Treasurer Jim Chalmers is speaking from Western Australia, where the first American and UK submarine rotations will arrive when they get to Australia.
The treasurer said he was being honest with Australians about the cost of the AUKUS submarine program, which will cost an average of 0.15 per cent of the country’s GDP each year of the program’s life until the middle of the 2050s.
In the coming decade, the projected costs are between $50 billion and $58 billion.
However, Chalmers said the government had already made space in the budget for $9 billion over the next four years’ forward estimates, meaning the cost won’t start to show until the 2027-28 budget.
Part of that offset comes from $3 billion in savings the government has found elsewhere in the defence portfolio.
The rest of the offset comes from the $24 billion the government had put aside for the now-canned French submarines over 10 years. ($6 billion of that amount will contribute to the $9 billion offset for the next four years).
Still, that leaves up to $31 billion for the government to come up with.
Chalmers said the government was being more upfront than Coalition over the true cost of the entire project because it had factored in additional expenditure such as training.
“We’re being up-front about the cost of this. It is a big cost, but it will deliver big returns for our national security and national economy… Australia can’t afford not to do this,” Chalmers said.
“We know that we’ve got substantial pressures on the budget. The big five fastest growing areas of spending on the budget are the interest costs on the Liberals’ $1 trillion debt that we inherited, the NDIS, aged care, health care and defence.
“What we’ve shown here is an ability to offset the cost of this over the forward estimates, partially offset the cost beyond that, but this is a game-changing investment. It will be worth every cent.”