Former long-serving SA MP and Foreign Minister Alexander Downer has likened the decision to build AUKUS nuclear submarines in Adelaide to “pork barrelling”, saying they should be built in England and the billions saved spent on making South Australia a national technology hub.
Downer, who held the Adelaide Hills seat of Mayo and served as federal Liberal Party leader, Foreign Minister from 1996-2007 and then as Australia’s High Commissioner to the UK, made the comments in an opinion piece published in The Advertiser on Tuesday.
Downer said he was both “enthusiastic and yet pessimistic” about last week’s AUKUS announcement for Australia to buy and build a fleet of nuclear submarines.
The deal involves buying US Virginia-class submarines before a new boat is designed and built, first at Barrow-in-Furness in England then at Osborne in Adelaide’s north-west, at an estimated total cost of up to $368 billion.
Premier Peter Malinauskas this week returned from a lightning visit to the UK to tour the Barrow-in-Furness site and meet defence and other officials.
Downer said the AUKUS decision showed that Australia was a serious player in the Indo-Pacific region, prepared to pay “serious money” on submarines as part of regional peacekeeping commitments.
But Downer said the deal’s downside was the cost.
“It is astronomical. The current back-of-the-envelope estimates are that it will cost the Australian taxpayers more than $360bn,” he wrote.
“To put that into some perspective, that is three times the gross state product of South Australia. Of course it doesn’t all have to be paid out in one year. This will be $360bn over many years. But it is still a huge amount of money.”
Downer said that the AUKUS commitment would strain defence and federal budgets at a time of increased demand for social and community services and a commitment to net zero emissions by 2050.
“Well, to achieve net zero – if that’s even possible – will involve simply massive public expenditure,” Downer wrote. “So what will happen in the years ahead as the bills for AUKUS start to mount?
“I’m sorry to say, as a South Australian born and raised, that the temptation for future governments will be to have the new AUKUS class submarines built in Britain.
“It is estimated that to build those submarines in Adelaide will incur a 40 per cent premium. That is a tens-of-billions-of-dollars premium to build submarines in Adelaide rather than at Barrow-in-Furness in England.
“It’s always been nice for South Australian federal politicians – including myself – to boast about defence jobs coming to the state. In my time as foreign minister, we diverted the air warfare destroyer project to Adelaide. It created a lot of jobs and generated some pride in the state. But it certainly cost a good deal of money.”
Downer said that “South Australians should reflect on whether any of this pork-barrelling makes long-term sense for the state”.
“Let’s just suggest that it costs about $40bn extra to build the submarines in SA rather than in England. This, the federal government claims, will create thousands of jobs in SA,” he wrote.
“But wouldn’t it make more sense for the federal government to provide billions of dollars of support for South Australian advanced technology businesses? This would turn SA into the national technology hub and invest in Adelaide‘s universities, rather than spending all that money on building submarines in Adelaide.
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“So, in that sense, I am a South Australian heretic. I know almost no one in the state agrees with me, but I think for less money we would get a much better outcome for the welfare of the state than we will ever get from building submarines.
“Submarines should be built where there is a comparative advantage to build them and that in this case is at Barrow-in-Furness.
“Australia will get much cheaper submarines that way and an SA compensation package could create more jobs, more wealth and more growth than could ever come from building submarines.”
Premier Malinauskas said that “as a Foreign Affairs Minister for more than a decade, Alexander Downer is entitled to have a view”.
“However, I respectfully disagree with Mr Downer’s contention,” he said.
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