Introduction

The AUKUS pact, a trilateral security partnership between Australia, the United States, and the United Kingdom, was announced in September 2021. This agreement, primarily focused on Australia’s acquisition of nuclear-powered submarines, has been heralded as a vital element of Indo-Pacific security, aimed at countering China’s expanding influence. However, the deal has ignited significant controversy within Australia, with critics asserting that it compromises national sovereignty, escalates regional tensions, and imposes unsustainable financial burdens. Opposition Leader Peter Dutton, who was Defence Minister at the time of the deal’s negotiation, has claimed credit for its establishment, suggesting that then-US President Joe Biden was initially resistant, but was eventually persuaded by the Morrison government. This analysis critically examines the AUKUS deal, evaluating its strategic, economic, and political implications, and argues that it is fundamentally a bad deal for Australia due to its risks to sovereignty, financial costs, and potential to destabilise the region.

Background of the AUKUS Deal

The AUKUS agreement arose from Australia’s decision to abandon a $90 billion contract with France for conventional submarines, opting instead for nuclear-powered submarines from the US and UK. Announced by then-Australian Prime Minister Scott Morrison, US President Joe Biden, and UK Prime Minister Boris Johnson, the deal aims to deliver at least eight nuclear-powered submarines to Australia, with the first Virginia-class submarines expected in the early 2030s, followed by the SSN-AUKUS submarines constructed in Adelaide starting in the 2040s. The partnership also encompasses collaboration on advanced technologies, including artificial intelligence and cyber capabilities.

Peter Dutton has emphasised his role in securing the deal, asserting that Biden was initially reluctant. This narrative suggests a degree of Australian agency in negotiations but raises concerns about the US’s commitment and the long-term viability of the deal, especially given the changing nature of US administrations.

Strategic Implications: Sovereignty and Regional Stability

Loss of Sovereignty

A significant criticism of AUKUS is its potential to undermine Australia’s sovereignty. Critics, including former Prime Minister Paul Keating, argue that the deal effectively subordinates Australia to US strategic interests, transforming the nation into a “continental extension of American power.” The nuclear-powered submarines, while operated by Australia, rely heavily on US and UK technology, maintenance, and approval. The transfer of Virginia-class submarines necessitates US Congressional approval, and Australia has committed billions to bolster the US submarine industrial base. This dependency raises serious concerns about Australia’s ability to independently control its defense assets.

Greens Senator David Shoebridge has warned of “secret undertakings” that could dictate the operational use of Australia’s submarines, potentially obligating the country to align with US military objectives, such as operations in the Taiwan Strait. Former Foreign Minister Gareth Evans has raised alarms about Australia’s “sovereign agency,” questioning whether the submarines will genuinely be under Australian control. The lack of transparency surrounding the agreement, with critical details disclosed through US announcements rather than Australian ones, further fuels suspicions of an unequal partnership.

Escalation of Regional Tensions

AUKUS is widely viewed as a response to China’s military expansion in the Indo-Pacific, though its supporters often avoid explicitly naming Beijing. China has vocally condemned the deal, claiming it violates the Nuclear Non-Proliferation Treaty and exacerbates an arms race. Retired Chinese Colonel Zhou Bo has stated, “There’s no doubt for anybody here in China, we don’t like it from the very beginning.” This deal risks escalating tensions in an already volatile region, potentially drawing Australia into conflicts it might otherwise avoid, particularly a US-China confrontation over Taiwan.

Countries like Malaysia and Indonesia have expressed concerns about AUKUS, fearing it could de-stabilise Southeast Asia. The agreement’s focus on military buildup is at odds with Australia’s historical role as a middle power advocating for diplomacy and de-escalation. Paul Keating has argued that Australia should foster closer ties with China, its largest trading partner, rather than aligning so closely with the US and UK, which he views as unnecessarily provocative.

Economic Costs: A Financial Burden

Staggering Price Tag

The AUKUS deal is projected to cost between $268 billion and $368 billion over the next three decades, making it Australia’s largest defence investment. This staggering figure includes $9 billion over the next four years, $50–58 billion in the next decade, and ongoing costs until 2075. Critics, including Keating, have dubbed it “the worst deal in all history,” emphasising that $368 billion for eight submarines is disproportionate compared to other defence priorities.

The financial burden raises pressing questions about affordability, particularly given Australia’s budget constraints. Treasurer Jim Chalmers has claimed the deal will yield economic returns, yet the government has not clarified how it will offset these costs without cutting essential services like Medicare, the NDIS, or education. Greens Senator David Shoebridge has warned that the deal could necessitate “austerity budgets” to divert billions offshore to US and UK defense industries.

Opportunity Costs

The massive expenditure on AUKUS diverts resources from other critical needs. For instance, Australia’s aging Collins-class submarines require costly life extensions to bridge the capability gap until the 2030s, further straining the defence budget. Investments in health, education, housing, and climate resilience could be compromised, disproportionately affecting vulnerable communities. Critics argue that the deal prioritises military prestige over domestic welfare, a concern echoed by independent MP Allegra Spender, who has called for greater transparency and parliamentary scrutiny.

Economic Dependence on US and UK

Australia’s $4 billion commitment to the UK’s submarine design and billions to the US industrial base underscore the deal’s economic asymmetry. While proponents like South Australian Premier Peter Malinauskas argue that AUKUS will create jobs – such as 4,000 in construction yards and 5,500 in submarine building – the benefits are long-term and uncertain. In contrast, the immediate financial outflow to foreign defence contractors risks deepening Australia’s reliance on US and UK industries, hindering the development of a self-sufficient defense sector.

