HASC seapower leaders urge prompt DoD Australian AUKUS funds plan

The Republican chair and ranking Democrat of the House Armed Services seapower and projection forces subcommittee Tuesday asked Secretary of Defense Pete Hegseth for quick action on Australia’s recent submarine industrial base investment payment.

On Feb. 7 Australia sent the Defense Department a $500 million payment to invest in the U.S. domestic submarine industrial base as part of the AUKUS agreement. These funds are aimed at helping the industrial base ramp up production and capabilities to ultimately accommodate Australia buying at least three used and new Virginia-class attack submarines in the 2030s. 

In the 2040s Australia plans to be producing its first SSN-AUKUS boats domestically. 

“We look forward to receiving the required notifications detailed in the FY24 NDAA [National Defense Authorization Act] so that funding may be expeditiously made available for obligation to the U.S. submarine industrial base,” Rep. Trent Kelly (R-Miss. and Joe Courtney (D-Conn.), chairman and ranking member of the subcommittee respectively, wrote.

The NDAA from fiscal year 2024 included several provisions allowing the U.S. to accept payments from Australia, both to bolster the domestic industrial base and in payment for ultimately selling the two used and one new nuclear-armed submarines (SSN). Australia may ultimately buy up to five total Virginia-class submarines as a hedge to delays in SSN-AUKUS.

The law specifically says within 30 days of receiving contributions from Australia the administration must submit an unclassified report to Congress on the amount received, description of its intended use and any other related matters. The report may include a classified annex.

These Australian contribution funds were directed into a new “Submarine Security Activities Account” at the Treasury. The lawmakers reiterated these contributions should not be used to offset current or future cost growth in U.S. submarine procurement.

“Instead, we hope that these funds will be used to supplement ongoing efforts to increase submarine production, adhere to the enabling legislation, and reaffirm the United States’ commitment to the Australian government,” the lawmakers wrote.

The government expects this to be the first of several payments by Australia that will reach up to $3 billion total to help expand the U.S. submarine industrial base capacity. 

A version of this story was first published by Exchange Monitor affiliate Defense Daily.