Australia to invest additional $262 million to support AUKUS submarine supply chain

The Australian Government has decided to invest an additional $262 million to support local defense industry uplift and develop Australia’s AUKUS nuclear-powered submarine supply chain.

As disclosed, over the next two years, the country will fund a range of initiatives to uplift the local defense industry, supporting around 125 businesses across Australia to meet the standards of submarine build and sustainment activities in AUKUS nations. 

This includes new initiatives and support for existing programs. The first tranche of funding will support the industry through:

• The Defence Industry Development Grants Program: further investment into eligible Australian businesses intending to participate in the AUKUS submarine supply chain to receive timely uplift funding for security, skills, international accreditations, and manufacturing capital equipment for defense domestic or export supply chains.
• The Global Supply Chain Program: expanding the program to support major UK and US submarine industry suppliers to provide commercial opportunities for Australian suppliers and increase Australian participation in trilateral supply chains.
• The Defence Industry Vendor Qualification Program: expanding and accelerating the qualification of Australian products (including, mechanical assemblies, castings, forgings, and electro-mechanical components) into US submarine supply chains. This includes working with AUKUS partners to streamline processes and reduce regulatory friction for Australian businesses.

This investment comes as the AUKUS Naval Nuclear Propulsion Agreement, signed last August, enters into force. 

The agreement will enable the transfer of Virginia-class submarines from the US to Australia in the 2030s, as well as the transfer of information and equipment from the UK for use in Australia’s SSN-AUKUS submarines. 

“We are continuing to build and invest in an Australian submarine industrial base capable of supporting our future nuclear-powered submarine fleet and underpinning a strong local economy over the coming decades,” Deputy Prime Minister Richard Marles said.

“This new AUKUS agreement now in effect will further bolster the strong continued progress the Australian Government is making with AUKUS partners to deliver Australia this vital capability. This is a further demonstration that AUKUS is happening now.”

“The Australian Government continues to work in a targeted way with our AUKUS partners and Australian industry to get Australian products into UK and US supply chains. These additional investments by the Albanese Government are further supporting Australian industry by enhancing access, building skills and bolstering commercial opportunities,” Minister for Defense Industry and Capability Delivery Pat Conroy stated.

The Australian Government has selected BAE Systems and ASC to build Australia’s new fleet of nuclear-powered submarines as part of the AUKUS program. Last month, the partners, together with the Australian Submarine Agency (ASA), signed a tasking statement, a contractual agreement that supports the joint development of a build strategy, supply chain management plans, and a workforce development strategy under the AUKUS pact.