Tell us why high price of nuclear subs is good value for Australia

Beneath the razzle-dazzle of the long-awaited announcement of the plan for Australian nuclear-powered submarines, the so-called “optimal pathway” illustrates the adage, “Fast, good, cheap: you can only pick two.”

To naval watchers, and perhaps even some doubters, the first two objectives seem plausibly met. The much-feared “capability gap” as the Collins Class nears retirement in the late 2030s will overlap with US and UK submarine deployments to Australia, then with three-five Virginia-class boats purchased from America. This will be followed by the so-called SSN AUKUS class, to be jointly designed and built with the UK, using US technology.

Operating the best boats America has to offer, followed by the best the three nations can collectively come up with, won’t be without challenges. But it is also a fate far better than our decision-making in the last 15 years – replete with dramatic twists and turns – entitles us to.

Then there’s the third variable – cost. While no one thought nuclear submarines would be cheap, the new estimates are much higher than anyone predicted, with the full cost of the program, including construction and maintenance and service, reportedly ranging from $268 billion to $368 billion though to 2055.

While such estimates are necessarily rubbery over long timeframes, with inflation alone impossible to accurately estimate, it will clearly be well in excess of the often-quoted previous estimate of up to $171 billion.

So, while eye-wateringly expensive, are nuclear submarines for Australia good value? This would be where the Department of Defence should clearly state what the submarines will do: anti-ship and anti-submarine warfare, intelligence gathering, precision strikes against land-targets using on-board cruise missiles, and perhaps even the insertion of special forces such as reportedly occurred during the Timor Leste crisis in 1999.

But Defence privately admits the more they explain the actual operational value of submarines to the Australian public, the less value these stealthy assets may have in practice. An argument can be made, however, that between saying nothing or giving the game away, there is more to be gained by saying something.

On the strategic level, all three leaders talked about the rules-based order and a free and open Indo-Pacific, though only UK Prime Minister Rishi Sunak uttered the word “China”. Recent war games held by US think tank Centre for Strategic and International Studies suggested that Virginia Class submarines would be one of most decisive assets in defending Taiwan from an attack from the PRC.

While today’s announcement doesn’t pre-commit Australia to participation in the defence of Taiwan, it certainly enhances the possibility, and will therefore contribute to deterrence.

Instead, we heard a lot from the three leaders about jobs and promises of economic transformation. While appealing directly to citizens’ hip-pockets, it might be the least persuasive part of the plan, after similar claims were made by Australian leaders in 2016 about Naval Group and the Attack Class design, before it descended into a public tug-of-war over local content and investment.

While AUKUS’ so-called Pillar II initiative to co-operate on advanced technologies didn’t rate a mention from the leaders, it is in cyber, artificial intelligence, quantum technologies, undersea capabilities, and hypersonics and counter-hypersonics where defence economists say the most technological spill-over and benefits will be felt.

Of course, the purpose of these submarines is ultimately to protect every Australian – jobs, livelihoods, and indeed lives. Polling by the Lowy Institute showed Australians supported AUKUS when it was first announced, absent all detail.

The Australian government should feel proud of its intense efforts to deliver that detail, live up to the ambitions of pact, and meet the strategic challenges of the moment. But, within reason, a real conversation with the Australian people about the actual value of these submarines must take place.