US cuts subs program

AUKUS threat as budget constraints curtail ship build

Supporters and critics of the AUKUS pact have blasted the US Navy’s decision to halve its planned submarine production next year, warning it could put Australia’s purchase of American nuclear-powered boats at risk.

As part of US President Joe Biden’s 2025 budget proposal, released on Monday (local time), the Navy revealed it would order one rather than two Virginia-class submarines in the next fiscal year, saving $US4bn ($6bn) amid a broader spending crunch.

But the Navy has already been unable to maintain the two-per-year pace and needs to speed up production to ensure its own fleet can withstand the sale of three Virginia-class submarines to Australia in the early 2030s.

These boats are supposed to be Australia’s first nuclearpowered submarines before the production of the SSNAUKUS in South Australia.

Democrat congressman Joe Courtney, the co-chair of the congressional AUKUS caucus, said the Navy’s plan “makes little or no sense” especially given its submarine fleet was already 17 short of where it was supposed to be.

He pointed to warnings from shipbuilding unions that it would put a handbrake on efforts to bolster the submarine industrial base and speed up production.

“Given the new commitment the Department of Defence and Congress made last year to sell three submarines to our ally Australia, which I enthusiastically support, the ramifications of the Navy’s proposal will have a profound impact on both countries’ navies,” Mr Courtney said.

In a briefing, the US Navy’s chief financial officer Mike McCord said it was a “management decision”, given there were currently more than a dozen Virginia-class submarines on order.

“The question was really, what can we do to get a better result other than keep doing the same thing and hoping for a different result,” he said.

Under Secretary of the Navy Erik Raven also defended the move, saying the Navy was “not simply taking a submarine out” but instead acting “out of concern for the industrial base ability to produce yet one more, while in a capped environment making headroom for these historic investments in the submarine industrial base”.

Australia is investing $US3bn in America’s submarine industrial base as part of the AUKUS agreement, although a planned $US3.4bn spending boost by the Biden administration has been held up by a political fight.

The Navy is promising to reach the two-per-year construction rate by 2028.

Mr Courtney vowed the Navy’s “hard rudder” would receive Congress’s “highest scrutiny”, with politicians able to adjust the proposal during the budget process.

A key factor in the Navy’s decision was a strict spending limit imposed by Mr Biden.