Political Risks: Domestic and International

Domestic Political Fallout

While the AUKUS deal enjoys bipartisan support, with both the Labor government and the Coalition endorsing it, this consensus has stifled meaningful debate, leaving many Australians feeling uninformed about its implications. Former Prime Minister Malcolm Turnbull has labeled AUKUS “one-sided” and “unfair,” arguing it disadvantages Australia while benefiting the US Public skepticism is mounting, with critics like Keating and Turnbull resonating with voters concerned about cost and sovereignty.

Dutton’s assertion of ownership, particularly his claim that Biden was initially opposed, underscores the deal’s political sensitivity. If Biden’s reluctance is accurate, it suggests the US commitment may be tenuous, especially under a Trump administration known for its transactional foreign policy. Dutton’s narrative also risks alienating Labor, which has invested significant political capital in implementing AUKUS, potentially deepening partisan divides.

International Repercussions

The AUKUS deal has strained Australia’s international relationships. The cancellation of the French submarine contract precipitated a diplomatic rift, with French President Emmanuel Macron accusing Australia of deceit. Biden later admitted that the deal’s announcement was “clumsy,” highlighting its geopolitical fallout. France, a key player in the Indo-Pacific, recalled its ambassadors, and relations remain tense.

China’s response has been sharply critical, with its ambassador to Australia describing AUKUS as an “unnecessary consumption of Australian taxpayers’ money.” This rhetoric, coupled with China’s economic leverage as Australia’s largest trading partner, poses risks to bilateral trade. Furthermore, the deal complicates Australia’s relationships with ASEAN nations, which prioritise regional stability over great power rivalries.

Vulnerability to US Political Shifts

Biden’s Alleged Reluctance

Dutton’s claim that Biden was initially opposed to AUKUS, if accurate, underscores the deal’s precariousness. US Senators Jack Reed and James Inhofe warned in 2022 that selling submarines to Australia could strain the US industrial base “to the breaking point,” reflecting domestic concerns about prioritising foreign allies. Biden’s hesitation may have stemmed from these pressures, as the US struggles to meet its own submarine production targets.

This uncertainty is compounded by the deal’s lengthy timeline, which spans multiple US administrations. By the time the first Virginia-class submarine is delivered, the US will have experienced at least two more presidential elections. A future administration, particularly under Donald Trump, could reassess or cancel AUKUS if it deems it contrary to US interests.

Trump’s Potential Impact

The prospect of Donald Trump’s election in 2024 has intensified fears regarding the future of AUKUS. Trump’s transactional approach to alliances and his silence on AUKUS since its announcement raise doubts about his commitment to the deal. Former Prime Minister Scott Morrison has claimed that Trump gave the deal a “warm reception” in private discussions, but this remains unverified. Defence expert Charles Edel has noted that Trump may demand higher Australian defence spending or additional concessions, further skewing the deal in favor of the US

Recent US reviews of AUKUS, prompted by concerns about cost-effectiveness and production delays, further exacerbate the uncertainty. Senator Tim Kaine has highlighted delays in US submarine construction, warning that America may prioritise its own fleet over Australia’s. If Trump withdraws support, Australia risks being left without submarines, having already invested billions and canceled the French contract.

Lack of Transparency and Public Scrutiny

The secretive nature of AUKUS has fueled public distrust. The deal was negotiated behind closed doors, with even senior Australian officials kept in the dark. Key updates, such as the transfer of nuclear propulsion plants, were revealed through US announcements rather than Australian ones. Independent MP Allegra Spender has criticised the lack of transparency, noting that the UK’s parliamentary review of AUKUS contrasts sharply with Australia’s limited scrutiny.

This opacity undermines democratic accountability, leaving Australians to question the deal’s true costs and commitments. The absence of a “Plan B,” as acknowledged by experts, heightens the risk of being locked into a potentially flawed agreement.

Counterarguments: The Case for AUKUS

Proponents argue that AUKUS strengthens Australia’s defence capabilities and deters aggression in the Indo-Pacific. The nuclear-powered submarines offer superior range, stealth, and endurance compared to conventional submarines, enhancing Australia’s ability to project power. The deal also deepens ties with the US and UK, reinforcing the ANZUS alliance and ensuring interoperability with key allies.

Economically, AUKUS is expected to create thousands of jobs, particularly in South Australia, and diversify Australia’s industrial base. Strategically, it positions Australia as a key player in countering China’s naval dominance, aligning with US and UK efforts to maintain a “free and open Indo-Pacific.” However, these benefits are speculative and long-term, while the risks – financial, strategic, and political – are immediate and substantial. The deal’s reliance on US goodwill and production capacity undermines its strategic assurances, and the economic benefits may not outweigh the opportunity costs.

Conclusion

In conclusion, the AUKUS deal, while ambitious, is a bad deal for Australia due to its erosion of sovereignty, exorbitant costs, and potential to destabilise the Indo-Pacific. Peter Dutton’s claim of securing the agreement against Biden’s initial reluctance highlights its fragility, particularly under a Trump administration. The deal’s lack of transparency, coupled with its dependency on US and UK support, leaves Australia vulnerable to external political shifts and domestic economic strain. Critics like Paul Keating and Malcolm Turnbull rightly emphasise the risks of subordinating Australia’s interests to a US-led agenda, while the financial burden threatens to undermine social and economic priorities.

Australia must reconsider its commitment to AUKUS, exploring alternatives such as enhanced conventional defense capabilities or renewed diplomatic engagement with regional partners. Greater parliamentary scrutiny and public debate are essential to ensure that future defense decisions prioritise Australia’s sovereignty, security, and prosperity over costly and risky alignments with great powers.