Marles points to savings after US downgrades AUKUS sub to second-hand version

Defence Minister Richard Marles says taxpayers will save money by ditching a plan to acquire a new and upgraded nuclear-powered submarine from the United States, but experts warn Australia will receive a less capable vessel with a shorter lifespan under the AUKUS shift.

Marles and US Defence Secretary Pete Hegseth on Saturday said the last of three Virginia-class submarines Australia plans to buy from the US will now be second-hand rather than a new boat as originally planned.

Under the AUKUS plan announced in 2023, Australia was to buy a mix of new and second-hand submarines from the US. The vision was for two second-hand US submarines to arrive beginning in 2032 and the third submarine was to be a new and improved Block VII Virginia-class boat.

All three vessels will now be used Block IV submarines that may already have been in service for years, and possibly over a decade, each, compared with the 33-year lifespan of a new boat.

Marles defended the decision on the basis that it reduced complexity by ensuring all Virginia class boats were a consistent set, and there would be a “significant” reduction to the purchase price of the final US submarine and the associated training and operational costs.

“We don’t get the additional cost and complexity of operating a one-off submarine which is different to all the rest,” Marles said in an interview.

“The reality here is that is the single biggest issue and challenge associated with that third submarine if we keep it as it is, which is why we see this as a significantly good outcome.”

He declined to quantify what the saving would be, but he said it wouldn’t substantially change the underlying cost of the AUKUS project.

“We need to be chasing savings where we can and be as prudent as possible, so [this decision] matters. But this is a big program, and we get this one submarine cheaper — it doesn’t fundamentally alter the overall envelope here, which is 0.15 per cent of GDP.”

Pressed on why Australia had sought a new submarine under the “optimal” AUKUS pathway if a used model represented a better outcome, Marles said: “We are just as happy to go down this path because it very much does give us consistency.”

He declined to put a figure on how many years left of service the third submarine would have by the time it was transferred to Australian hands, but he said it would arrive in a condition consistent with the first and second used boats and that it would still have “a lot of years of service left”.

“What we’re getting is a submarine well within its life, immediately after deep maintenance,” he said.