Figures reveal $123 billion in contingencies for nuclear subs

An extraordinary $122.9 billion, that’s one-third of the $368 billion dollar price tag for nuclear submarines, has been allocated to a so-called “contingency” budget, according to new figures released by the Parliamentary Budget Office, commissioned by the Greens.

The PBO analysis, which is based on Defence figures, for the first time shows that $122.9 billion dollars has been earmarked for “contingency” funding as part of the government’s projected budget. The amount of contingency funding is setting off alarm bells about the sheer scale of no-strings-attached public funding allocated to the deal. 

The PBO figures also show the unfair intergenerational impact of the AUKUS subs. Hundreds of billions in costs will be heavily skewed to future budgets, forcing deep cuts to public spending for decades.

Australian Greens Defence Spokesperson Senator David Shoebridge said:

“The Albanese government is giving Defence a totally unprecedented $122 billion stuff-up fund. This is a license to fail on contract negotiations and project delivery for the AUKUS submarine deal.

“It’s extraordinary that a whopping one third of the $368 billion nuclear submarines budget comes with no strings attached. 

“The scale of this contingency fund demonstrates that the government has no real idea how they will deliver these hugely expensive submarines or what the true costs of the nuclear sub deal will be.

“No serious project planner in any other industry would be allowed to have a third of the total budget as contingency - this is worse than a blank cheque, it’s an incentive for profligate Defence spending.

“For the AUKUS subs deal Defence has persuaded the Albanese government to take away any restraint on future spending or project delivery. When you add in the repeated failures of Defence to deliver past projects on time or on budget this is worse than negligent.

“To help sell the deal the Albanese government is burying the most exorbitant expenditure across future budgets, in a brazen attack on future generations. This is deceptive and reckless budgeting and it means young people and future generations will inherit a savage debt. 

“Babies who haven’t even been born yet will spend their lives paying for these nuclear subs rather than getting essential public services and support because Labor has signed up to this toxic deal.

“It’s grossly unjust to steal from future generations to pay for today’s political mistakes, but that’s exactly what is happening here with our children and grandchildren saddled with the bulk of the $368 billion bill, ” Senator Shoebridge said.

Budget Analysis provided by the Parliamentary Budget Office below.