22 March 2023
Last week, Prime Minister Albanese, US President Biden and UK Prime Minister Sunak announced the Optimal Pathway for Australia’s acquisition of conventionally-armed, nuclear-powered submarines.
This was a historic event in our nation’s history.
The acquisition of this formidable capability is the single biggest leap in Australia’s defence capability.
It will see Australia become one of only seven nations to operate nuclear-powered submarines.
It will strengthen our capacity to defend Australia and its national interests.
And it will significantly enhance our contribution to the security and stability of the region.
While the starting point for Australia’s acquisition of nuclear-powered submarines is our defence and national security needs, last week’s announcement also represents the start of a transformative pathway for Australian industry, technology and scientific advancement.
This will be a complex, multi-decade undertaking.
And the Parliament can be assured that the Albanese Government has adopted a methodical, phased approach that will build our capacity as a nation to safely and securely build, maintain and operate conventionally-armed, nuclear-powered submarines.
This plan will see Australia build a next-generation nuclear-powered submarine – known as SSN-AUKUS.
These submarines will be based on a UK design, incorporating the very best of Australian, US and UK technology.
Australia’s next-generation submarines will be Australian sovereign assets, commanded by Australian officers, and under the sovereign control of Australia. And they will be built by Australian workers in South Australia.
SSN-AUKUS will be a common platform operated by both the UK and Australia, with two productions lines – one based at Barrow-in-Furness in the UK, and one based at Osborne in South Australia.
The first submarine will roll off the UK production line in the late 2030s for the Royal Navy. The first Australian submarine will be delivered in the early 2040s from Osborne.
Subsequent Australian submarines will roll off the Osborne production line at a three-yearly drumbeat.
This arrangement will spread the risk over two production lines and improve efficiencies, as we avoid a bespoke design and delivery model.
To reach this goal, we will need to build experience and expertise among Australian service personnel, workers and industry.
And that work starts right now.
From this year, Australian military and civilian personnel will begin embedding with the Royal Navy and the US Navy, and within UK and US submarine industrial bases, to accelerate the skills development of our workforce and sailors.
From this year, we will see an increased tempo of visits to Australia from UK and US nuclear-powered submarines.
From 2027, the UK and US will have a rotational presence at HMAS Stirling in Western Australia.
This will ultimately comprise one UK Astute class submarine and up to four US Virginia class submarines, and will be known as Submarine Rotational Force-West.
This rotational presence will be consistent with Australia’s longstanding policy of no foreign bases on Australian soil.
The increased tempo of visits and rotational presence will enable Australia to grow the required submariner cohort to operate our own Virginia class submarines from the early 2030s.
Through this we will also grow the wider workforce within and beyond Defence that has the familiarity to work with nuclear-powered submarines.
This will accelerate our ability to become ‘sovereign ready’ as responsible nuclear stewards, managing this technology safely and securely to the highest international standards.
In the early 2030s, Australia will acquire its first of three Virginia class submarines.
The provision of these submarines is an unprecedented contribution to our defence capability by our US ally.
To facilitate this, and ensure Australia receives Virginia class submarines at the earliest opportunity, Australia will assist the US in improving its sustainment facilities to have more Virginia class submarines come out of maintenance and back into operational service.
We will also help improve the US submarine construction facilities to increase the production rate of new Virginia class submarines.
However, the amount we invest in our own industrial base will far exceed our investment in the US, both over the Forward Estimates and through the life of the program.
Ultimately the early purchase of the Virginia class submarines will ensure that there is no gap in our submarine capability as a result of a lost decade.
As with SSN-AUKUS, once the Virginia class submarines carry an Australian flag they will be sovereign Australian assets operating under the complete control of the Australian Government.
The Optimal Pathway reflects a truly trilateral partnership. It will meet Australia’s long-term defence needs, while creating tens of thousands of jobs and delivering benefits to our national economy for generations to come.
This pathway ensures a methodical, safe and secure transition from Australia’s current diesel-electric Collins class submarines to the Australian-owned Virginia class submarines and finally to SSN-AUKUS – an Australian built nuclear-powered submarine.
Ultimately, this will see the Royal Australian Navy operate a fleet of eight nuclear-powered submarines by the mid-2050s.
As we become ‘sovereign ready’ to operate nuclear-powered submarines it will be essential that we also become responsible nuclear stewards.
This will mean developing the full suite of skills, facilities and institutions along with an appropriate regulatory and legislative architecture to be nuclear stewards.
The Government will establish a new dedicated executive agency responsible for delivering the Optimal Pathway for Australia’s nuclear-powered submarine program.
This agency will be responsible for delivering the entire nuclear enterprise.
As a responsible nuclear steward, the Government will also establish an independent regulator, responsible for regulating the nuclear-powered submarine enterprise.
Legislation will be required to underpin the nuclear enterprise and its regulation.
Australia has maintained regular, close engagement with the International Atomic Energy Agency – the IAEA – throughout the development of the Optimal Pathway.
Australia will meet its non-proliferation obligations and commitments under the Treaty for the Non-Proliferation of Nuclear Weapons.
The Government has been clear throughout this process: Australia does not want to, and will not, acquire nuclear weapons.
We are working with the IAEA to place the bar at its highest when one country shares nuclear naval propulsion technology with another.
Australia will work within the framework of our Comprehensive Safeguards Agreement and Additional Protocol with the IAEA.
Director General Grossi’s remarks following the announcement last week reinforced that work will continue to enable the IAEA to exercise its verification and safeguards mandate in an impartial, objective and technical manner.
As part of satisfying our obligations, Australia has committed to manage all radioactive waste generated through the acquisition and operation of our nuclear-powered submarines.
