AUKUS Reaction: Some companies support, some criticise sub deal

Reaction to the AUKUS announcement in the United States on Monday was swift in Australia. Most companies and other entities welcomed the news, while others criticised the announcement and the overall deal. Babcock welcomes AUKUS announcement Babcock International Group said it welcomed the announcement from the Australian, United Kingdom and United States Governments regarding the optimal pathway for acquisition of nuclear-powered submarines under the AUKUS pact. Babcock CEO David Lockwood said: “Babcock plays a critical role in all three countries’ submarine programmes today. Our experience of nuclear infrastructure, workforce upskilling, and regulatory and safety stewardship means we are ideally positioned to help deliver a nuclear-powered submarine capability for the Royal Australian Navy under the AUKUS agreement.” Babcock has a proven track record for managing complex assets in highly regulated environments.  Owning and operating the UK’s only licensed facility for refitting, refuelling and defuelling nuclear submarines, Babcock sustains the entirety of the Royal Navy’s nuclear-powered submarine fleet, including the delivery of through-life support and life extension of the Vanguard, Trafalgar, and Astute Submarine Classes. Defence Teaming Centre says AUKUS ‘welcome relief’ Audra McCarthy, CEO of the Defence Teaming Centre, said the AUKUS announcement was a welcome relief as Australia’s defence industry now has certainty, creating confidence to commence investing in infrastructure and workforce needed to deliver to Defence the capability it needs. It also provides surety and security to Australians knowing Australia’s defences will remain regionally superior. “Australia’s defence industry sector has been waiting 18-months to learn if the nuclear-powered submarines would be built at Osborne as promised, and this announcement has come as a huge relief,” McCarthy said. “We are pleased that the decision will boost Australia’s economy, providing increased jobs, especially in the infrastructure sector to support the AUKUS program, however we are concerned about the timing of the Program and how this will translate to opportunities for Australian small to medium sized defence businesses. Under the previous program led by Naval Group, Australian companies were scheduled to start work on the Future Submarine Program in 2024 with some having already commenced work in 2021. Now under the AUKUS program we are talking about engaging Australia’s defence industry in this decade. This means our industry will be waiting yet again for many years before receiving any work. Our fears of a ‘valley of death’ reappearing are real. The timeline for purchase orders to Australian businesses in the defence sector has been pushed out, leaving industry displaced by the cancellation of the previous Naval Group contract with no defence opportunities to recover their losses for several years. “The DTC is concerned about the financial welfare of businesses who chose to invest in the defence sector and who now patiently await opportunities to compete for. With rising interest rates and inflation, the risk to government is these companies will leave the defence sector, delaying the realisation of a sovereign industrial capability for decades,” McCarthy said. “We are still waiting to learn the outcome of the Defence Strategic Review and what the impact on the wider defence industry community will be. Richard Males has hinted that the government is prepared to cancel some Defence projects to fund others, and this again could have a negative impact on companies working on current defence projects.” Australian Greens Senator David Shoebridge criticises AUKUS “This is a 368 billion dollar nuclear-powered raid on public education, health, housing and First Nations justice that will starve core services for decades to come. Unlike the Coalition, the Greens will not be cooperating with the government to force budget savings on critical public services to pay for these submarines. Until it is reversed, today’s announcement  will force Labor to deliver austerity budgets to funnel billions of dollars offshore to fund the US and UK nuclear submarine industries. With this one decision, Labor is mortgaging our future in order to stoke regional tensions with a dangerous escalation in regional defence spending. What should send a shiver down every Australians’ spine is that the $368 billion budget is just the ADF’s starting bid, because we know major defence projects routinely blow their budgets and timelines. The Greens’ budget concerns are only highlighted by the gamble with an untested hybrid UK design for the future submarines. “This political deal makes Australia a third-wheel to the US’s regional ambitions while forcing us into an arms race that escalates tensions in our region, making us all less safe,” Shoebridge said. “This reckless alliance, cooked up by the Morrison government and backed by Labor, fundamentally compromises Australia’s sovereignty by aligning us with the military and nuclear strategies of the world’s biggest powers. We won’t be able to operate, maintain or crew these military assets without the agreement of the US, which is the very definition of surrendering our sovereignty. While Labor and the Coalition are in lock-step on more defence spending and nuclear powered submarines the great majority of Australians want a government focused on de-escalation, peace and critical domestic services. The Greens will remain the voice for the