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June 1, 2026
Defence Minister Richard Marles says taxpayers will save money by ditching a plan to acquire a new and upgraded nuclear-powered submarine from the US but experts warn Australia will receive a less capable vessel with a shorter lifespan under the AUKUS shift.
Marles and US Defence Secretary Pete Hegseth on Saturday said the last of three Virginia-class submarines Australia plans to buy from the US will now be second hand rather than a new boat as originally planned.
Under the AUKUS plan announced in 2023, Australia was to buy a mix of new and second-hand submarines from the US. The vision was for two second-hand US submarines to arrive from 2032 and the third submarine was to be a new and improved Block VII Virginia-class boat.
All three vessels will now be used Block IV submarines that may already have been in service for years, compared with the 33-year lifespan of a new boat.
Marles defended the decision on the basis that it reduced complexity by ensuring all Virginia class boats were a consistent set, and there would be a ''significant'' reduction to the purchase price of the final US submarine and the associated training costs.
''We don't get the additional cost and complexity of operating a one off submarine which is different to all the rest,'' Marles said. ''That is the single biggest issue and challenge associated with that third
1HERSA1 A006 submarine if we keep it as it is, which is why we see this as a significantly good outcome.'' He declined to quantify what the saving would be, but he said it wouldn't substantially change the underlying cost of the AUKUS project.
''We need to be chasing savings where we can and be as prudent as possible, so [this decision] matters. But this is a big program, and we get this one submarine cheaper it doesn't fundamentally alter the overall envelope here, which is 0.15 per cent of GDP.'' Pressed on why Australia had sought a new submarine under the ''optimal'' AUKUS pathway if a used model represented a better outcome, Marles said: ''We are just as happy to go down this path because it very much does give us consistency.'' He declined to put a figure on how many years left of service the third submarine would have by the time it was transferred to Australian hands, but he said it would arrive in a condition consistent with the first and second used boats and that it would still have ''a lot years of service left''.
''We're getting a submarine well within its life, immediately after deep maintenance,'' he said. It would have ''more than half'' of its operational life left, he said.
The decision is widely believed to be linked to senior Pentagon official Elbridge Colby's AUKUS review, which was completed at the end of last year but has not been made public.
Colby had previously expressed concern that providing Virginia class submarines to Australia could deplete the US Navy's reserves, given sluggish American production rates.
Asked whether lags in the US production schedule had contributed to this shift in direction, Marles said: ''It's definitely not part of this decision at all.'' Marles, Hegseth and British Defence Secretary John Healey said in a statement that the decision was about ''simplifying supply chain management, operational and maintenance requirements, and maximising cost efficiencies''.
The government estimates the total cost of the AUKUS scheme will be between $268 billion and $368 billion over three decades, making it the biggest defence procurement project in Australian history.
Opposition defence spokesman James Paterson said: ''This appears to be a significant change of plan for acquisition of Virginia class submarines ... I will be seeking an explanation from Defence at Senate estimates this week about why this change was made and what the implications are.'' Former senior defence official Michael Shoebridge said: ''This is bad news. The new Virginias are more capable and easier to maintain ... The US aren't building enough submarines so they are keeping the more capable ones for themselves.'' The new Block VII submarine Australia had been slated to acquire from the late 2030s has been described by trade publication Army Recognition as ''one of the final and most advanced versions of the Virginia-class submarine, with improved stealth, greater use of unmanned underwater systems, and enhanced capability for long range strike and seabed operations''.
Virginia-class submarines are estimated to cost $US5 billion ($6.95 billion) each to produce, including weapons, according to the US congressional research service.
Marles said there had long been debate about whether Australia should seek to acquire a new submarine from the US, as this could mean the Australian navy would be operating four different types of submarine at once: the Collins class submarine, two types of Virginia-class submarine and the new SSN-AUKUS nuclear powered submarine being developed between Britain and Australia.
Greens senator David Shoebridge said it was ridiculous for Marles to paint the decision as a win for Australia, describing AUKUS as a ''dud deal'' for Australia.
''You cannot make this stuff up on AUKUS,'' he said.
Former naval officer Jennifer Parker said she supported the decision, while acknowledging there were downsides to the move.
''This reduces risk and complexity in what is already a very ambitious program,'' said Parker, an adjunct fellow in naval studies at UNSW.
''If the three submarines we buy come from the same block, they will have the same configuration, same training and maintenance requirements and same spare parts. We won't have to put them through the trials for initial certification. These boats will still be streets ahead of any other attack submarines in the world.'' However, she added: ''The third submarine will now be a less capable boat than it would have been and will have less life in it.
''It may have 20 years left of service rather than 33.''