Richard Marles (Corio, Australian Labor Party, Minister for Defence) Share this | Link to this | Hansard source

by leave—Last week, Prime Minister Albanese, US President Biden and UK Prime Minister Sunak announced the Optimal Pathway for Australia's acquisition of conventionally-armed, nuclear-powered submarines.

This was a historic event in our nation's history.

The acquisition of this formidable capability is the single biggest leap in Australia's defence capability.

It will see Australia become one of only seven nations to operate nuclear-powered submarines.

It will strengthen our capacity to defend Australia and its national interests.

And it will significantly enhance our contribution to the security and stability of the region.

While the starting point for Australia's acquisition of nuclear-powered submarines is our defence and national security needs, last week's announcement also represents the start of a transformative pathway for Australian industry, technology and scientific advancement.

Optimal Pathway

This will be a complex, multi-decade undertaking.

And the Parliament can be assured that the Albanese Government has adopted a methodical, phased approach that will build our capacity as a nation to safely and securely build, maintain and operate conventionally-armed, nuclear-powered submarines.

This plan will see Australia build a next-generation nuclear-powered submarine—known as SSN-AUKUS.

These submarines will be based on a UK design, incorporating the very best of Australian, US and UK technology.

Australia's next-generation submarines will be Australian sovereign assets, commanded by Australian officers, and under the sovereign control of Australia. And they will be built by Australian workers in South Australia.

SSN-AUKUS will be a common platform operated by both the UK and Australia, with two productions lines—one based at Barrow-in-Furness in the UK, and one based at Osborne in South Australia.

The first submarine will roll off the UK production line in the late 2030s for the Royal Navy. The first Australian submarine will be delivered in the early 2040s from Osborne.

Subsequent Australian submarines will roll off the Osborne production line at a three-yearly drumbeat.

This arrangement will spread the risk over two production lines and improve efficiencies, as we avoid a bespoke design and delivery model.

To reach this goal, we will need to build experience and expertise among Australian service personnel, workers and industry.

And that work starts right now.

From this year, Australian military and civilian personnel will begin embedding with the Royal Navy and the US Navy, and within UK and US submarine industrial bases, to accelerate the skills development of our workforce and sailors.

From this year, we will see an increased tempo of visits to Australia from UK and US nuclear-powered submarines.

From 2027, the UK and US will have a rotational presence at HMAS Stirling in Western Australia.

This will ultimately comprise one UK Astute class submarine and up to four US Virginia class submarines, and will be known as Submarine Rotational Force-West.

This rotational presence will be consistent with Australia's longstanding policy of no foreign bases on Australian soil.

The increased tempo of visits and rotational presence will enable Australia to grow the required submariner cohort to operate our own Virginia class submarines from the early 2030s.

Through this we will also grow the wider workforce within and beyond Defence that has the familiarity to work with nuclear-powered submarines.

This will accelerate our ability to become 'sovereign ready' as responsible nuclear stewards, managing this technology safely and securely to the highest international standards.

In the early 2030s, Australia will acquire its first of three Virginia class submarines.

The provision of these submarines is an unprecedented contribution to our defence capability by our US ally.

To facilitate this, and ensure Australia receives Virginia class submarines at the earliest opportunity, Australia will assist the US in improving its sustainment facilities to have more Virginia class submarines come out of maintenance and back into operational service.

We will also help improve the US submarine construction facilities to increase the production rate of new Virginia class submarines.

However, the amount we invest in our own industrial base will far exceed our investment in the US, both over the Forward Estimates and through the life of the program.

Ultimately the early purchase of the Virginia class submarines will ensure that there is no gap in our submarine capability as a result of a lost decade.

As with SSN-AUKUS, once the Virginia class submarines carry an Australian flag they will be sovereign Australian assets operating under the complete control of the Australian Government.

The Optimal Pathway reflects a truly trilateral partnership.

It will meet Australia's long-term defence needs, while creating tens of thousands of jobs and delivering benefits to our national economy for generations to come.

