Beijing buys in to defence spending debate

China this week countered US warnings for Australia to lift defence spending with its own missive. Beijing via its emissary in Australia Xiao Qian urged Canberra to resist calls to boost funding warning China posed no threat to Australia and Canberra would be diverting much needed funding from vital social programs. The unwanted advice from Beijing now sees Australia caught squarely between its security guarantor and its leading trade partner and shows how difficult balancing the two relationships has become. The comments came as Foreign Minister Penny Wong travelled to the US for Quadrilateral talks involving the US, India, and Japan, including holding a separate bilateral meeting with US Secretary of State Marco Rubio. But the Foreign Minister insists Australia’s level of defence spending was not discussed. However, the US AUKUS review was, and Senator Wong said Mr Rubio had given her a good hearing on the importance of the deal for Australia, the UK, and US. Senator Wong said Australia was contributing to the US review on request. The US is conducting a 30-day review of the AUKUS agreement to see if it fits “America First’’ principles. The most vulnerable tenet of the deal remains the pledge to sell Australia three to five Virginia class submarines from 2032 over US shipbuilding production constraints. This is despite Australia supporting the US shipbuilding industry to the tune of US$3 billion as part of the agreement. Senator Wong also said Mr Rubio expressed regret for Mr Albanese missing a meeting with President Trump at the Group of Seven nations meeting in June when the US President left early to deal with the Middle East crisis. The two leaders have not met face to face in the eight months since President Trump assumed office.

Defence budget pressures force savings drive

It was reported this week that the ADF was being forced to make cuts to training and sustainment budgets in order to find scarce funds for the AUKUS program and new missiles. The Australian Financial Review (AFR) reported that the savings drive has raised concerns the prestige programs are becoming all-consuming at the expense of other Army, Air Force, and Navy capabilities. The savings drive also further raises the temperature over calls for increased defence spending with US Defense Secretary Pete Hegseth urging Australia to lift defence spending to at least 3.5 per cent of GDP or an extra $40 billion a year. NATO countries have also lifted defence spending to 5 per cent of GDP over the next decade. The AFR suggested parts of the defence budget were already being cannibalised to pay for new weapons. AIDN called for an increase in defence spending from both sides of politics ahead of the Federal election. AIDN CEO Mike Johnson this week reaffirmed the call for increased defence spending in responding to the AFR article. Mr Johnson said Australia’s defence capabilities needed to be funded to enable defence to meet its remit to defend Australia, but also to ensure sovereign Australian Defence Industry SME’s were provided with competitive and real opportunities to support the force.

Oz suppliers AUKUS readiness

H&B Defence is rapidly mobilising the nuclear expertise of its Joint Venture partners, HII and Babcock, to ensure Australian suppliers are AUKUS-ready. Just weeks after securing a contract to deliver the Australian Submarine Supplier Qualification (AUSSQ) Pilot Program, H&B Defence has seconded several HII subject-matter experts from the United States and engaged top-tier technical specialists from Babcock Australasia to bolster contract-support capacity. The integrated team of experienced nuclear program and quality assurance personnel will work in lockstep to conduct audits, technical assessments, and compliance checks across selected Australian suppliers. Together, they will pinpoint corrective actions and guide companies on their journey to becoming approved suppliers within the Newport News Shipyard, positioning them to compete for opportunities in the Virginia-class submarine build program in the US. This capability build is a core element of the AUSSQ Pilot Program, which seeks to forge new pathways for local businesses within the US branch of the AUKUS ecosystem. Since being appointed to deliver the AUSSQ Program in May, H&B Defence has released an Expression of Interest (EOI) for seven priority Work Packages—manufacturing focus areas deemed critical to driving Australia’s submarine ambitions forward.

Audit addresses warship defects

The Australian National Audit Office (ANAO) has found significant deficiencies in the sustainment of the Navy’s two 27,000 tonne Navy Landing Helicopter Dock ships. In a new report, the ANAO found sustainment of the vessels, HMAS Canberra, and HMAS Adelaide, was only partially effective and put availability and reliability of the LHDs at risk primarily due to the accumulation of urgent defects, maintenance backlogs and shortfalls in personnel to undertake organic level maintenance. It found that as a result the LHDs had experienced critical failures, impacting on Navy operations. The ANAO forecast at least $1.9 billion in ongoing upkeep costs to 2033-34. The ANAO made nine recommendations to improve sustainment performance and Defence agreed to all nine.

First patrol boat makes debut

This week marked the commissioning of the first of six Arafura offshore patrol vessels into the Royal Australian Navy fleet, more than three years later than originally planned. HMAS Arafura is the first Arafura class offshore patrol vessel (OPV) of the Navy’s six boats and was commissioned into the Navy at HMAS Stirling in WA. The build was beset by delays and cost overruns and the fleet reduced from 12 to six during the project. Navy’s OPVs will help patrol and secure Australia’s maritime border alongside the evolved Cape class patrol boats. They will also play a role in humanitarian and disaster relief, enhance regional engagement, and support other Navy missions. The Government’s Independent Analysis into Navy’s Surface Combatant Fleet (Surface Fleet Review) reaffirmed the need for the Arafura class OPVs whilst recommending they operate alongside the evolved Cape class patrol boats. HMAS Arafura was built by German shipbuilder Luerssen Australia at the Osborne Shipyard in South Australia. The second OPV, NUSHIP Eyre, has been built and is awaiting acceptance by Navy. The remaining four ships are under construction at the Henderson Shipyard in Western Australia.