Published: June 03, 2026, 05:47 UTC
The AUKUS Shrinkage: Australia Traded Custom-Built French Submarines for Secondhand American Boats
Once upon a time, Australia placed an order for twelve new submarines. They were to be designed specifically for Australian waters, built on a proper schedule, and tailored to replace an ageing fleet that was already past its prime. That deal was cancelled. What Australia is getting instead — in the name of a “streamlined” AUKUS partnership — is three used American submarines, already old by the time they arrive, at a cost that runs into the hundreds of billions.
When the AUKUS pact was announced in September 2021, the men in suits called it a historic realignment of the Indo-Pacific. The prime ministers stood shoulder to shoulder, the flags fluttered, and the speechwriters reached for words like “unprecedented” and “generational.” What they did not say — what they could not say without embarrassment — was that Australia had just torched a €35 billion contract with France, wrecked a diplomatic relationship that had taken decades to build, and paid a half-billion-euro settlement for the privilege.
Now, five years on, the real shape of this deal has come into focus. It is not what was promised. And the gap between the rhetoric and the reality grows larger each time the politicians revise their plan.
Let us examine what was lost and what remains.
The Deal That Was Cancelled
In 2016, after a rigorous and competitive selection process, Australia chose France’s Naval Group to build twelve Attack-class submarines. These were not off-the-shelf boats. They were to be a custom evolution of the Shortfin Barracuda design — a nuclear-powered hull adapted for conventional propulsion, purpose-built for Australian conditions. The waters off Western Australia, the Timor Sea, the approaches to the South China Sea: these are not the North Atlantic. A submarine designed for one ocean may be ill-suited for another. The French understood this. Their proposal was a bespoke solution for a specific strategic problem.
The schedule was equally deliberate. Twelve boats, delivered in phases, with the first entering service around 2032. This timeline matched the gradual retirement of the Collins-class submarines — boats commissioned in the 1990s but designed in the 1980s, already pushing the limits of their service lives. The French plan was not fast. It was sensible. It aligned the arrival of new capability with the departure of old.
The contract was valued at €35 billion — roughly $56 billion Australian. A large sum, certainly. But it bought twelve hulls, designed from the keel up for Australia’s needs, with a proper industrial pipeline to sustain them for decades.
The Breaking of the Promise
Then came September 15, 2021. The AUKUS announcement landed like a bomb. Australia would acquire nuclear-powered submarines through a new trilateral security pact with the United States and the United Kingdom. The French contract — “no longer meets our strategic needs” — was cancelled with a phone call.
Prime Minister Scott Morrison, according to reports that emerged later, had been negotiating the AUKUS deal in secret for months while publicly assuring France that all was well. President Macron learned about the cancellation from the media before the Australian government bothered to inform him directly. The French ambassador to Australia was withdrawn. The European Union postponed trade talks with Canberra. “This was a betrayal,” Macron said, and he was not wrong.
Australia paid €555 million — $585 million — to Naval Group as a settlement. Compensation for a contract that should never have been signed if it was going to be torn up. A penalty for bad faith.
What Australia Gets Instead
The original AUKUS plan, as laid out in 2023, was as follows: Australia would buy two secondhand Virginia-class submarines from the United States in the early 2030s, while a new Block VII Virginia would be built later to replace the third Collins-class boat. In the meantime, British and American submarines would rotate through Australian ports to maintain a continuous presence. The new SSN-AUKUS — a British-designed boat to be built from 2040 onward — would eventually provide Australia with genuinely new capability.
That was the plan. In late May 2026, the plan changed.
Under the “streamlined” arrangement announced by the three governments, Australia will now buy all three submarines from the same production block — meaning all three are secondhand. The new Block VII boat is gone. Australia gets three boats that have already served in the United States Navy, transferred before the end of their service lives.
Defense Minister Richard Marles called it “a simpler pathway” that delivers “significant” savings. But he also admitted it “doesn’t fundamentally change the equation.” When a defense minister uses the word “simpler” to describe buying secondhand submarines instead of new ones, you know the original plan was already in trouble.
The savings, Marles says, will be redirected to “sustainment and infrastructure.” One wonders whether “sustainment” and “infrastructure” are the words the government uses when it means that the United States Navy cannot build enough submarines to keep one for itself and sell one to Australia.
Dr Malcolm Davis of the Australian Strategic Policy Institute put it plainly: the third secondhand boat will have a shorter shelf-life than a new one. There is no guarantee, he added, that the US will have enough hulls to sell, given that American shipyards are already struggling to meet their own navy’s requirements. The United States Navy, as of 2026, has a submarine-building capacity that is stretched thin. It is building Virginia-class boats at a rate well below what its own force structure demands. It is not obvious that there will be spare submarines to transfer.
James Paterson, the shadow defense minister, said the shift “warrants a proper explanation from government.” That is a polite way of saying that no good explanation exists.
The Contrast
Let us be direct about what this means.
Australia cancelled a contract for twelve custom-designed submarines — boats that would have been purpose-built for Australian waters, on a timeline that matched the retirement of the old fleet — and paid a half-billion-dollar penalty for doing so. In their place, Australia gets three secondhand American submarines that were designed for the United States Navy, not for the Royal Australian Navy. They were built for the Atlantic and the Pacific, not for the Timor Sea and the approaches to Darwin. They have already spent years in service. Their remaining hull life is shorter than a new-build boat. And Australia is paying a total bill — for the entire AUKUS enterprise — that exceeds $240 billion.
More than two hundred and forty billion dollars. For three used submarines.
Ed Husic, a Labor MP, said it plainly: “This is not the deal promised.” He is right. It is a smaller deal, a weaker deal, and a more expensive deal than the one Australians were told about five years ago.
The French offer, by contrast, was a sure thing. Naval Group builds submarines. It has built them for France, for Chile, for Brazil, for Malaysia. It builds them on schedule, within budget, and to specification. The Attack-class boats would have been the most advanced conventionally-powered submarines in the world, designed for conditions that the French navy — which operates in every ocean — understands well. The timeline was achievable. The cost was fixed. The technology was proven.
None of that mattered. The deal was political, not strategic. AUKUS was never really about submarines. It was about signaling — about telling China that the Anglosphere was closing ranks. The submarines were the vehicle for that signal. The quality of the vehicle was secondary.
The Reckoning
Australia has spent five years and hundreds of millions of dollars walking away from a good deal and into a worse one. It has alienated a major European ally for the privilege. It has put its submarine replacement program — the single most important defense procurement in the nation’s history — in the hands of a shipbuilding industry that cannot keep up with its own navy’s demands. It is buying middle-aged boats at a premium, and calling it a bargain.
The honest question — the one nobody in Canberra wants to answer — is this: if the French offer was good enough to win a competitive tender in 2016, and if the AUKUS offer keeps shrinking year after year, what exactly was gained by tearing up the first contract?
The answer, if you look at what Australia now receives, is: not much. A flag on a map. A seat at a table. A promise that Britain and America will look after Australia when the water gets rough. Whether that promise is worth $240 billion and a broken relationship with France is a question the men in suits have not yet answered.
But they will have to. Because the Collins-class submarines will not last forever. And when they reach the end of their service lives, Australia will need boats that can go to sea and stay there. It will not have twelve. It will not have six. It will have three secondhand boats, already middle-aged, bought at a price that beggars belief.
That is the AUKUS deal. That is what Australia got for walking away from the French.