Australia has made a second $800m payment to the United States to boost its shipbuilding industry under the Aukus nuclear submarine deal, bringing total payments to $1.6bn. The payment was confirmed by Defence Minister Richard Marles, who said it was made in the second quarter of 2025 as part of Australia's commitment to contribute US$2bn by the end of the year.
The Aukus agreement, signed in 2023, involves Australia buying nuclear submarines from the US while also building its own in Adelaide. Australia has agreed to pay about $4.6bn towards enhancing US shipbuilding capacity, which has suffered from decades of under-investment. The US currently has fewer nuclear submarines than needed and is building them too slowly to replace its ageing fleet.
Prime Minister Anthony Albanese confirmed the payment followed an agreed schedule, committed to before the Trump administration announced a review of Aukus. The review, ordered by President Donald Trump in June, is being led by Pentagon policy chief Elbridge Colby, who has expressed scepticism about the deal, fearing it could leave US sailors under-resourced.
Australia is also paying the UK about $4.6bn to assist its shipbuilding industry. The US has asked Australia to raise its defence spending to 3.5% of GDP from the current 2%. The Aukus deal requires the US president to certify that selling submarines to Australia will not diminish US naval capability, a concern given US submarine fleet numbers are a quarter below target.
Marles told parliament that Aukus would deliver Australia a long-range submarine capability needed in a more contested world. The head of the Australian Submarine Agency, Vice-Admiral Jonathan Mead, said Australia's funding to the US industrial base was vital to accelerating production and sustainment of Virginia class submarines.
