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What AUKUS means for manufacturing

Manufacturers' Monthly

Prime minister Anthony Albanese has announced the biggest industrial undertaking in Australia’s history alongside British PM Rishi Sunak and US president Joe Biden.

Together in the US, the three leaders emphasised the industry-building aspects of the tri-lateral plan to jointly develop and build nuclear-powered submarines.

In total, Australia will end up with eight of the new nuclear submarines, called SSN-AUKUS.

The current price tag for the entire submarines plan is between $268 billion and $368 billion over the next 30 years.

That includes $8 billion to upgrade the naval base HMAS Stirling in Western Australia as well as $2 billion over the next four years to upgrade the Osborne shipyards in South Australia.

The Federal Government has said the phased approach will result in $6 billion invested in Australia’s industrial capability and workforce over the next four years, creating around 20,000 direct jobs over the next 30 years.

Prime minister Albanese said AUKUS is a historic investment in Australian people and would strengthen the nation’s national security and deliver a superior defence capability into the future.

“We will partner with the United States and the United Kingdom to build the next-generation submarine. They’ll be built by Australians, commanded by the Australian Navy and sustained by Australians in Australian shipyards. In the meantime, we’ll be training and upskilling our people through increased visits and rotational presence from US and UK submarines,” he said.

“With construction beginning this decade, we’ll train more engineers, scientists, technicians, submariners, administrators and tradespeople. Already, Australian personnel are upskilling on nuclear propulsion technology and stewardship alongside British and American counterparts.”

The South Australian Submarine Construction Yard created for the build of the next-generation nuclear-powered submarines will be almost three times larger than the yard forecast for the Attack class program.

At its peak, up to 4,000 workers will be employed to design and build the infrastructure for the Submarine Construction Yard in Osborne, South Australia.

A further 4,000 to 5,500 direct shipyard jobs are expected to be created to build nuclear-powered submarines in South Australia when the program reaches its peak. This does not include the additional jobs created in the supply chain for the construction or sustainment of submarines.

“The significance of this moment cannot be overstated,” said SA premier, Peter Malinauskas.

“The AUKUS submarines will be the most complex machines that have ever been built in human history. But it is not just the thousands of workers to be employed at Osborne who will benefit. This is a transformational opportunity to increase our economic complexity. We now have a massive task ahead of us to prepare the highly skilled workforce to capitalise on this historic opportunity.”

Innes Willox, chief executive of the national employer association Ai Group said, “Delivering maximum benefit for Australia from this historic agreement will require the highest level of cooperation between governments, defence and industry.

“Now the deal has been inked, the next major priority for the AUKUS governments will be to work to reduce the trade, regulatory, and bureaucratic barriers that could hinder the historic partnership, to create a cohesive industrial base and build the required workforce. These are among the important issues that must be addressed to underpin AUKUS success,” he explained,

“The AUKUS partnership is much more than submarines. Australia is making a massive technological commitment as part of the agreement. There will be extensive spill-over benefits in technological advancement and technology sharing including around artificial intelligence and quantum technology with its promise of major developments in weapons, communications, sensing and computing technology.”

Willox said it was vital that strong benefits from the AUKUS collaboration are captured for domestic industry.

“We will be looking closely at the details around the local build and domestic supply chain aspects of the overall program to ensure that these benefits are realised.”

AUKUS industry associations – consisting of Ai Group and the US Aerospace Industries Association (AIA) and ADS, the UK trade association for aerospace, defence, security and space organisations – have agreed on the following priorities for the agreement:

  1. Enhancing trade and technology transfers;
  2. Eliminating bureaucratic and regulatory barriers impeding the timely delivery of capabilities;
  3. Building shared, robust, and resilient trade and contracting systems; and
  4. Sharing workforce talent and expertise and strengthening international collaboration

Greens leader Adam Bandt took to social media to say the $368 billion for nuclear submarines could be used for other priorities.

“Politics is about priorities and choices. With $368 billion we could get: free childcare, mental and dental healthcare into Medicare, fully free public schools, student debt wiped.”

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