Opinion: Trust dives amid Australia's billions in defence contracts

Photo by Joshua Hoehne on Unsplash
Sunday 12 March 2023

By Mark Kenny

A version of this article was originally published by The Canberra Times.

They are the defining political stories of 2023. AUKUS and robodebt. Submarines and sub-ethical government.

Together, they raise the question, which is least excusable: paying billions extra to span a defensive capability gap, or paying out billions in avoidable compensation to victims of unlawful debt-raising by their own government?

Both disasters have been dominating the news recently and will continue to reverberate for years to come.

One is being trumpeted as the single-largest increase in defence spending in Australian peace-time, perhaps doubling the nation's military expenditure, while the other is the most egregious legal and ethical breach of good governance in the federation's history.

AUKUS addresses the capability gap between the end of life for Australia's existing six-strong fleet of conventional diesel-electric Collins class submarines, and the deployment of whatever replaces them.

This "gap" had been visible even before nine big-talking "national security" years of Coalition government, during which Australia canvassed options from Germany, Sweden South Korea and Japan, before eventually settling on 12 down-spec'd diesel-electric versions of France's nuclear submarines to be built (mostly) in Adelaide. Then, in the spring of 2021, even that colossal $90 billion order was publicly "belayed" in a contretemps humiliant for Franco-Australian relations.

A new periscope had broken the surface. America's Joe Biden, Britain's Boris Johnson, and "that fella from Down Under" (AKA Scott Morrison) had hatched a cunning plan which, as well as screaming Anglosphere in the Asian region to which Australia otherwise insists it belongs, would deliver nuclear submarines to the Royal Australian Navy.

Eighteen months later, it's plain why the larger powers agreed. AUKUS would flush literally tens of billions of Australian dollars into the ballast tanks of the American and British defence sectors bringing lucrative contracts and many votes (sorry, jobs) for decades to come.

Not to mention facilitating Washington's enhanced forward projection against Beijing in the Indo-Pacific while giving the Pentagon an even clearer influence over Canberra's strategic posture. And the best bit? Australia pays.

Fevered speculation over whether Canberra would go for the more agile British Astute class, or the larger US platforms, has ended in a typically deferential Australian solution - both. An inherently fraught multi-decade process of collaborative design, distributed construction, maintenance, operational training, crewing and deployment, would be immeasurably more complicated.

Typical also, was the way the first information broke around these latest details. While Anthony Albanese remained ambiguous to the last minute about his US visit straight off the back of his four-day trip to India, US officials were confirming elements of this unwieldy Australian solution.

More will be known once Biden, Rishi Sunak, and Albanese meet in San Diego, but it is accepted America will station some of its Virginia class nuclear submarines at Western Australia's Stirling submarine base (which will need upgrading) during the next term of parliament.

This will form part of America's strategic step-up in the Indo-Pacific, ahead of supplying as many as five of these "apex-predator" subs for full Australian purchase.

While tens of billions are involved in this stage alone, and there is even talk in the US of having to build a third major shipyard for submarine construction due to order overloads, this is just the gap-filler. The second phase is a tripartite collaboration to build a predominantly British-designed SSN-AUKUS, for service later in the 2030s or more likely the 2040s.

Adelaide remains hopeful of securing the major construction work, despite the previous government famously declaring it didn't trust its Osborne-based ASC to "build a canoe".

Will its shipyards build the more sophisticated submarines with nuclear propulsion?

A key problem with all this is that it is impossible to see where epic commercial interests end and divergent strategic priorities of Australia and its senior partners begin. They are already being hopelessly intermingled. One thing, however, is patent: it will be Australian dollars driving this.

Alliances give comfort to modest maritime powers such as Australia, but the sharing of America's most secret military advances, along with Australia's lack of expertise in building and commanding nuclear vessels, inevitably deepens Australia's US reliance. This is not merely a question of whose strategic interests prevail in war time, but whose count in decisions of staged peacetime deterrence - think joint manoeuvres in the South China Sea, for example. That matters.

Albanese's insistence on Thursday in Ahmedabad that "Australia will retain, absolutely our sovereignty, our absolute sovereignty" used curiously abstruse language. Why not say, "of course, Australia will always command all of our assets at all times, with no exceptions"?

So much turns on trust. Vast expenditure on unproven designs, using unfamiliar technologies, to see off uncertain threats. All under the domineering influence of a brittle US.

Meanwhile, in the savage light of recent experience, the failures of Australian governments to treat the least powerful fairly, to act lawfully, and to be accountable for wrongdoing, shows it's not just a capability gap we have.

The robodebt royal commission ended on Friday with victims recounting harrowing stories of heartless persecution and breaches of the government's duty of care. Lives were lost. Others destroyed.

The hearings highlighted the different life experiences of untouchable public servants and politicians including two former PMs and a cast of slippery cabinet ministers who couldn't recall, hadn't asked, claim never to have known.

Which is the greater betrayal of the national interest? A failure of capability or a denial of culpability?

Mark Kenny is a professor at the ANU Australian Studies Institute and host of the Democracy Sausage podcast.

Updated:  14 March 2023/Responsible Officer:  Institute Director/Page Contact:  CASS Marketing & Communications