Announced in 2021, the Aukus project is a trilateral agreement between the UK, the US, and Australia. Its primary purpose is to assist Australia with the acquisition and production of nuclear-powered submarines as well as the development of modern technologies.
Within the last few months, there have been several developments that show the Aukus project has moved into a new phase of development. Let’s look through them to see where it’s heading.
In May 2024, Australia announced in its fiscal budget for the year that it would allocate $2.6 billion to the Aukus project for 2024-25, which is a significant increase from the previous year. In total, this brings its contribution to the project to $13.6 billion.
Although there isn’t a specific breakdown of this money (for obvious reasons), we do have some indication of how the money will be spent. One area is for the Australian Submarine Agency, which is overseeing the country’s involvement in the project. Among other things, the money will be spent on hiring new staff and to cover training and retention.
Part of the budget has been given to the US and the UK to ease production bottlenecks, which are holding up the Aukus project. Australia came under some criticism for this decision, as it was believed that neither country needed external funding to continue the production of domestic submarines. However, the decision does make sense, as the project will be delayed if the countries are unable to keep up with production.
Despite domestic criticism, this increased funding is in line with Australia’s 10-year spending plan. According to The Strategist, the country’s budget is up 11% since 2022 and will increase to 17.1% per year over 2022 figures. In total, defence will be allocated $96.5 billion a year.
In March 2024, the UK announced it was appointing BAE Systems and ASC Pty Ltd to help build Australia’s nuclear submarines. Dubbed the SSN-AUKUS, the model will be due to enter service in the 2040s and will share intellectual property from the UK and US.
Production of the submarines will take place in Derby and Barrow-in-Furness, and additional funding will be allocated to create 7,000 new jobs in the UK. Combined with existing roles, this will bring the total British workforce for the project to 21,000. While we don’t have an explicit breakdown of Australia’s funding to the UK, it’s fair to assume some of it will go towards job creation.
So, how does this affect the UK’s part of the deal? The short answer is probably not much. If anything, the funding and allocation of BAE and ASC to the project will have minimal impact on the UK’s role, but in a good way. It’ll be more about keeping production on track than anything else, meaning any impact we see will be minimal because it’s designed to not disrupt the current timeline.
Overall, the Aukus project has the potential to become a longstanding agreement between the three countries. Just as the UK and US have shared nuclear submarine technology since 1958 under the Mutual Defence Agreement, we may see a similar thing with the Aukus project. Whatever the long-term outcome may be, the short-term impact is positive for the UK’s defence industry.
