Deputy Prime Minister Richard Marles says Australia will be able to acquire nuclear-powered submarines by the deadline set out in the AUKUS alliance without imposing any new taxes on Australians to fund it.
Representatives from Australia, the United States and the United Kingdom gathered in Washington DC for the first AUKUS defence ministers' meeting since the security pact was signed last year.
A key goal of the AUKUS agreement is to map out a pathway for Australia to acquire nuclear-powered submarines.
The technology is considered important for Australia's future defence capabilities because nuclear subs are powered by reactors that do not need to be refuelled for many years.
They are also valuable because they are quieter than conventionally powered submarines and can remain underwater for several months at a time.
America's willingness to share its technology is seen as a reflection of the Biden administration's commitment to increase its presence in the Indo-Pacific.
Yesterday, US Defence Secretary Lloyd Austin said China represented the greatest threat to stability in the region.
"There is an enormous sense of shared mission and momentum across all three countries, in having Australia acquire a nuclear powered submarine," Mr Marles said after the AUKUS meeting.
"The significance of that step shouldn't be lost on people — there's only been one occasion where a country has shared that capability with another and that was the United States with the United Kingdom a long time ago."
But questions remain about how Australia will pay for a nuclear-powered submarine and how the alliance can deliver on its promise to figure out a plan by March 2023.
'This is a huge endeavour that the nation will be pursuing'
The cost of a nuclear-powered submarine varies, but the US Congressional Budget Office estimated that a Virginia-class sub cost about $US5.5 billion ($8.16 billion) per hull in 2019.
When asked if Australians should expect new taxes to fund such a purchase, Mr Marles ruled that out.
"No," he said.
"The cost of the submarines is something that will form part of the announcements that we make in the first part of next year.
"That'll be in in general terms, because, by definition, we're talking about a very long program."
Under the pact, the UK and the US agreed to help Australia build and operate its own fleet of nuclear-propelled submarines by 2040.
"There is an enormous amount of work which is being undertaken, we're not by any means taking for granted the scale of the challenge here," Mr Marles said.
"This is a huge endeavour that the nation will be pursuing."
How does AUKUS solve Australia's 'capability gap'?
Last year, the US, UK and Australia unveiled its new security deal, known as AUKUS, which had been quietly negotiated over several months.
The announcement enraged France because Australia had a pre-existing contract with French shipyards to build conventionally-powered submarines.
When asked by the ABC if he thought Australia lied to him about AUKUS, French President Emmanuel Macron angrily replied: "I don't think, I know".
Australia gave France's Naval Group $868 million as compensation for bailing on the contract.
But in the year since AUKUS was announced, there has been little public progress made in figuring out how to bring the subs deal to life.
To get the submarines to Australia as swiftly as possible, they would likely need to be built in the US.
A top Republican congressman has said American shipyards do not have the capacity to interrupt their own production schedule to make a submarine for Australia.
"I just don't see how we're going to build a submarine and sell it to Australia during that time," said Virginia congressman Rob Wittman, who is the most senior Republican on the House Armed Services Committee's seapower subcommittee.
During AUSMIN talks in Washington DC yesterday, Mr Austin said Australia risks a "capability gap" as its naval fleet ages.
"We recognise where Australia is and when its capability begins to diminish. And, of course, we will address all of that in that pathway that we create [with AUKUS]," he said.
"We will not allow Australia to have a capability gap going forward."
Australia hopes to announce by early 2023 which nuclear submarine it will acquire.
The US has insisted that AUKUS is on track to announce a "pathway forward" on the subs issue by the March deadline.
"Over the past 15 months, we've made great progress toward identifying a pathway for Australia to acquire conventionally armed and nuclear powered submarines," said Mr Austin.
"I want to reaffirm the US commitment to ensuring that Australia acquires this capability at the earliest possible date."