This pathway ensures a methodical, safe and secure transition from Australia's current diesel-electric Collins class submarines to the Australian-owned Virginia class submarines and finally to SSN-AUKUS—an Australian built nuclear-powered submarine.

Ultimately, this will see the Royal Australian Navy operate a fleet of eight nuclear-powered submarines by the mid-2050s.

Nuclear stewardship

As we become 'sovereign ready' to operate nuclear-powered submarines it will be essential that we also become responsible nuclear stewards.

This will mean developing the full suite of skills, facilities and institutions along with an appropriate regulatory and legislative architecture to be nuclear stewards.

The Government will establish a new dedicated executive agency responsible for delivering the Optimal Pathway for Australia's nuclear-powered submarine program.

This agency will be responsible for delivering the entire nuclear enterprise.

As a responsible nuclear steward, the Government will also establish an independent regulator, responsible for regulating the nuclear-powered submarine enterprise.

Legislation will be required to underpin the nuclear enterprise and its regulation.

Nuclear waste

Australia has maintained regular, close engagement with the International Atomic Energy Agency—the IAEA—throughout the development of the Optimal Pathway.

Australia will meet its non-proliferation obligations and commitments under the Treaty for the Non-Proliferation of Nuclear Weapons.

The Government has been clear throughout this process: Australia does not want to, and will not, acquire nuclear weapons.

We are working with the IAEA to place the bar at its highest when one country shares nuclear naval propulsion technology with another.

Australia will work within the framework of our Comprehensive Safeguards Agreement and Additional Protocol with the IAEA.

Director General Grossi's remarks following the announcement last week reinforced that work will continue to enable the IAEA to exercise its verification and safeguards mandate in an impartial, objective and technical manner.

As part of satisfying our obligations, Australia has committed to manage all radioactive waste generated through the acquisition and operation of our nuclear-powered submarines.

This is a complex task, but we have time to get it right.

To be clear, we will not have to dispose of the first reactor from our nuclear-powered submarines until the 2050s.

Within the next 12 months, we will set out the process by which we will identify potential locations on the current or future Defence estate for storage and disposal of this waste.

I want to assure the Parliament that there will be appropriate public consultation, particularly with First Nations communities to respect and protect cultural heritage.

This will not be a matter of set and forget. We will continue talking to the Australian people about why we are undertaking this transformational endeavour.

International engagement

Engaging in a transparent and open way with our partners in the region is central to our approach to AUKUS. By building confidence and trust with our partners, we can better support a sovereign and resilient Indo-Pacific region.

That is why in the lead up to the announcement, it was a priority for our Government to talk to our partners in the region and beyond.

This announcement did not come as a surprise to them.

The Prime Minister, myself, the Minister for Foreign Affairs, and the Minister for International Development and the Pacific made over 60 calls to our counterparts.

Since our announcement last Monday their reaction demonstrates the genuine appreciation they have for the transparency we have shown, but also an understanding of why Australia is making this decision.

Australia remains fully committed to the South Pacific Nuclear Free Zone Treaty, known as the Treaty of Rarotonga.

Our AUKUS partners recognise Australia's obligations under international law, including the Treaty of Rarotonga. Every aspect of the Optimal Pathway will be consistent with those obligations.

Industry, jobs and opportunity

While our future nuclear-powered submarines will be the single biggest acquisition in Australia's Defence history, it also offers so much more for Australia: for jobs, for industry and for investment.

This is an exciting pathway, which will require a truly whole-of-nation effort.

It will be one of the greatest industrial endeavours Australia has ever undertaken—rivalling the likes of the Snowy Hydro Scheme or the establishment of the Australian automotive industry.

Over the next 30 years, this project will create around 20,000 direct jobs; see $30 billion invested in Australia's industrial base; and result in massive infrastructure upgrades and expansion amounting up to $18 billion.

This project will transform our skills, productivity, industrial capacity and science and research capabilities.

Workers will benefit from massive investments to boost skills and training. We will invest $6 billion in uplifting Australian industry, infrastructure and workforce over the next four years.

In South Australia, which will remain the home of submarine construction in Australia, we will invest $10 billion in expanding infrastructure over the next 10 years.

At its peak, up to 4,000 workers will be employed to design and build the infrastructure at Osborne. A further 4,000 to 5,500 jobs are expected to be created to build the submarines.

In Western Australia, the home of Australia's submarine fleet, we will invest up to $8 billion over the next decade in expanding infrastructure at HMAS Stirling, creating around 3,000 direct jobs.

We expect a further 500 additional jobs to sustain the Submarine Rotational Force—West from as early as 2027.

There will be opportunities for industry across the country to support not only Australia's industrial requirements, but also the industrial bases and supply chains for the UK and the US.

This work begins now: to expand and upskill our workforce; to invest in our industrial base across Australia; and to build the infrastructure required for decades to come.

Capability

Acquiring nuclear-powered submarines is a game changer for our capability and posture.

To be clear, the Collins class is a potent, highly capable diesel-electric submarine. We will extend the life of the Collins class submarines from 2026 so that they remain an effective capability until they are withdrawn from service.

But as we look ahead to the 2030s and beyond, the reality is that diesel-electric submarines will be increasingly detectable as they surface to recharge their batteries.

That will necessarily diminish their capability.

By the 2030s and 2040s, the only capable long-range submarine able to effectively operate in our ocean environment will be nuclear-powered submarines.

These submarines have the capacity to remain submerged and deployed for months, making them incredibly hard to detect.

As a corollary of their speed, stealth and endurance, a nuclear-powered submarine puts the biggest possible question mark in the mind of any potential adversary.

This is a capability that will make Australia a more difficult and costly target for anyone who wishes us harm.

Strategic Rationale

We are facing the most complex strategic circumstances since the Second World War.

Our national interest and our national security extends beyond our shoreline. As an island trading nation, we are highly dependent on global trade.

Since the Hawke-Keating Government opened up the Australian economy in the early 1990s, ushering in three decades of uninterrupted economic growth and prosperity, trade has become even more vital to our way of life.

That has brought tremendous benefits, reducing the cost of commodities and products, and expanding opportunities for Australian industry, jobs and growth.

But with that connectedness comes a reliance on maintaining that access.

Almost 99 per cent of our trade by volume passes by sea.

In 1990, trade represented 32 per cent of our GDP; by 2020 it was 45 per cent of our GDP.

The practical impact of this can be seen in just one example.

In the 1990s, we had eight oil refineries which were producing most of our liquid fuels on shore.

Today, we have two. Most of our liquid fuels we import, indeed, most of what we use, we import from one country: Singapore.

One doesn't have to think hard to see what the impact would be if just this one trade route was disrupted by an adversary.

Our interests lie in an open, stable and peaceful region.

And so the defence of Australia doesn't mean much without the security of our region and a settled global rules-based order.

As geo-strategic competition intensifies, we must act quickly to maintain balance.

Therefore, at the heart of Australia's strategic intent behind acquiring a nuclear-powered submarine capability is to make our contribution to the collective security of our region, and to the maintenance of the global rules-based order, which is so fundamental to Australia's future.

Increasing our military capability sits alongside our diplomatic efforts, promoting positive incentives for peaceful engagement in the region.

Clearly our future nuclear-powered submarines will be highly capable in conflict.

Any adversary who wishes us harm by disrupting our connection with the world will be given pause for thought.

But at the end of the day the true purpose of our nuclear-powered submarines will be to significantly enhance Australia's contribution to the stability, the security and, the peace of our region.

I want to assure the parliament that there will be appropriate public consultation, particularly with First Nations communities to respect and protect cultural heritage.

This will not be a matter of set and forget. We will continue talking to the Australian people about why we are undertaking this transformational endeavour.

International engagement

Engaging in a transparent and open way with our partners in the region is central to our approach to AUKUS. By building confidence and trust with our partners, we can better support a sovereign and resilient Indo-Pacific region.

That's why in the lead-up to the announcement, it was a priority for our government to talk to our partners in the region and beyond.

