https://www.malcolmturnbull.com.au/media/address-to-the-national-press-club-september-2021

29 September 2021With the swirl of media soundbites, the impression has been created that the Australian Government has replaced a diesel electric French designed submarine for a nuclear powered American, or British, one. This is not the case.

Australia now has no new submarine programme at all. We have cancelled the one we had with France and have a statement of intent with the UK and the US to examine the prospect of acquiring nuclear powered submarines.

Over the next eighteen months there will be a review of the possibilities – the biggest probably being whether the new submarine should be based on the UK Astute^[1] submarine or the larger US Virginia class^[2].

The hyperbole around the new AUKUS partnership has been dialed up to 11. No three nations in the world already have closer security, intelligence, and technology collaboration than Australia, the US and the UK. And it has been getting closer in recent years. As Canada’s Justin Trudeau observed this is all about selling submarines to Australia^[3].

The Australian Government has chosen to terminate a contract with France’s largely state-owned Naval Group to build 12 Attack class submarines. While based on the design of France’s latest nuclear sub they were to be conventionally powered – a modification stipulated by Australia in the competitive tender process begun in 2015 and concluded in April 2016 when it was approved by my Government’s NSC of which the current Prime Minister, Defense Minister and Foreign Minister were all members. 

But nothing is agreed. There is no design, no costing, no contract. The only certainty is that we won’t have new submarines for 20 years and their cost will be a lot more than the French subs. However, high hopes and good intentions are in abundance. But there were plenty of them when we did the deal with France too. 

The first of the Attack class^[4] submarines was to be in the water by 2032, with the rest of the fleet coming out of the shipyards every two years until the full complement had been constructed. It was the largest defence procurement in our history – a partnership of generations between France and Australia.

The nagging concern about the French submarines was that they were not nuclear powered. Nuclear powered subs have unlimited underwater range – nuclear reactors, unlike diesel engines, do not need oxygen. Their endurance is only limited by the need to keep the crew sustained. They can operate at much higher sustained speeds underwater, about 25 knots, than a diesel/electric submarine.  And they don’t need to surface, or snort, to recharge their batteries by running their diesel motors.

So, given the long distances our subs have to travel, and our vast maritime domain, why did Australia decide not to order nuclear powered submarines? The answer is, or was, that we do not have, and by law are not able to have, a civil nuclear industry which is needed to support the maintenance of a nuclear navy. There is no country with a nuclear navy that does not also have a civil nuclear industry.

The choice of a conventional submarine had been made long before I became Prime Minister, and the competitive tender was well underway. This determination was confirmed to us on numerous occasions not just by our own Navy, but by the expert advisory board chaired by Don Winter, an engineer and former US Secretary of the Navy and included three US Navy Admirals with direct command and engineering experience in nuclear submarines.^[5]

There were three bids – from France, Japan and Germany.  It was my Government, which chose the French bid on the basis that it was the best – especially in terms of stealthiness, which is the prime requirement for a submarine. 

In 2018 I tasked the Defence Department to formally reconsider the potential for nuclear powered submarines in Australia. Technologies were changing, the risk environment was worsening, I was concerned that conventionally powered boats would not be good enough in the future. The big question, however, remained whether we could sustain and maintain a nuclear-powered navy in Australia without local, Australian nuclear facilities and the advice remained that we could not.

Leaving aside the politics it was plain enough that we did not need a civil nuclear industry to generate electricity. It was very clear that the cheapest forms of new generation were renewables backed by storage – batteries or pumped hydro. So, any local nuclear industry would have as its overwhelming justification the support of a nuclear navy.

The alternative, I was advised, would have been to have a nuclear-powered sub that required maintenance in another country. This would have meant our submarine capability was not sovereign – if you can’t maintain your own ships, you are not in full control of them.

One of the attractions of the French subs was that they were originally designed for nuclear propulsion. So, if we decided to switch to nuclear we had a partner that had the expertise to do it with us.

In its natural state uranium is 99% made up of a stable isotope U238, the unstable radioactive isotope U235 is only about 0.7%. The more U235, the more radiation, reactivity and energy. Highly enriched Uranium (HEU) has a concentration of 20% or more U235. Low enriched uranium (LEU) as used in nuclear power stations is typically between 2-5%.

The United States, United Kingdom and Russia are the only countries still to use HEU in their naval reactors. It is enriched to about 95% and is drawn from stockpiles built up for nuclear weapons. 

For Australia, a non-nuclear weapons state, using HEU in a submarine is not a breach of the Treaty on Non Proliferation (NPT), but it does set a precedent which other currently non-nuclear weapons states, like Iran, will seek to exploit as a justification for producing HEU.

Following the AUKUS announcement, I was advised by the Government that the work I had commenced on nuclear options continued and it had been concluded that Australia could use the modular HEU reactors currently deployed in the UK Astute and US Virginia class submarines which, because of their HEU fuel, do not require replacement during the 35 year life of the sub. This, it is contended, means that Australia could have a nuclear-powered submarine without any need to maintain, service or refuel the nuclear reactor.

