The Second and Third Order Consequences as Australia Goes Nuclear
Yesterday we woke to the surprising news that Australia had made the most dramatic change in Defence policy in a generation. From ‘no nuclear options considered’ to ‘we are acquiring nuclear propulsion as part of our next generation submarine’. Extraordinary – though for many it will be described as the final triumph of common sense. A country positioned as Australia is, with our resources, should of course be nuclear they will say. Well, it seems that finally (beyond medical isotopes) we will be, leveraging the decades of expertise in the US and UK industries.
So, what are the rippling impacts of this simple yet seismic decision?
What happens to the French Naval Group Australia (NGA) designed Attack Class Submarine? It is no more. NGA will move to close its contract – be compensated (we should not expect that to be cheap) and depart our shores. Remember, not all the SEA 1000 investment is with NGA, the Lockheed Combat System should be fine, infrastructure fine, most of the skills development won’t go to waste. But there are billions tied up in NGA and the consequences of contractual termination.
Will Australian Industry Content be a loser? Probably not. Aside from the nuclear propulsion system, there is still plenty of work to be done in Adelaide and once in service Western Australia. If time is now of the essence, the first one or two boats built in the UK, employing their live production line would seem to make sense. There is an 18 month establishment phase now – exactly what could be built where, by whom and when will be agreed. I don’t see Australia building the nuclear reactor, but all else should be on the table. And if we step back and look at the broader aspiration of the AUKUS Technology Pact and see Tomahawks, Cyber & AI, Sovereign Weapon investments and Integrated Air Defence – there are alternative places for those jobs to land.
Will we still get 12 submarines? Probably not. 12 was a function of diesel technology, transit times and mission sets – this all changes with nuclear. This is good news for Navy and the ominous crewing challenge it was facing. But more than the current six Collins Class boats is on the cards, and with that the prospect of ‘continuous shipbuilding’ remains alive. With a critical mass of ships and submarines a regular drumbeat of builds and launches is feasible – the holy grail for Australia’s shipbuilders. The hard question to answer is ‘when’ will we see a nuclear boat in the water. 10 years? 15 years? Even if Boat 1 is built entirely overseas there will be design changes to incorporate, extant production commitments to side-step, not to mention the redesign and re-skilling of our Navy’s submarine force.
Who will build them? Unclear but given the UK’s prominence in this I suspect BAE Systems may be about to become an exclusive ship and submarine builder in Australia. The UK Astute Class submarine is modern and likely the base design from which we will pivot. The NGA workforce will change polo shirts and continue on in many respects. But do we have all the rights skills investments now? No, it will need to be tweaked undoubtedly. We will learn from the US and UK and modify the (slow moving) workforce investments to add the nuclear elements now required. Not a degree or trade qualification commonly seen on Australian campuses.
What is nuclear stewardship and how much will it cost? Hard to say. Nobody in the UK or US will tell Australia ‘this is cheap and easy’. I suspect there are layers of costs and hidden investments that will – over time – make this nuclear choice look only a little less expensive than the escalating Attack Class estimates. Even if our nuclear propulsion system looks like a replaceable LNG cylinder this will take time and serious investment to get safe and into the force structure by 2040. To say there will be no ripples into Air Force, Army or Joint investment plans would be cavalier at this point. Less important and peripheral Integrated Investment Plan projects beware. Collins Life of Type Extension will be an early question – how few can we now get away with?
Are we going to see a nuclear energy sector rise in Australia? Well, that’s an interesting one. How long before the ‘virtuous circle’ of Australian nuclear energy is tabled? Australia mines uranium, fuels its submarines and uses our stable geology to long-term store it. Could we do that for the world too? And don’t let the reference to Quantum Computing slip by either. AUKUS will likely be a vehicle for all sorts of parallel investments, academic collaborations, industrial partnership, workforce secondments and exchanges. Australia may be applying to become a junior member of the nuclear club – but that’s still membership. It will come with a range of rights and obligations.