AUKUS Submarine Deal Risks Cannibalizing Other Defence Programs Without Budget Boost, Warns Former ADF Chief

Breaking Defence

SYDNEY — The AUKUS nuclear submarine program risks consuming funds needed for other critical defence priorities unless Australia’s defence budget is significantly increased, warned Sir Angus Houston, former head of the Australian Defence Force (ADF).

Speaking at the US Studies Centre, Houston emphasized that the escalating global security threats necessitate a boost in defence spending to at least 3% of GDP. He underscored that without this increase, the high costs of the AUKUS program — Australia’s collaboration with the US and UK to acquire nuclear-powered attack submarines — could erode other essential military capabilities.

Houston, who co-led the 2023 Defence Strategic Review (DSR), noted that the review’s projections, while ambitious, did not fully anticipate the rapidly evolving geopolitical challenges. These include the ongoing conflict in Ukraine, heightened tensions in the Middle East, China’s growing military assertiveness, and the strengthening alliance between China, North Korea, Russia, and Iran.

“When the strategy was published, I described Australia’s strategic circumstances as the most perilous since World War II. The situation has only intensified since then,” Houston stated.

Houston argued that to avoid compromising Australia’s broader defence readiness, the AUKUS submarines must represent a net addition to the country’s military capability. Achieving this, he insisted, is only possible with increased defence funding.

“The only way these submarines can be a net addition to Australian military capability is by increasing our defence spending to 3% or more of GDP as we move into and through the 2030s,” Houston said. “If not, the subs will come at the expense of other vital programs.”

Houston criticized the political establishment for failing to fully grasp the fiscal challenge posed by AUKUS. He warned that without bipartisan acknowledgment of the need for increased spending, Australia risks undermining its overall defence strategy.

The AUKUS program is set to become the most expensive defence endeavour in Australian history. Although officials have expressed confidence in the country’s ability to balance priorities, cracks are starting to show.

For example, earlier this month, Australia cancelled a $5.3 billion AUD satellite contract with Lockheed Martin. Analysts suggest this could be a precursor to further budget cuts as the true costs of the AUKUS program come to light.

Meanwhile, other defence leaders, like Richard Vagg, head of Land Capability for the ADF, have remained optimistic. Vagg recently told Breaking Defence that the ADF is “comfortable” with its investment plans, despite AUKUS concerns.

At the same event, US Deputy Secretary of State Kurt Campbell emphasized the importance of close cooperation between the US, Australia, and New Zealand to counter China’s growing influence. He urged the next US administration to prioritize strong regional partnerships.

As Australia grapples with the financial demands of AUKUS, Houston’s warning underscores the delicate balance required to bolster national security without sacrificing the broader needs of the defence force.

Without a clear path to increased funding, the challenge of maintaining a robust, balanced military may prove insurmountable.