This is a complex task, but we have time to get it right.
To be clear, we will not have to dispose of the first reactor from our nuclear-powered submarines until the 2050s.
Within the next 12 months, we will set out the process by which we will identify potential locations on the current or future Defence estate for storage and disposal of this waste.
I want to assure the Parliament that there will be appropriate public consultation, particularly with First Nations communities to respect and protect cultural heritage.
This will not be a matter of set and forget. We will continue talking to the Australian people about why we are undertaking this transformational endeavour.
Engaging in a transparent and open way with our partners in the region is central to our approach to AUKUS. By building confidence and trust with our partners, we can better support a sovereign and resilient Indo-Pacific region.
That is why in the lead up to the announcement, it was a priority for our Government to talk to our partners in the region and beyond.
This announcement did not come as a surprise to them.
The Prime Minister, myself, the Minister for Foreign Affairs, and the Minister for International Development and the Pacific made over 60 calls to our counterparts.
Since our announcement last Monday their reaction demonstrates the genuine appreciation they have for the transparency we have shown, but also an understanding of why Australia is making this decision.
Australia remains fully committed to the South Pacific Nuclear Free Zone Treaty, known as the Treaty of Rarotonga.
Our AUKUS partners recognise Australia’s obligations under international law, including the Treaty of Rarotonga. Every aspect of the Optimal Pathway will be consistent with those obligations.
While our future nuclear-powered submarines will be the single biggest acquisition in Australia’s Defence history, it also offers so much more for Australia: for jobs, for industry and for investment.
This is an exciting pathway, which will require a truly whole-of-nation effort.
It will be one of the greatest industrial endeavours Australia has ever undertaken – rivalling the likes of the Snowy Hydro Scheme or the establishment of the Australian automotive industry.
Over the next 30 years, this project will create around 20,000 direct jobs; see $30 billion invested in Australia’s industrial base; and result in massive infrastructure upgrades and expansion amounting up to $18 billion.
This project will transform our skills, productivity, industrial capacity and science and research capabilities.
Workers will benefit from massive investments to boost skills and training. We will invest $6 billion in uplifting Australian industry, infrastructure and workforce over the next four years.
In South Australia, which will remain the home of submarine construction in Australia, we will invest $10 billion in expanding infrastructure over the next 10 years.
At its peak, up to 4,000 workers will be employed to design and build the infrastructure at Osborne. A further 4,000 to 5,500 jobs are expected to be created to build the submarines.
In Western Australia, the home of Australia’s submarine fleet, we will invest up to $8 billion over the next decade in expanding infrastructure at HMAS Stirling, creating around 3,000 direct jobs.
We expect a further 500 additional jobs to sustain the Submarine Rotational Force – West from as early as 2027.
There will be opportunities for industry across the country to support not only Australia’s industrial requirements, but also the industrial bases and supply chains for the UK and the US.
This work begins now: to expand and upskill our workforce; to invest in our industrial base across Australia; and to build the infrastructure required for decades to come.
Acquiring nuclear-powered submarines is a game changer for our capability and posture.
To be clear, the Collins class is a potent, highly capable diesel-electric submarine. We will extend the life of the Collins class submarines from 2026 so that they remain an effective capability until they are withdrawn from service.
But as we look ahead to the 2030s and beyond, the reality is that diesel-electric submarines will be increasingly detectable as they surface to recharge their batteries.
That will necessarily diminish their capability.
By the 2030s and 2040s, the only capable long-range submarine able to effectively operate in our ocean environment will be nuclear-powered submarines.
These submarines have the capacity to remain submerged and deployed for months, making them incredibly hard to detect.
As a corollary of their speed, stealth and endurance, a nuclear-powered submarine puts the biggest possible question mark in the mind of any potential adversary.
This is a capability that will make Australia a more difficult and costly target for anyone who wishes us harm.
We are facing the most complex strategic circumstances since the Second World War.
Our national interest and our national security extends beyond our shoreline. As an island trading nation, we are highly dependent on global trade.
Since the Hawke-Keating Government opened up the Australian economy in the early 1990s, ushering in three decades of uninterrupted economic growth and prosperity, trade has become even more vital to our way of life.
That has brought tremendous benefits, reducing the cost of commodities and products, and expanding opportunities for Australian industry, jobs and growth.
But with that connectedness comes a reliance on maintaining that access.
Almost 99 per cent of our trade by volume passes by sea.
In 1990, trade represented 32 per cent of our GDP; by 2020 it was 45 per cent of our GDP.
The practical impact of this can be seen in just one example.
In the 1990s, we had eight oil refineries which were producing most of our liquid fuels on shore.
Today, we have two. Most of our liquid fuels we import, indeed, most of what we use, we import from one country: Singapore.
One doesn’t have to think hard to see what the impact would be if just this one trade route was disrupted by an adversary.
Our interests lie in an open, stable and peaceful region.
And so the defence of Australia doesn’t mean much without the security of our region and a settled global rules-based order.
As geo-strategic competition intensifies, we must act quickly to maintain balance.
Therefore, at the heart of Australia’s strategic intent behind acquiring a nuclear-powered submarine capability is to make our contribution to the collective security of our region, and to the maintenance of the global rules-based order, which is so fundamental to Australia's future.
Increasing our military capability sits alongside our diplomatic efforts, promoting positive incentives for peaceful engagement in the region.
Clearly our future nuclear-powered submarines will be highly capable in conflict.
Any adversary who wishes us harm by disrupting our connection with the world will be given pause for thought.
But at the end of the day the true purpose of our nuclear-powered submarines will be to significantly enhance Australia’s contribution to the stability, the security and, the peace of our region.
I thank the House.
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