Ensuring AUKUS pact success: strengthening defence and boosting Australia's economy

Announced with presidential approval, the defence capability and success of the AUKUS nuclear-submarine programme will come down to reconciling global expertise with the unique conditions of the Australian defence industry and wider economy.

By Liam Hale, Defence Sector Lead, Australia and New Zealand and Greg Parkinson, Director, Procurement and Contract Services 

In March 2023, details of the AUKUS pact were unveiled, setting out bold plans to develop Australia’s first fleet of nuclear-powered submarines. The tripartite agreement is the culmination of historic discussions between the three governments of Australia, the UK and the USA.

This marks the start of a decades-long process towards Australia becoming the seventh global power to deploy nuclear-powered submarines. Planning for the programme is currently underway, with the development of the new design set to begin by 2030, commissioning in the UK by the end of that decade and within Australia by the early 2040s. 

The AUKUS pact will be transformative for Australian defence capability. However, its significance goes beyond the military, delivering new jobs, industry and investment.

It also has the potential to galvanise the regional economy in South Australia, where the fleet will be built, and in Western Australia, where it will be based.  

Preparing local industry for AUKUS 

At its heart, AUKUS is not only about the transfer of nuclear-powered submarines, equipment and materials to Australia, but is also about building long-term defence capability for Australia so that local industry can take responsibility for the programme in decades to come. 

Though UK and US expertise will drive forward the initial design and commissioning for the AUKUS-class, the pact’s goal is to establish a secure environment in which the programme can succeed on Australian soil.  

While the agreement is still in its early stages, this transition from global oversight to local sovereignty must be mapped out closely. As with many major programmes, there is a tendency to focus on construction capabilities - the delivery of the new ‘kit’ at the end of the production line. However, ensuring that the Australian defence industry can maintain and provision the fleet will be equally important.  

For the value of AUKUS to be successfully delivered, strategies for the Australian defence industry to assume control over an entire sovereign supply chain will be essential.  

Building a global expertise skills community in South and Western Australia 

The requirement for such oversight does not only apply to defence equipment and technology, but the wider skills base. Arrangements for the diffusion of skills into local industry must also be made. While the first stage of the programme will rely on external expertise, upskilling Australian workforces so that they can construct and support the SSN AUKUS class of nuclear-powered submarines is integral.  

Plans for this cannot be developed in isolation. Rather, they must be made in close coordination between and within federal government departments and state governments.

In recognition of others, plans must draw on skills and supply chain capacity from ‘rival’ infrastructure investment. Ambitious schemes that are already underway, in South Australia alone, spell potential difficulties in securing a workforce for AUKUS, which is expected to need up to 8,000 workers when fully operational. 

The nature of this competition not only includes engineering expertise, but also resources. Thifs is particularly true for the delivery of the infrastructure and community building needed to meet the social and logistical requirements of the workforce and the shipyard. Eight thousand workers bring partners, families and dependents – in turn requiring homes, schools and other critical amenities.  

The adequacy of existing road and rail networks, both between the community and the worksites as well as with wider society, will need to be thought through as well. In the face of these potential difficulties in growing a skilled local workforce, effective communication and detailed planning between government departments will be vital.  

Upping the ante with global nuclear power 

The complexity of these programme challenges is compounded with AUKUS’ critical differentiator: its nuclear propulsion. 

Technical requirements and personal skillsets will need to be stepped up significantly so that local industry is equipped to handle the programme.

Australia’s new responsibilities for safely storing and disposing of nuclear material will also need to be accounted for, rigorously managed and relentlessly scrutinised. The agreement sets out robust conditions for this, as part of the global non-proliferation regime which will, in effect, establish an entirely new mandate within the Australian defence industry. 

Where nuclear power is concerned, ensuring the security of the programme and of access to information within it is especially vital. It is just one driver behind the need for a comprehensive data and digital strategy threading through all aspects of the programme - maintaining visibility and enabling the delivery of AUKUS to stay on track.  

The AUKUS pact is already proving a challenging national endeavour and will continue to test our capabilities for decades to come. Both short- and long-term planning is necessary, as well as coordination between governments. 

However, the potential it holds for the Australian defence industry and for the economy at local and national levels means that there is no room to misstep. Reflecting on past experiences, harnessing global expertise and maintaining flexibility can ensure AUKUS is a success.  

For further information contact:

Liam Hale

Liam Hale
Defence Sector Lead