majority of Australians who want us to work inside and outside Parliament to unravel this dangerous and expensive nuclear gamble,” Shoebridge said. Australian Greens Senator Jordon Steele-John also criticises pact “The Albanese Government’s announcement of the specifics of the AUKUS pact is a fundamental threat to Australian independence and our ability to collaborate in our region. It will undermine the global effort to fight the climate crisis and unleash a regional arms race that only serves to enrich global arms manufacturers,” Steele-John said. “The AUKUS pact will see an unprecedented nuclearisation of our oceans and open Australia up to the risk of a nuclear disaster which would have effects that last generations. Make no mistake- there is not a single modern technology that has never failed. It is especially egregious that the government would see fit to announce this deal so close to the 20th anniversary of the US leading Australia into an illegal invasion of Iraq for which they have never apologised or demonstrated that they have learned any of the lessons that come from that humanitarian disaster. This deal has been compromised from the start. It was dreamt up by a Morrison government on its way to electoral defeat and stewarded by US military advisors who got rich off telling the Australian government how they could best serve American Interests. This is clear in how Australia’s acquisition of nuclear submarines will play out. These submarines will require UK technology to function, American shipyards to build and US personnel to crew yet we are somehow supposed to believe this meets Australia’s interests. One day, once the US loses interest, the billions of people that make up the South Pacific will still live here and none of us want a repeat of Afghanistan and Iraq. The US is operating in the Asia Pacific with no regard for national interest or sovereignty of countries involved. This is our home and as so many countries know, the US government is a bad house guest,” Senator Steele-John said. Australian Industry and Defence Network praises deal The Australian Industry and Defence Network (AIDN) welcomed today’s tripartite announcement on the proposed pathway to the construction of an Australian AUKUS nuclear submarine. AIDN congratulates the Prime Minister, Minister for Defence, Minister for Defence Industry, the Secretary of the Department of Defence, Greg Moriarty and VADM Jonathon Mead AO RAN, for the work that has been achieved since the announcement 18 months ago on Australia acquiring a nuclear submarine.  AIDN looks forward to having the opportunity to work closely with Government and Defence on ensuring that Australian Industry, in particular the SME community, are able to compete in a fair and equitable way to secure meaningful work in this program. AIDN commits to engaging in a constructive manner with the Albanese Government, Defence and industry stakeholders, to ensure that this endeavour is successful. Today’s announcement will fundamentally transform Australia as a nation and this cannot be understated. Today the Albanese Government committed Australia to becoming the 7th country to operate nuclear submarines, the ultimate deterrent capability for a nation. Today the ADF and industry have begun a journey that will completely redefine these organisations, this is a national transformation program. It is now imperative that the Albanese Government commits to ensuring that as much activity as possible is undertaken by Australian companies. This is a unique opportunity for Australia, the US and the UK to develop a common supply chain to ensure that the full benefits of AUKUS can be realised. The Albanese Government can ensure that a truly sovereign national industrial capability can be achieved. It is imperative that the Australian Government works closely with our partner Governments to ensure that Australian Industry is front and centre for all discussions. There needs to be a robust mechanism in place to ensure that the required transfer of IP, technical knowledge and knowhow is transferred seamlessly between the partner countries. AIDN will support the Albanese Government and Defence in achieving this outcome, the AIDN membership which is comprised of the best companies Australia has to offer, the AIDN membership provides the full range of capability required, from professional services, engineering services, education, training, manufacturing, program support, combat and electronic systems and componentry that this program will need to utilise, all these companies need is the support of Government to ensure that they can be given the opportunity to do so. Going forward there will be a significant requirement to achieve new certifications, the highest levels of cyber and IT security and export/import requirements, in order to become part of this supply chain. The Australian workforce will be required to upskill in capacity and capability and the numbers of individuals for this program, across all disciplines will be significant. The notion of nation building is often talked about, with today’s announcement there can no doubt that we are now undertaking a truly nation building program, that will require all parties to work together in a collaborative manner. If the nation does not work together then quite simple we will fail in this endeavour. It is vital that a robust and auditable policy and procurement framework is implemented to ensure the Albanese Government’s AUKUS capability requirements are achieved as efficiently as possible, particularly in light of the rapidly evolving geopolitical climate.  