Will the AUKUS project hit taxpayers?

Navel Nuclear Submarine Cruising On Open Sea

Jim Chalmers has defended Australia’s nuclear submarine plans in the face of questions about how taxpayers are going to foot the massive bill and whether other programs such as the National Disability Insurance Scheme could be cut to pay for it.

The Treasurer said Australia “can’t afford not to” undertake the next stage in the AUKUS endeavour confirmed by Anthony Albanese alongside UK Prime Minister Rishi Sunak and US President Joe Biden in San Diego on Tuesday morning.

Under the “optimal pathway” revealed by the three leaders, Australia’s acquisition of nuclear submarines under the trilateral security agreement will cost $268bn to $368bn over the next 30 years.

Speaking to reporters in Western Australia after the Prime Minister’s announcement, Dr Chalmers acknowledged the AUKUS project involved a “big investment” but said it would “be worth every cent” by delivering “huge returns” for Australia’s national security and its economy.

Australia plans to purchase up to five US-made Virginia-class submarines as a stopgap measure before eight AUKUS-class submarines based on a British design are built in Adelaide, with the first to be completed by 2042.

The government says the project, which has bipartisan support, will create 20,000 local jobs over the next three decades and budget offsets mean it won’t drive up Defence spending until the 2026-27 financial year.

AUKUS will cost $9bn over the next four years, but the government says this will be offset by $6bn that had been allocated to the cancelled Attack-class submarine program and $3bn in savings that will be detailed in the upcoming Defence strategic review.

But the revelation of the plan’s enormous overall cost has already triggered questions about how an already under-strain budget will handle it.

Opposition Leader Peter Dutton on Monday night suggested the Coalition would support budget cuts to programs such as the NDIS to help fund the AUKUS deal.

Asked about his comments on Tuesday, Mr Dutton said the Coalition would continue to support the NDIS but demanded the program be made sustainable.

“The last thing you want to do is have an important program like that, which is crucial to provide dignity and support to people with disabilities, that is financially unviable,” he said.

Since forming government, Labor has routinely named Defence spending as one of the five biggest pressures facing the budget along with the ballooning cost of the NDIS and other public services.

With the annual running cost of the NDIS forecast to hit $50bn in 2026, Mr Albanese has conceded the program needs to be sustainable. Labor is carrying out a 12-month review of the scheme to identify ways to improve services and cut “waste”.

Australian Council of Social Services chief executive officer Cassandra Goldie savaged the idea of reducing spending on the NDIS, especially in order to fund military capability, as “unconscionable”.

“We will absolutely oppose any notion that we should be looking at the NDIS for that purpose of funding Defence,” Ms Goldie told reporters in a pre-budget briefing on Tuesday.

“This is the time for us to be properly coming through with tax reforms to make sure that we’ve got a more adequate revenue base for these critical essential services.”

Defence Minister Richard Marles stopped short of ruling out cutting public services to fund AUKUS and wouldn’t be drawn on how the commonwealth could afford it.

“I’m not about to turn (this) into a press conference about what the budget looks like,” Mr Marles told reporters who pressed him on the issue on Tuesday morning.

“The important point to make about the cost in respect of forward estimates is that Defence is covering it – Defence is cost neutral with this over the forward estimates.”

Article Credited to Catie McLeod & Ellen Ransley, news.com.au

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