This is very different advice to that given to the Government as recently as three years ago. It sounds too good to be true; Australia would have submarines powered by nuclear reactors running on weapons grade uranium. And we would not need to have any of our own nuclear facilities or expertise? 

Is it credible to have a hands-off plug and play nuclear reactor filled with weapons grade uranium and not inspect it for 35 years?  The US and UK will know for sure in about thirty years.  And until then if something does go wrong, both nations have extensive nuclear facilities and expertise to deal with it.

Australia does not.

The French nuclear propulsion system however uses low enriched uranium (LEU) – somewhat more enriched than that used in civil nuclear plants. By law they inspect their reactors and refuel them every ten years. All submarines go in for a lengthy, year or more, refit every decade. The refueling of the French naval reactor takes a few weeks.   In this regard at least, French naval nuclear reactor safety standards are stricter than those applied in the United States and the UK.

The new AUKUS submarines, we are told, will still be built in Adelaide. But if there are no nuclear facilities there, that must mean the submarine hulls will be transported to the US or the UK to have the reactor installed together with all of the safety and other systems connected to it.

You don’t need to be especially cynical to see it won’t be long before someone argues it looks much simpler to have the first submarine built in the US or the UK, and then the second, third and so on.

Australia is the first country to receive access to US naval reactors since the technology transfer to the UK in 1958. But the UK was and remains a nuclear weapons state with a substantial civil nuclear industry. Australia will be the first country without any civil nuclear industry to operate a nuclear submarine and the first non-nuclear weapon state to use HEU in a naval reactor. So, if we are not going to develop nuclear facilities of our own (as Mr Morrison has promised) then we will no more be sharing nuclear technology with the US than the owner of an iPhone is sharing smartphone technology with Apple.

A new submarine, under the new AUKUS arrangement, would not be in the water until 2040, we are told. That is about eight years after the first Attack class sub would have been in service. So, we are now without any new submarines for the best part of 20 years. In the meantime, the Collins Class submarines are going to be refitted so they can last another decade. Let’s hope that works. But it doesn’t get us to 2040. So whichever way you look at this there is going to be an even bigger capability gap.

For several years now the Attack Class submarine programme has been accused of cost blow outs – from $50 to $90 billion. The $50 billion was the estimate of the cost of the total programme in 2016 dollars. This included the Lockheed Martin combat and weapons system and the construction of a new dockyard in Adelaide. The $90 billion figure is no more than the estimated cost of the project in nominal dollars over its 35- year life. It is a rough estimate based on assumptions about inflation, exchange rates and technologies over decades.^[6]

Of course, now that the flurry of the media announcement is over, the question remains whether we will be able to negotiate a satisfactory deal with the US and UK to deliver a nuclear-powered submarine for Australia. If the Astute is preferred because of its size, then for practical purposes we will be price takers. 

Tony Abbott was of the view that Australia could not build the new diesel/electric submarines itself and his original plan was that they would all be built in Japan. With the support of my colleagues, I determined that all submarines should be built in Australia. This was to be the biggest element in a new continuous sovereign shipbuilding industry in Australia, itself an engine of innovation, science, and technology with enormous spillover benefits to the rest of the economy.

How can we maintain that commitment without having the nuclear facilities in Australia to enable maintenance and support of the new submarines’ reactor and connected systems? If that is where we are heading, and I believe it should be, then a reactor fueled with LEU is safer in every respect than one fueled with HEU.

Nonetheless, in 2040 if we have the first of a nuclear-powered submarine fleet, that will be a good development in that the submarine will have range and capabilities a diesel/electric boat does not.

But the way we are getting there has been clumsy, deceitful, and costly. Too many questions are not being asked, and fewer answered. The blustering attempts to wedge those who seek answers do not serve our national interest.

Our national security does not rely on fleets and armies alone. And that is just as well, for we will never have military might to match that of potential rivals.

Echoing our 2017 Foreign Affairs White Paper^[7], as Marise Payne said on Monday “Australia is respected when we engage with the region honestly and consistently.”^[8]

Diplomacy matters, and at the heart of diplomacy is trust. Australia’s reputation as a trusted and reliable partner has been an enormous asset to us on the international stage, just as a trustworthy reputation is an enormous asset to someone in business.

Some of you may have read the transcript (fairly accurate) of my notorious phone call with Donald Trump in January 2017 in which I persuaded him to stick to the refugee resettlement deal I had struck with President Obama. My argument was that America had given its word, and he should stick to it. When he suggested I had broken agreements in my business life, I said that I had not. Furious he may have been, but Trump did not renege on the deal.

Imagine if he had been able to say, “How about the time you double crossed the French?”

