By Michael Shoebridge*
As Australia’s Prime Minister Anthony Albanese gears up to meet US President Donald Trump, a core objective must be to secure Trump’s backing for the AUKUS sub deal, while trying hard not to get into an argument over Australia’s low rate of defence spending.
The options for pulling this off are limited, but to channel election-style commentary, Albanese has a narrow path to victory. (The Interpreter. The Lowy Institute.)
The downsides, beyond Trump’s inherent unpredictability, are clear. America’s submarine industry is delivering even fewer nuclear-powered subs to the US Navy than it had planned when Joe Biden signed up to AUKUS back in 2021. Deliveries are now running three years late.
So, the US Navy will be more than 20 subs short of its 66 desired number of attack submarines in 2032 when Australia wants its first second-hand US sub. That’s less than half the attack subs the United States had back in 1998.
America has been trying to rebuild its submarine industrial base since 2018, but hasn’t shifted the production needle above 1.2 boats a year. It needs to double this.
In Trump’s eyes, it must look like Biden has left America with another dumb deal. It’s on the hook to hand over scarce submarines when the US Navy needs more of them and is getting fewer. Worse, there’s no guarantee any Australian subs will be available for military campaigns such as deterring or defeating a Chinese attack on Taiwan given the tone of recent government statements.
The good AUKUS news for Trump is that Australian cash is flowing into American hands well before 2032. The Albanese government is handing over $US3 billion, no strings attached, for the US to spend on its submarine industry. Deputy Prime Minister and Defence Minister Richard Marles has made two payments so far.
Unfortunately, there’s no extra cash for the Trump administration: it’s just delivering on the deal Sleepy Joe made. Trump’s starting point on Biden deals is that they’re bad for America and that he can do better.
Albanese hasn’t got much else to offer on subs. He’s just announced a $12 billon “commitment” to the Henderson Precinct in Western Australia, where Australia is meant to be building a maintenance facility for nuclear subs. Awkwardly, it’ll be sometime in 2027 before feasibility and concept studies finish working out what the facilities at Henderson should even look like. So, any maintenance activities there are many years away, although the $12 billion figure at least sounds impressive.
The PM could tell Trump that 440 Australian sailors are going to make up some 12% of the crews on active US nuclear submarines between now and 2032, because this is how Australian submariners are being trained.
That might be music to Donald Trump’s ears. But it’s more likely to ring alarm bells in the Trump brain, because it means America is dependent on Australia agreeing to its sailors going wherever a US president decides – including to a war with China. If an Australian prime minister says no, then withdrawing 12% of serving crews would disable the US fleet. From an America First perspective that’s plain bad: Australia gets to decide if and how the United States uses its own submarines.
Beyond AUKUS, talking about defence is dangerous territory.
The Prime Minister wants to hold fast to his sovereign right to underspend on Australia’s nation’s defence and tell Trump that spending 2% of GDP is historic and generational. But this number is well short of the 3.5% target that the Trump administration wants Australia to achieve. Albanese could fudge the numbers to claim spending on veterans and domestic infrastructure (Melbourne’s Big Build!) is all actually defence activity, but that looks and is shamelessly superficial.
Sometimes doing something that’s strategically very dumb can be politically very smart.
If Marles has been doing his Defence sums, he can tell his boss that Australia’s historical dependence on US defence companies for huge chunks of our defence needs is becoming even more extreme. While 12 of our military’s current top 30 systems in budget terms are American, the government’s 2024 plan commits us to becoming even more reliant on US companies over the next ten years. Between now and then, 19 of our top 30 acquisition projects are buying US weapons, hoovering up 70% of Defence’s acquisition budget or about US$150 billion. That’s the type of sweetener Trump understands.
Of course, making Australia’s military even more dependent on US resupply is a strategically bad move now. Not only are there doubts about America’s commitment to helping even its closest allies in times of need, but we know American defence companies are struggling to meet the American military’s own needs in peacetime. So our military will be left at the back of the supply queue if a war actually starts – it’s already happening with delayed missile deliveries to Australia.
So the Prime Minister should be directing a growing share of the $59 billion in annual defence spending away from US suppliers to Australian companies and to other reliable partners like the Japanese.
But that won’t help get Albanese out of a tight spot in New York.
Telling Trump that Australia loves the US defence industry’s catalogue and so we are buying all of it over the next ten years could. And the beautiful thing is this is what Albanese is already doing. Sometimes doing something that’s strategically very dumb can be politically very smart.
My bet: in his long awaited first face to face meeting with Trump, Albanese will talk up the rivers of Aussie taxpayer cash flowing into America over this next decade and wax lyrical about this equipping Australia’s military with the best that America can build. The extra flow of AUKUS cash will sound even sweeter.
But he’ll keep very quiet about total defence spending and Australian crews on US submarines.
Who knows, in a short meeting this might just work.
*Michael Shoebridge is a founder and Director of Strategic Analysis Australia. From 2018 until September 2022, he was the Director of the Defence, Strategy and National Security Program at the Australian Strategic Policy Institute (ASPI) in Canberra. Before the think tank world, Michael was a deputy in two Australian intelligence agencies – the Australian Signals Directorate and the Defence Intelligence Organisation.
