Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

How will Australia pay for its $386 billion nuclear sub deal?

By Graham Young - posted Monday, 27 March 2023


Will the AUKUS nuclear subs consume the Australian budget? It's a good question. The expenditure is huge in Australian terms.

The total deal is currently worth $386 billion (US$260 billion) and will be spread out over 30 years. So, on average, it will cost $12 billion a year. This is about one-third of the annual defence budget, which is $38 billion.

The submarine acquisition will be the single largest piece of defence procurement ever, in absolute and percentage terms.

Advertisement

There is no way that this can be contained within the existing budget without cutting vital defence infrastructure and services, and restricting purchases of other necessary defence items.

So, the defence budget will need to grow.

These are some very rough figures that assume payments are made evenly over the life of the submarines. This is not a realistic scenario and costs will be understated at some stage and overstated at others.

It is illustrative, but there will be plenty of wiggle room for the federal treasurer along the way as to how he juggles the budget.

If you assume that the original contract with the French for diesel subs of $90 billion is more or less contained in the existing defence budget (because they were replacing the Collins-class subs which are already in service) then the additional annual cost of the AUKUS deal is somewhere in the vicinity of $10 billion per year, an increase in the defence budget of one-third.

Australia has a GDP of around $2.2 trillion and currently spends 1.8 percent of that on defence, just shy of the 2 percent that former Prime Minister Tony Abbott originally promised when the Coalition won in 2012.

Advertisement

The additional expenditure would make it 2.2 percent, which is the world average for military expenditure.

It is probable this is only the first instalment on increased defence expenditure.

A growing economy the best way to ensure our freedom

With increasing CCP belligerence in the South Pacific, and with Australia stepping into a role as a friendly and trusted counterweight, its military forces need to be reconfigured so it can project power, as well as better defend its borders. That will require a lot of retooling.

  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. All

This article was first published by the Epoch Times.



Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

10 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

Other articles by this Author

All articles by Graham Young

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Photo of Graham Young
Article Tools
Comment 10 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy