Pearls and Irritations

Despite continuing optimism from Prime Minister Albanese and Defence Minister Marles and the defence commentariat about the AUKUS submarine deal it continues to attract significant uncertainty and doubt in the wider community. This centres around issues such as sovereignty , our industrial capability to manage the construction and longer term maintenance and the massive donation ( over $A4 billion) to the US’s own worrying ailing defence industry.

Importantly, the US has not been oblivious to the urgent need to try to counter these concerns and now has a comprehensive program very much in full swing aimed at stiffening up Australian public support for AUKUS – and the Alliance more generally. The State Department’s extensive “2024 Integrated Country Strategy for Australia” is replete with efforts to widen and “diversify” Australian support for AUKUS and the Alliance – especially among students and younger generations.

Here the United States Studies Centres at universities in Sydney and Perth ( and who receive funding from the US Government among others) play an important role. Entering into the domestic political scene recently, the USSC’s Peter Dean wrote an article (  “Anti-Aukus coalition is splintered and confused about progress of submarines and industrial base “) demeaning Australians who expressed doubts about AUKUS – and especially the submarines – as the “doomsday preppers” – so appropriately an American TV characterisation! He also quoted a “defence analyst” as talking of the “reptilian pile-on against AUKUS in Australia has been something to behold”.

This US push has also been evidenced by the veritable conga chain of senior American officials and military recently gracing our shores to deliver pep talks and promote rallying endorsements through our drip fed media. Some of which would likely amount to inappropriate interference in our domestic political scene by many other foreign governments or agencs . A primary US objective has been to seek to rebut continuing concerns among many Australians about the loss of sovereignty the AUKUS submarine deal inevitably entails. Take for example, the Deputy Commander of US Indo-Pacific Command, Lieutenant General Stephen Sklenka, in a recent address to the National Press Club reportedly claimed that Australia will not automatically be dragged into any future conflict with China despite growing integration between both militaries under the AUKUS partnership.

That was a deliberately concocted attempt to mislead Australian public opinion as it is abundantly clear that we are already wedged so that inevitably we would be unable to avoid being drawn into any military conflict between the US and China – such as over Taiwan. The facts are that :

• A pivotal issue for gaining US Congressional support for the SSN deal was that the sale to Australia must not degrade the USN’s own IndoPacific submarine capability – in an environment of serious doubt about US industry capability to meet even its own large construction and maintenance targets.
• This was underlined graphically at the 2024 Sea-Air-Space exposition, by Vice Admiral Robert Gaucher (US Commander Naval Submarine Forces) who claimed the agreement would not lead to a drop in the availability of long-range, nuclear-powered submarines required when the allies’ numbers are counted in addition to the United States !
• Over 400 RAN personnel are being fully integrated into the operational USN fleet of 25 SSN’s in the first phase of AUKUS. Significant numbers of Australian Defence and Intelligence personnel have also already been embedded into the various US agencies responsible for planning IndoPacific military strategy.
• Any proposition that Australia needed these extraordinarily expensive and complex nuclear prolled vessels was for independent use against China is dangerously farcical. What other potential threat would we need them for? We would not be able to deploy them  against China without the massive support of the US in protective cover , intelligence, logistics, resupply, maintenance and repair well away from Australia and so on. Almost certainly our submarines would need to be deployed in conjunction with the USN in any military confrontation with China. Again as expressed by Gaucher :“if there’s a problem they can phone home.(ed. by which of course he means the US!)”. And let us not forget that.

As a recent article in the credible Foreign Policy reported, another concerning element of the US “ no degrading” equation continues to be the failure of its own defence industry to meet USN demands :
“After decades of strategic drift and costly acquisition failures, the U.S. Navy is sailing straight into a storm it can’t avoid. Despite the Defense Department’s lip service about China being the “pacing challenge,” decades of deindustrialization and policymakers’ failure to prioritize among services and threats have left the Navy ill-equipped to endure a sustained high-intensity conflict in the Pacific. The United States is unable to keep pace with Chinese shipbuilding and will fall even further behind in the coming years.”

It pointed out that “fiscal constraints are forcing the Navy to cut procurement requests, delay modernization programs, and retire ships early. The Navy’s budget for the 2025 fiscal year calls for decommissioning 19 ships—including three nuclear-powered attack submarines and four guided-missile cruisers—while procuring only six new vessels.” The two shipyards involved are delivering 1.3 boats annually and the USN budget proposal only calls for one new Virginia SSN.
In addition, “Workforce shortages and supply chain issues are also limiting shipbuilding capacity. ……The Navy needs more shipyard capacity, but finding enough qualified workers for the yards remains the biggest barrier to expanding production. The shipbuilding industry is struggling to attract talent, losing out to fast food restaurants that offer better pay and benefits for entry-level employees. At bottom, it is a lack of welders, not widgets, that must be overcome if the U.S. Navy is to grow its fleet.”

All of which led the Secretary of the Navy (Del Toro) earlier this year to call for a major internal review of naval shipbuilding which demonstrated that the situation is progressively worsening. In fronting Congressional challenges about this concerning scene Del Toro is quoted as saying that he spends 75% of his time on the shipbuilding problem. Some US analysts argue that The 20-year Shipyard Infrastructure Optimization Program aimed at upgrading dry docks, facilities, and equipment costing well over the projected $21 billion is only intended to maximize existing U.S. industrial capacity and won’t do much to close the enormous shipbuilding gap with China.

Faced with this gloomy outlook, Del Toro has been actively trying to attract foreign support for the USN’s shipbuilding and maintenance urgent needs. Earlier this year he visited Japan and the ROK to promote their investment in the US naval shipbuilding industry and outsourcing of USN naval repair and maintenance. Similar arrangements were made last year with India on maintenance and repair.

Incidentally, in a more recent Congressional appearance there was criticism levelled at the US Defence Industry for the lengthy construction delays and mismanagement of funds paid to it by the USN. This also when Transparency International earlier this year ( “Blissfully Blind: The new US push for defence industrial collaboration with partner countries and its corruption risks” warned:
“The rise in global insecurity is pushing many US security partner countries to reignite or revise a familiar but risky approach to expanding national defence industrial capabilities. Sometimes referred to as ‘defence offsets’ or ‘industrial participation’, this approach requires foreign defence companies to invest in the local economies of countries as a condition for the purchase of major weapons systems. Defence offsets can benefit local defence industries, but they also contain many aspects that make them particularly vulnerable to corruption. US defence companies are rapidly responding to these partner demands with increasing US government support and within an incredibly lax US regulatory environment.”

All of which is directly relevant to the over $A 4 billion donation which Australia is committed, under the AUKUS deal, to making to the US Defence industry separate to the other huge payments for the submarines and the associated costs.
Not surprisingly given the track record, few details have yet emerged about how this gift is to be made other than that the funds are to be channelled through Navy Secretary Del Toro who will be responsible for deciding on their allocation between US defence companies. Early indications are that all the funds will not necessarily be allocated to the actual construction of the Australian submarines.

The risks of corruption in the US Defence industry have been so well documented over many years. Another recent Transparency International paper (“US Private Military and Security Companies (PMSC) fuel corruption and conflict risk”) detailed how some of the largest U.S. PMSC companies score poorly on their overall commitment to anti-corruption and corporate transparency, including their commitment to reduce corruption in supply chains, agents, conflicts of interest and political contributions.

Our relevant institutions are bound to be challenged in trying to protect this extraordinary donation of taxpayers’ money.

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