AUKUS submarine deal: The good, the bad and the ugly
The AUKUS submarine deal is set to cost the taxpayer up to $368 billion, but it will also create 20,000 jobs.
😃 The Good: Deal will create jobs
😔 The Bad: It will cost A LOT
😡 The Ugly:The money might be better spent elsewhere
Today, the leaders of Australia, the US and Britain came together to announce the details of the much-anticipated AUKUS nuclear submarine deal.
Under the deal, Australia will command a fleet of eight nuclear-powered submarines within the next three decades, under a fast-tracked plan to deter Chinese aggression in the Indo-Pacific.
Australia will acquire three US Virginia-class nuclear submarines as a stop-gap from around 2033 before the new SSN-AUKUS-class hybrid is completed around a decade later.
The deal is expected to create upwards of 20,000 Australian jobs.
Prime Minister Anthony Albanese said the program would create around 20,000 direct jobs over the next 30 years across industry, the Australian Defence Force and the Australian Public Service.
These jobs will include trades workers, operators, technicians, engineers, scientists, submariners and project managers.
At its peak, building and sustaining nuclear-powered submarines in Australia will create up to 8,500 direct jobs in the industrial workforce, the prime minister’s office said.
The taxpayer will be spending a lot of money on this deal.
The cost to taxpayers will come in at an eye-watering $268 billion to $368 billion over the next three decades.
The plan will take $9 billion from the budget's bottom line across the next four years and $50 billion to $58 billion over the next decade.
The annual cost will then be around 0.15 per cent of GDP until the mid-2050s, but there are warnings about the exact number due to the unpredictability of inflation in three decades' time.
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If this deal is about protecting Australia against the rising threat of China in the Indo-pacific area, there may be better ways to spend it.
It’s no surprise that China has been boosting its power in the Pacific region, which is why one of the very first things the Albanese government did when it won the federal election was send Penny Wong to Fiji to cement diplomatic ties.
“The visit, in my first week as foreign minister, demonstrates the importance we place on our relationship with Fiji and on our Pacific engagement," Wong said at the time.
In the government’s October 2022 budget, it pledged to increase defence spending and efforts to firm up diplomatic ties with neighbouring South-East-Asian and Pacific nations. That included $1.4 billion in overseas assistance, which featured $900 million for Pacific island nations and $470 million for South-East Asia.
Wong also recently announced Australia would fund healthcare programs across the Indo-Pacific under a $620 million boost.
Just those initiatives add up to $2.02 billion - a far cry from the $368 billion the eight-submarine deal is worth.
And there are real concerns about how beneficial for the nation defence spending really is. Assistant professor of economics at GW University Steven Hamilton expressed why:
“Every dollar spent on defence, every worker gobbled up by it, is a tragedy. Defence spending is not something to be celebrated. It’s a necessary evil,” he tweeted after the AUKUS deal was announced.
“Those 20,000 workers won’t come out of the dole queue. All the other valuable things they would have created are what we give up.”
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