Eye-watering cost of submarine program revealed as Scott Morrison signals increased defence spend

Australian taxpayers will have to wait to see just how much a landmark deal for nuclear submarines will cost as Scott Morrison signals defence spending will only increase as the threat of China in the region rises.

An eye-watering $2.4bn has been spent on Australia’s submarine program, but contracts with French company Naval Group will be torn up under the new AUKUS deal.

It means the program under way in Adelaide will be scrapped and replaced by the once-in-a-generation deal that in which Australia will acquire eight nuclear powered submarines with the help of the UK and US.

Prime Minister Scott Morrison dismissed criticism taxpayer funds had been wasted on the French program, describing it as an “investment”.

“We’ve invested $2.4bn in the attack class program and I say all of that investment, I believe, has further built our capability, and that is consistent with the decision that was taken back in 2016 for all the right reasons to protect Australia’s national security interests and has served that purpose,” he said on Thursday.

The cost and the timelines when Australia could hit the water with the new subs are yet to be determined, but Mr Morrison said he hoped the first submarine could be delivered “before the end of the next decade”.

“When it comes to the delivery of this program, I indicated that we anticipate being able to commence build this year, and the first of those submarines would be in the water, we believe, before the end of next decade and all partners will be working to ensure that is achieved at a date as soon as is possible to achieve,” he said.

“So there is a great motivation and incentive for all three of us to get on with this and to get it done as quickly and effectively and always paramountly as safely as possible.”

The opposition said it welcomed the program but called on the Prime Minister to be transparent in how much it will cost the taxpayer.

“After eight years, three prime ministers, six defence ministers, and billions of dollars of sunken costs in this program, this is the most expensive example of something that has characterised this government,” leader Anthony Albanese said.

“Australian taxpayers are entitled to know, given that under this government they began with arrangements with Japan, then arrangements with France, and now we have these arrangements with the United States and potentially the UK as well.”

Mr Morrison has flagged his intention to increase the nation’s defence spend. Defence spending currently sits at 2.1 per cent of Australia’s GDP.

Mr Morrison insisted the increase in spending would go hand-in-hand with the submarine deal but stopped short of committing to what that increase would be.

“The lift will only go up, it won't come back down,” he said.

“I haven‘t indicated any percentages and we’re not going to have future targets expressed in those terms. Our defence investment will be in response to the need and the capability requirements that are identified to address the many issues we have to and what this partnership produces for us.”

The UK and US defence spend amounts to 2.2 per cent and 3.5 per cent of GDP respectively.

Mr Morrison will head to Washington later in the week ahead of a meeting of the Quad nations at the White House next week.