirm what most expect. AUKUS will be loaded up front with the exports of Australian dollars to the United States and the United Kingdom.
We know the docket but not the dock
The Government is trying to address the lack of work in Australia by commencing the build of a shipyard in Adelaide starting well before the submarines that are supposed to be built there are even designed. Remarkably, Adelaide’s Port River has never been assessed to be suitable for nuclear-powered warship visits, let alone nuclear submarine construction. But that inconvenient fact hasn’t yet got in the way of AUKUS politics.
Rest assured, Prime Minister Albanese will want to put on a hard hat and a safety vest to cut a ribbon at a new construction facility at Osborne before the next Federal election. He might be there to open little more than some fencing and a port-a-loo, but he’ll be there to proclaim an AUKUS jobs bonanza.
But for quite some time to come, it will be Australia dollars heading overseas and the jobs bonanza will be at Groton and Newport News in the US, and Barrow-in-Furness in the UK.
It’s all cart before horse stuff. But there’s very little common sense being applied to any of the decisions around this bankrupting program. P.T. Barnum was right. If he were alive today, he’d have folded his big tent and would be selling submarines.
Michael West Media