'Cracks starting to show' in Australia's $368 billion nuclear submarine deal

Tuesday, 28 April 2026 11:58

More money and renewed political support is needed for Australia's mammoth defence project to become reality, a report warns.

The AUKUS nuclear submarines deal - Australia's most expensive defence project - is facing major hurdles, a report by British MPs warns.

Under the defence pact, estimated to cost more than $360 billion in coming decades. - the Australian navy would acquire eight nuclear-propelled (but not armed) submarines from the US and UK.

But in a report published overnight, the UK House of Commons Defence Committee warned that the British government needs to inject more money and political impetus for AUKUS to become a reality.

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"We have deep concerns cracks are already beginning to show when it comes to funding. The investment pipeline has already faltered," said its chair, Tan Dhesi MP.

Australia signed up to AUKUS in 2021 to counter rising Chinese power in the Asia Pacific.

The former Coalition government and current Albanese government said the long range and ability to remain hidden underwater for months of nuclear submarines would help maintain stability in the Asia-Pacific.

Under part of the agreement, Australia and Britain are collaborating to develop and construct a new class of nuclear-powered attack submarine, known as SSN-AUKUS.

But the Royal Australian Navy's plan to take delivery of five vessels by the early 2040s, built in South Australia, faces major hurdles.

"For the UK, delivering SSN-AUKUS will be a lengthy and complex undertaking requiring a sustained financial commitment from government across several electoral cycles," the report said.

Alarm bells have also been sounded on the plan by the US Navy to sell Australia up to five of its Virginia-class nuclear submarines by 2035.

Faltering production rates at US shipyards were a "a matter of concern", and "a potential risk" to the deal, the House of Commons report said.

Australian taxpayers have so far given a combined $10 billion to the US and Britain to bolster their shipbuilding industries as part of AUKUS.

The final cost for Australia has been estimated at about $368 billion by the mid-2050s.

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