It was only a few years ago that our partnership with France was to be one for generations. As the sun set over Sydney Harbour in March 2018, from the deck of HMAS Canberra, President Macron described the partnership with Australia as the cornerstone of France’s Indo Pacific strategy. This was not just a contract to build submarines, it was a partnership between two nations in which France chose to entrust Australia with its most sensitive military secrets – the design of their latest submarines.

France is an Indo Pacific power. With two million citizens and 7,000 troops across the two oceans, drawing closer to France as a security partner made enormous sense both for us and the United States.

France is the world’s sixth (and the EU’s second) largest economy, a permanent member of the Security Council, a nuclear weapons state with its own nuclear technology for energy, naval propulsion and weapons. With Merkel’s retirement, Macron will be the most influential of the EU leaders. Always inclined to protectionism, France became a strong supporter of our bid for an FTA with the EU, invited Australia (for the first time) to the G7 and aligned its Indo Pacific strategy, and ultimately that of the EU, to ours.

Mr Morrison has not acted in good faith. He deliberately deceived France. He makes no defense of his conduct other than to say it was in Australia’s national interest. So, is that Mr Morrison’s ethical standard with which Australia is now tagged.: Australia will act honestly unless it is judged in our national interest to deceive?

It was as recently as 30 August that our Defence and Foreign Ministers met with their French counterparts and publicly re-emphasised the importance of the submarine programme. Two weeks later, on the day Mr Morrison dumped the President of France with a text message, the Department of Defence formally advised Naval Group that the project was on track and ready to enter into the next set of contracts.

The media has been gleefully briefed that Mr Morrison struck the deal with Boris Johnson and Joe Biden at the G20 in July shortly before going to Paris where the PM confirmed to President Macron his continuing commitment to the submarine deal.

France’s Foreign Minister has described Australia’s conduct as a stab in the back, a betrayal. Macron recalled his Ambassadors to Canberra and Washington. Dan Tehan can’t get a meeting with the French Trade Minister any more than he can with the Chinese Trade Minister.

France’s Europe Minister has already poured cold water on the prospects of concluding an EU-Australian free trade agreement. Australia has proved it can’t be trusted, he has said.

France believes it has been deceived and humiliated, and she was. This betrayal of trust will dog our relations with Europe for years. The Australian Government has treated the French Republic with contempt. It won’t be forgotten. Every time we seek to persuade another nation to trust us, somebody will be saying “Remember what they did to Macron? If they can throw France under a bus, what would they do to us?”

So, what should have been done? The conventional/nuclear debate was hardly news. Morrison could have told the truth.  He could have said to Macron that we wanted to explore the potential for acquiring nuclear powered submarines. Macron would have been supportive. The French Government had already invited such a discussion. The Americans, who were supplying the weapons system, should have been engaged. President Biden has acknowledged this has been mishandled and that there should have been “open consultations among allies on matters of strategic interest to France and our European partners.”^[9]

If after that honest discussion it was concluded that we could not use a French reactor, the inclusion of a US or British reactor could have been considered. Let us assume that after this discussion the conclusion was that only a US or UK submarine would do. If the contract was terminated at that point, nobody could say Australia had been dishonest or sneaky. France would be disappointed, but not betrayed, disrespected or humiliated.

Morrison’s response is to say that he could not be open and honest with Macron because the French might have run to Washington and urged Biden not to do the deal. That tells you a lot about how confident he is about the commitment of the Americans.

As Paul Kelly records^[10] (with approbation), Scott Morrison deliberately and elaborately set out to persuade the French their deal was on foot and proceeding until he knew he had an alternative deal whereupon he dumped the French and his deceitful conduct was exposed.

Despite this awkward birth, I hope that AUKUS turns out to be a great success. It should be. We are already the closest of friends and allies – none closer.

As Prime Minister I argued we should not see our region as a series of spokes connected to Washington or Beijing but rather as a mesh where nations like Australia would build their security by stronger ties with all our neighbours – great and small. This approach delivered a much stronger relationship with Indonesia and most nations of ASEAN. It secured in 2017 a commitment from the four leaders to revive the Quadrilateral dialogue between India, Japan, Australia and the USA. In the same year, with Shinzo Abe, we were able to defy the doubters (at home and abroad) and conclude the Trans Pacific Partnership without the United States.

Throughout this time, and since, our security alliance and cooperation with the United States became stronger and more intense. But we always made our own decisions. Of course, our rivals and critics have said Australia will always fall in with the US. Years ago, the foreign minister of one of our neighbours said to me, “If Australia is seen as just a branch office of the US, why should we take much time with you – better to talk direct to head office.”

If we want to have influence in our region we must be trusted. Our word must be our bond. We must be seen to have an independent foreign policy and sovereign defence capabilities. We need to have, develop and retain relationships with other nations, in our region and beyond – like the TPP – which are not simply derivatives of our alliance with the United States.

And at the heart of all this is trust.