This announcement did not come as a surprise to any of them.

The Prime Minister, myself, the Minister for Foreign Affairs, and the Minister for International Development and the Pacific made over 60 calls to our counterparts.

Since our announcement last Monday their reaction demonstrates the genuine appreciation they have for the transparency that we have shown, but also an understanding of why Australia is making this decision.

Australia remains fully committed to the South Pacific Nuclear Free Zone Treaty, known as the Treaty of Rarotonga.

Our AUKUS partners recognise Australia's obligations under international law, including the Treaty of Rarotonga. Every aspect of the Optimal Pathway will be consistent with those obligations.

Industry, jobs and opportunity

While our future nuclear-powered submarines will be the single biggest acquisition in Australia's defence history, it also offers so much more for Australia: for jobs, for industry and for investment.

This is an exciting pathway, which will require a truly whole-of-nation effort.

It will be one of the greatest industrial endeavours Australia has ever undertaken—rivalling the likes of the Snowy Hydro scheme or the establishment of the Australian automotive industry.

Over the next 30 years, this project will create around 20,000 direct jobs; see $30 billion invested in Australia's industrial base; and result in massive infrastructure upgrades and expansion amounting up to $18 billion.

This project will transform our skills, productivity, industrial capacity, and science and research capabilities.

Workers will benefit from massive investments to boost skills and training. We will invest $6 billion in uplifting Australian industry, infrastructure and workforce over the next four years.

In South Australia, which will remain the home of submarine construction in Australia, we will invest $10 billion in expanding infrastructure over the next 10 years.

At its peak, up to 4,000 workers will be employed to design and build the infrastructure at Osborne. A further 4,000 to 5½ thousand jobs are expected to be created to build the submarines.

In Western Australia, the home of Australia's submarine fleet, we will invest up to $8 billion over the next decade in expanding infrastructure at HMAS Stirling, creating around 3,000 direct jobs. We expect a further 500 additional jobs to sustain the Submarine Rotational Force—West from as early as 2027.

There will be opportunities for industry across the country to support not only Australia's industrial requirements but also the industrial bases and supply chains for the UK and US.

This work begins now: to expand and upskill our workforce; to invest in our industrial base across Australia; and to build the infrastructure required for decades to come.

Capability

Acquiring nuclear-powered submarines is a game changer for our capability and for our posture.

To be clear, the Collins class is a potent and highly capable diesel-electric submarine. We will extend the life of the Collins class submarines from 2026 so that they remain an effective capability until they are withdrawn from service.

But, as we look ahead to the 2030s and beyond, the reality is that a diesel-electric submarine will be increasingly detectable as they surface to recharge their batteries.

That will necessarily diminish its capability.

By the 2030s and 2040s, the only capable long-range submarine able to effectively operate in our ocean environment will be a nuclear-powered submarine.

These submarines have the capacity to remain submerged and deployed for months, making them incredibly hard to detect.

As a corollary of their speed, stealth and endurance, a nuclear powered submarine puts the biggest possible question mark in the mind of any potential adversary.

This is a capability that will make Australia a more difficult and more costly target for anyone who wishes us harm.

Strategic rationale

We are facing the most complex strategic circumstances since the Second World War.

Our national interest and our national security extend beyond our shoreline. As an island trading nation, we are highly dependent on global trade.

Since the Hawke-Keating government opened up the Australian economy in the early 1990s, ushering in three decades of uninterrupted economic growth and prosperity, trade has become an even more vital way of life for us.

That has brought us tremendous benefits, reducing the cost of commodities and products, and expanding opportunities for Australian industry, jobs and growth.

But with that connectedness comes a reliance on maintaining that access.

Almost 99 per cent of our trade by volume passes by sea.

In 1990, trade represented 32 per cent of our GDP; by 2020 it was 45 per cent of our GDP.

The practical impact of this can be seen in just one example.

In the 1990s, we had eight oil refineries which were producing most of our liquid fuel needs on shore.

Today, we have just two. Most of our liquid fuels we import. Indeed, most of what we use we import from one country: Singapore.

