US-Australia talks on AUKUS changes have been underway for 18 months

Australian officials have been engaged in discussions with their US counterparts for approximately 18 months regarding potential adjustments to the AUKUS security pact. These talks culminated in an announcement that Australia will acquire three second-hand Virginia-class submarines in the 2030s, a shift from the initial plan of two used and one new.

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Really, the beginning of last year.

This modification represents a significant alteration to the "optimal pathway" for AUKUS, first outlined in 2023. Australian government officials have argued that acquiring three "in-service" submarines was always a preferred option due to the operational simplicity of managing near-identical vessels. Vice Admiral Jonathan Mead, head of the Australian Submarine Agency, confirmed that intense discussions with the US began in early last year.

Vice-Admiral Mead explained that while Australia initially agreed to the best available deal in 2023, ongoing conversations explored the feasibility of shifting to three "in-service" submarines. Constraints in the US industrial base at the time prevented the sale of three such vessels, but this situation has since evolved. He noted that as the US production rates increased, the scope for acquiring "in-service" submarines expanded, leading to the recent agreement.

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What was available to us then was the optimal pathway. We have been working with the US now for about the last 12 months or more on seeing if there was scope, as their industrial base matured … as they began to climb their production rates, was there scope to turn production into an 'in-service'. That has been an ongoing conversation with the US, which we saw was agreed to.

Defence Minister Richard Marles stated that the change will result in meaningful budget savings, as both the purchase and maintenance of an "in-service" submarine are less expensive than a brand-new one. While acknowledging the contribution to cost reduction within the overall AUKUS program, Marles emphasized that this change does not fundamentally alter the total cost of the initiative. Australian Submarine Agency officials also provided details on the submarines, noting they will be transferred to Australia around six years into their operational life after significant maintenance in the US, retaining over 20 years of service for Australia.

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It will be significantly cheaper, that will help. It's a useful contribution to saving money in terms of the overall program, but across the life of the program this doesn't fundamentally change the cost of what we are seeking to do here.