The AUKUS trilateral security partnership between Australia, the United States, and the United Kingdom has been hailed as a significant step in bolstering security in the Indo-Pacific region. Announced in 2021, the pact’s flagship initiative is Australia’s acquisition of nuclear-powered submarines, marking a significant shift in the nation’s defense capabilities. However, recent concerns have emerged regarding the cost and viability of this ambitious project. A report from the Congressional Research Service (CRS), a US government entity providing policy briefings, has warned that the perception of the project as “too big to fail” could elevate the risk of cost overruns and undermine its overall effectiveness.
The CRS report, which revisits earlier assessments, highlights critical issues related to the management, cost-benefit analysis, and the long-term implications of the AUKUS submarine project. The concerns raised extend to the potential consequences of an attitude that assumes the project’s success as inevitable, even at the cost of financial prudence.
At the heart of the CRS report’s warnings is the notion that the AUKUS submarine project could suffer from what experts refer to as a “too big to fail” mentality. The CRS specifically cited comments from Australian Defence Minister Richard Marles, who, in an interview with Guardian Australia in 2022, emphasized the deep commitment of Australia, the US, and the UK to the success of the submarine project. Marles stated that the collaboration placed all three nations in a position where the project was “too big for it to fail on the part of any of those countries.”
This declaration, while underscoring the strategic importance of the program, was met with caution in the CRS report. It noted that projects perceived as too critical to fail tend to attract more funding, even when faced with delays or cost blowouts, simply because halting the program is seen as politically and strategically untenable. The report referenced a 2020 study that demonstrated how managers often funnel additional resources into “megaprojects” once the perception takes hold that they are too expensive to abandon.
The CRS cautioned that such a mindset could exacerbate financial mismanagement, leading to bloated costs and potential delays in the delivery of the submarines. The US Congress report drew parallels with NASA’s costly space missions, which have suffered significant budget overruns due to a similar mindset. The former NASA inspector general, in testimony to Congress in 2018, described how the belief that certain projects were too important to be scrapped led to cascading cost increases that affected other programs.
The CRS also raised doubts about whether any rigorous cost-benefit analysis was conducted before the AUKUS submarine project was formally announced. The report contends that there is “little indication” that the parties involved thoroughly evaluated whether the proposed course of action—Australia’s purchase of at least three Virginia-class nuclear-powered submarines from the US in the 2030s—was the most cost-effective way to boost deterrence and warfighting capabilities.
The CRS’s concern is compounded by the fact that the Virginia-class submarines are already expensive and will require substantial financial and technological investments. The updated CRS paper suggests that alternative strategies, such as a “division of labor” model, could have been explored more extensively. This approach would see the US retain ownership of the submarines but operate some of them from Australian naval bases, reducing Australia’s financial burden while still enhancing defense cooperation.
However, while this option might appeal to the US from a financial and operational perspective, the CRS acknowledged that it would have profound implications for Australian sovereignty, as it would limit Australia’s independent control over its naval assets. For Australia, which has long emphasized the importance of sovereign defense capabilities, this option appears politically unpalatable.\
The CRS report also drew a comparison between the AUKUS project and Australia’s earlier experience with the acquisition of F-35 Joint Strike Fighter aircraft. In a 2012 submission to the Australian Parliament, retired Royal Australian Air Force air commodore E.J. Bushell criticized both US and Australian defense officials for adopting a “too big to fail” approach to the troubled F-35 program, despite a series of reports highlighting cost overruns and operational delays.
Bushell’s critique resonates with concerns raised in the CRS report, which warned that the same defensive posture taken with respect to the F-35 could be adopted for the AUKUS submarine project. Both programs, though vastly different in scope, reflect similar challenges in managing high-profile defense acquisitions where the political and strategic stakes are enormous.
The lesson from the F-35 program, as highlighted by Bushell, is that political and military leaders are often reluctant to publicly acknowledge failures or setbacks in such projects, which can lead to cost escalations and diminished overall effectiveness. The CRS report implies that without proper oversight and transparency, the AUKUS submarine program could face similar hurdles.
Another significant point raised by the CRS report is the potential strategic impact of the AUKUS deal on Australia’s defense sovereignty. While the agreement will undoubtedly enhance Australia’s military capabilities, particularly in the context of growing tensions in the Indo-Pacific region, the CRS warned that aspects of the deal could undermine Australian autonomy in decision-making, especially in the event of a conflict involving China.
The report revisited earlier comments by Richard Marles, who had stated that Australia had not given any pre-commitment to join the US in a war against China over Taiwan as part of the AUKUS deal. However, the CRS pointed out that if the Virginia-class submarines were involved in such a conflict, their deployment could be influenced by US strategic interests, potentially leaving Australia in a difficult position.
The CRS suggested that the proposed division of labor—where the US would retain ownership of the submarines while basing them in Australia—could further complicate matters. It argued that such an arrangement would effectively convert the submarines from Australian-controlled assets into resources that could be commandeered for US-led missions. This prospect has drawn criticism from some Australian defense analysts and political figures, including Greens defense spokesperson David Shoebridge, who described the division of labor proposal as a “strategic surrender” rather than a partnership.
The Australian government has remained steadfast in its support of the AUKUS submarine project, portraying it as a crucial step toward securing Australia’s future defense capabilities. Prime Minister Anthony Albanese and Defense Minister Richard Marles have repeatedly emphasized the strategic importance of the AUKUS deal, particularly in the context of regional power dynamics and China’s military expansion.
However, the CRS report’s warnings have sparked renewed debate in Australia about the potential costs and risks associated with the project. Critics, including members of the Australian Greens and defense analysts, have expressed concerns about the financial burden the project could place on Australian taxpayers, particularly if cost overruns occur. Shoebridge, in particular, has voiced apprehension over the long-term implications of the deal, arguing that it could lock Australia into a subordinate role in the alliance, with limited autonomy over its military assets.
Public opinion on the AUKUS deal remains divided. While some Australians view the project as a necessary investment in national security, others are wary of the financial costs and the possibility of Australia being drawn into a US-led conflict in the Indo-Pacific region.
As the AUKUS submarine project moves forward, the warnings from the Congressional Research Service serve as a timely reminder of the challenges that lie ahead. The “too big to fail” mentality identified in the CRS report underscores the need for rigorous oversight, transparent decision-making, and a willingness to adapt if cost overruns or strategic complications arise.
For Australia, the stakes are high. The acquisition of nuclear-powered submarines through the AUKUS deal is a bold and unprecedented move that will shape the nation’s defense posture for decades to come. However, ensuring that the project delivers value for money and enhances, rather than diminishes, Australian sovereignty will require careful management and ongoing scrutiny.
The Australian government continues to navigate these complex challenges, the success or failure of the AUKUS submarine project could have far-reaching consequences, not only for Australia’s defense capabilities but for its strategic relationships with the US and the UK in an increasingly volatile region.