One doesn't have to think hard to see what the impact would be if just this one trade route was disrupted by an adversary.

Our interests lie in an open, stable and peaceful region.

And so the defence of Australia doesn't mean much without the security of our region and a settled global rules based order.

As geostrategic competition intensifies, we must act quickly to maintain balance.

Therefore, at the heart of Australia's strategic intent behind acquiring a nuclear powered submarine capability is to make our contribution to the collective security of our region, and to the maintenance of the global rules based order, which is so fundamental to our nation's future.

Increasing our military capability sits aside our diplomatic efforts promoting positive incentives for peaceful engagement in the region.

Clearly our future nuclear powered submarines will be highly capable in conflict. Any adversary who wishes us harm by disrupting our connection with the world will be given pause for thought.

But at the end of the day the true purpose of our nuclear powered submarines will be to significantly enhance Australia's contribution to the stability, to the security and to the peace of our region.

Andrew Hastie (Canning, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

I thank the minister for his statement. Let me begin where he ended, in highlighting the uplift in capability that our future conventionally armed nuclear-powered submarines will give the Royal Australian Navy. The Virginia class submarines and our future SSN AUKUS, complete with the same vertical missile system, combat system, torpedos and sealed reactor, will give us a formidable capability edge that will protect not only Australia but also our neighbours who seek a secure, peaceful and prosperous future.

It is true that we are a trading nation. Our prosperity is tied to the oceans, and our sea lanes and lines of communication must be protected, and any potential adversaries must be deterred. It's a law of the universe that deterrence only works when your adversaries fear your counterpunch, and the vertical launch missile system will give pause to those who contemplate breaching the peace.

The Virginia class submarine operating clandestinely and undetected can launch a salvo of 16 Tomahawk missiles simultaneously and ring someone's bell out beyond 2,000 kilometres. That fact alone will change the risk calculus for a potential adversary. It will keep them off balance, guessing and wondering about the wisdom of breaching the peace. This capability will induce a cold sweat on the bridge of a hostile naval vessel threatening our security, and that is a good thing because it will help preserve and uphold the peace in our region.

The past year has shown us why deterrence matters. Russia's unprovoked and illegal invasion of Ukraine reminds us that we need to be vigilant and that we need to invest in our security and that of our neighbours. Our Ukrainian friends have shown us why a powerful counterpunch is so important, and we are heeding their lesson with the acquisition of conventionally-armed nuclear-powered submarines.

Before I move on, I want to say something about the special operations capability in our future nuclear submarines. The Virginia class and SSN-AUKUS will give a massive lift to our force projection for our special operations capability. Not only will the Virginia class submarines be able to accommodate a special operations element for extended periods of time, but the nine-man lockout capability will also provide government with clandestine insertion and extraction options if the need arises. We don't have this capability at the moment. In my previous career, I was an assault swimmer at the SASR and I have conducted multiswimmer release from a Collins class submarine during training. It is a makeshift and risky task, swimming out of a submarine casing at four to six metres of depth from an underway boat. Not only that, but the Collins has to snort prior to conducting the multiswimmer release. That of course poses issues for the signature management of the submarine, which is why we are transitioning away from fossil fuels to renewable energy on our submarines.

The Virginia class submarine resolves the special operations insertion and extraction challenge, and I'm excited about this step up in capability. Indeed, the AUKUS special operations capability will complement the over $250 million investment into Campbell Barracks made by the former coalition government, including the upgrade of the operations centre into one of the biggest top-secret facilities in this country. I also think, in the wake of the turbulent past few years, post Brereton, it's important that the SASR has a clear sense of purpose and mission, and this emerging water operations capability, which will be accelerated by the UK-US forward rotation from 2027 at HMAS Stirling, will certainly bring that purpose and mission.