The future of the Australian Defence Industry depends on a framework where their role in delivering capability requirements is clear, and the procurement process is efficient and accessible to local industry and importantly, SMEs. Today’s announcement will shape the outcomes for Australia both strategically and for the Australian Defence Industrial base potentially for decades.  If there is not careful consideration for the role of the Australian Defence Industry, then this will be a failure for the Australian Defence Industry and the future of defence innovation and sovereign advanced manufacturing. If Australia is to achieve a truly sovereign industrial base, then the Australian Defence Industry must be designed into every aspect of AUKUS. Brent Clark, Chief Executive Officer of AIDN said: “AIDN is proud to demonstrate to Australia’s political leaders that there is a backbone of national resilience and sovereign defence capability in this country, and we are prepared to work side by side with the Albanese Government and the Department of Defence to accelerate capability delivery and build more durable supply chains here onshore. We are keen to ensure that today’s AUKUS announcement ensures our Industry has the opportunity to demonstrate the integral role we play in our national economy through our sovereign supply chains; modern manufacturing practices; research and innovation; skills development; and regional employment” Clark said. Monash University professor calls for more debate Monash University Associate Professor Maria Rost Rublee said “The costs of the nuclear submarine program are now estimated at more than $365 billion. Australians should realise that this figure does not include the massive investments needed in education and training, ports, safety, legal frameworks and more. This is not just a whole-of-defence investment —  this will require whole-of-government and country attention for the next several decades. Compared to the cost of off-the-shelf conventional submarines, at around $750 million each, we should be examining, as a country, whether these eight to 12 nuclear submarines warrant such a substantial investment of Australia’s time, industrial and educational focus, and taxpayer dollars. The answer may indeed be in the affirmative, but little serious public debate has taken place on the cost-benefit calculations and return on investment. “The AUKUS nuclear submarines face significant risks that originate from our sovereign defence capability of submarines relying so heavily on foreign governments, even close allies such as the United States and the UK. For example, the American technology control regime will require reform if AUKUS is to proceed, which is a matter for the U.S. Congress,” Rublee said. “Recall, though, that Republicans in the U.S. Congress are bitterly divided on whether to continue aid to Ukraine, and many of them have cast doubt on Joe Biden’s presidential win in 2020. In addition, US shipyards are heavily overstretched and Americans have trouble keeping to their regular maintenance schedules, because of a lack of trained workers. For Australia to avoid a submarine gap, we need the promised used Virginia-class submarines, and hopefully the United States will still be willing to sell them in a decade’s time.” Submarine Institute welcomes AUKUS announcement “The Submarine Institute of Australia (SIA) welcomes the announcement of the optimum pathway for the acquisition of Nuclear-Powered Submarines by Australia. The phased pathway balances the urgency of introducing this new capability to protect Australia’s sovereignty and prosperity with maintaining our submarine capability through Collins and introduction of the Virginia class, while allowing the time to develop the skills, infrastructure and fifth generation Australian workforce required to design and build the SSN-AUKUS,” said Michael Fitzgerald, President of the Institute. “The plan is achievable with continued trust between all three nations, bipartisan support and new levels of partnership, collaboration, innovation, and co-ordination across Government, industry, and academia.” “This announcement is just the beginning of a long and complex journey which will see the SSN-AUKUS designed with the US and UK and built in Australia to meet Australia’s needs. The SIA firmly believes that Australia has the capability and can develop the capacity to contribute to the industrial base of all three nations. Australia can safely build and operate nuclear powered submarines. The SIA has been leading the debate on the importance of Australia’s submarine capability to its sovereignty and prosperity since its establishment in 1999. The SIA focussed on the benefits of nuclear-powered submarines at its inaugural nuclear seminar in October 2019. The SIA will continue to lead and promote informed discussion. The journey from Collins to SSNs will feature at our next Submarine Science, Technology and Engineering Conference (SubSTEC 7) to be held 18-20 September 2023 in Adelaide. Through our Undersea Outreach program, the SIA is committed to encouraging young people to serve in the Australian Submarine Force and to develop the skills for the industries required to build and sustain the future submarine fleet. Through the Australian National Submarine Museum, the SIA will continue to share the history and importance of submarines to our future national sovereignty and prosperity,” Fitzgerald said. 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