Aust signs biggest procurement deal in history with AUKUS agreement

With Australia, the UK and the US officially launching the new AUKUS defence programme, the Australian Government is confident that the pack will create huge supply chain opportunities for the country. 

The CIPS article states that the agreement within the trilateral security pact represents the biggest defence procurement project in history as the UK and the US will assist Australia in acquiring nuclear-powered submarines. 

In a press conference, Minister for Defence Industry and the Pacific Pat Conroy states that they will be working with AUKUS partners to identify specific opportunities for the Australian industry to participate in the nuclear submarine supply chain. 

“This will help ease the supply chain constraints the United Kingdom and the United States are currently experiencing, it will leverage the considerable expertise already present in the Australian industry,” he said. 

“And it will boost our capacity ahead of the commencement of the Australian build program.” 

With the AUKUS programme costing an estimated A$368bn and 20,000 jobs, the production of five of the UK-designed Virginia-class nuclear-powered attack subs has led to high hopes for Australian supply chains. 

Innes Willox, the chief executive of the National Employer Association Ai Group, stated that the project is possibly the largest engineering endeavour undertaken by Australia since the completion of the Snowy Mountain hydroelectric scheme in the 1970s. 

“The programme will contribute to skills development in Australia on a massive scale. Tens of thousands of jobs will eventually be created requiring upskilling as well as skill sharing among our AUKUS partners,” he said. 

However, it is currently unclear what exact percentage of the AUKUS supply chain will be contributed by Australian companies. 

According to Defence, companies from every state and territory in Australia will have the chance to participate and gain from these prospects for many years to come. 

The Australian government’s commitment to this initiative will necessitate funding for the phased approach, which will amount to around 0.15% of the GDP per year, averaged over the course of the program. 

“The AUKUS partnership is much more than submarines. Australia is making a massive technological commitment as part of the agreement,” Wilcox said. 

“There will be extensive spill-over benefits in technological advancement and technology sharing, including around artificial intelligence and quantum technology with its promise of major developments in weapons, communications, sensing and computing technology.” 

Wilcox also states that the next major priority for the AUKUS governments will be reducing trade, regulatory, and bureaucratic barriers that could hinder the partnership. 

The Australian Industry & Defense Network (AIDN), a defence industry association for SMEs, called on the Albanese government to ensure as much activity as possible is undertaken by Australian companies. 

“This is a unique opportunity for Australia, the US and the UK to develop a common supply chain to ensure that the full benefits of AUKUS can be realised,” the AIDN said.