The minister has made a comprehensive speech covering the details of the AUKUS announcement of last week. I won't traverse the same terrain, for the benefit of the House, but I will restate what the opposition leader said last week: we support AUKUS, come hell or high water, on the coalition benches. We are proud of our role in AUKUS and the way we negotiated it with the Biden administration and the Johnston government back in 2021. AUKUS is a truly historic achievement. It was only possible because we restored defence spending to two per cent of GDP and rebuilt our sovereign shipbuilding capability. This in turn rebuilt the confidence of our allies that we were a partner who takes defence seriously and who could be trusted with the sensitive nuclear technology transfer that is at the heart of AUKUS.

We will work with the government to make sure that we hit the crucial milestones, that we are ready to receive the forward rotation in 2027, and that we are sovereign ready, next decade, to own, operate, maintain and regulate a reactor as we receive our Virginia class submarine in 2033. But we are in opposition and we do have questions about AUKUS, especially how it will be funded. The Deputy Prime Minister has covered a lot of detail in his remarks today, but he has not mentioned the defence budget. This will be the largest capability acquisition that Australia has embarked on, but the Deputy Prime Minister has not addressed the cost of the project. I'm calling on the Albanese government to have a frank and honest conversation with Australians about the significant investment this decision represents to the national budget and defence spending. As the Leader of the Opposition has said, there is a cost to preserving peace, and the government should be honest about that. It is vitally important that the Australian people understand this and that we build trust with them on this journey, from a bipartisan perspective. Governments will change over the life of this project. We need to build financial continuity so that AUKUS will survive the political cycles of our democratic system.

It's not credible for the Labor government to say that there is no net impact on the budget, even over the forward estimates. The government has announced that $9 billion will be spent on progressing AUKUS over the next four years. They claim to be spending up to $6 billion over the next four years on Australian industry and workforce to support AUKUS. It's a good headline, but we need detail. Eight billion dollars has been announced in the deal for infrastructure in my home state of Western Australia, but in truth only $1 billion of that will be seen by 2027, when Submarine Rotational Force West will commence. It will need much more investment to realise the transition of HMAS Stirling from a conventional submarine base to a nuclear one.

We are also concerned about to opportunity costs in our defence capability. What capabilities are being cut by $3 billion from the existing Defence Integrated Investment Program to offset the AUKUS investments? Who is going to bear the brunt of these costs? These questions need to be answered. Cancellation of defence projects will result in lost regional spending, lost jobs and lost investment for defence industry. There are always tough decisions for government in managing the defence budget. Scarcity is a problem we all deal with and we cannot avoid. But the Deputy Prime Minister needs to be clear about how he will fund the $34 billion needed in addition to the existing $24 billion provisioned for a submarine program over the next 10 years to deliver AUKUS. Will the Albanese government cannibalise the Army or Air Force or Navy or ASD to pay for AUKUS? These are vital questions. We need answers. Labor have committed to a major undertaking, taking the next step in our AUKUS agreement, and they need to explain to Australians how they'll pay for it.

Finally, a few words about unity and AUKUS. This program does have significant risks. We have our own domestic challenges. There are political, industry and workforce risks. Then there are defence delays—all too common now, as the Productivity Commission outlined. We also have the challenge of working alongside two other countries, the US and the UK—both robust democracies with their own domestic political issues to deal with. The United States is critical to AUKUS and the delivery of our submarines. Everyone in this House will need to work on our relationship with the US Congress—everyone. To everyone, each one of us: at every opportunity, when you have the opportunity to speak to a US congressman or senator, you need to be closing on AUKUS with our American colleagues, because our Virginia-class submarines are still pending congressional approval. We need to maintain a very tight weave with our American friends. Our strategic adversaries know this and will seek to undermine this goodwill and this relationship, and we will need to act in the national interest and maintain good relations with the US regardless of political affiliation or government. This project depends upon it. By the way, I haven't even touched upon pillar 2 of AUKUS, with the export controls that need to be negotiated to realise its full potential.

In closing—and noting the kids up there; welcome to parliament!—this is a multidecade, multigenerational, nation-building task. You kids will probably have jobs in AUKUS in the next 15 to 20 years; that's exciting! We look forward to working with this government on a bipartisan basis to make it happen.