Australia pays $676m to US as part of Aukus submarine deal ahead of defence meeting

SYDNEY – Australia has made its first US$500 million (S$675.6 million) payment to the United States under the Aukus nuclear submarine deal ahead of a meeting between their defence heads on Feb 7 in Washington.

Australian Defence Minister Richard Marles said the gesture showed that Canberra is paying its way as a security partner.

Mr Marles will be the first foreign counterpart hosted by US Defence Secretary Pete Hegseth

since his confirmation in the role

.

They are expected to discuss security in the Indo-Pacific region and the growing US military presence in Australia.

In early meetings with the Trump administration, Australia had emphasised plans to double its annual defence budget over the next decade to A$100 billion (S$84.9 billion) and noted that the US has its second-largest trade surplus of US$32 billion with Australia.

Under Aukus, Australia will pay US$3 billion to the US to boost the capacity of the latter’s submarine industry, and Washington will sell several Virginia-class nuclear-powered submarines to Australia, while Britain and Australia will later build a new Aukus-class submarine.

Australia transferred the US$500 million after a call between Mr Marles and Mr Hegseth on Jan 29.

Mr Marles said in a statement the payment “is an important investment – it is about Australia paying its way when it comes to Aukus by helping to uplift the US submarine industrial base so that Virginia-class submarines are available to be transferred to Australia”.

Australia has previously said it will spend A$18 billion upgrading a network of northern defence bases used by the US military, and A$8 billion on a defence naval base in Western Australia to support rotations of US nuclear-powered submarines.

Talks with Secretary of State Marco Rubio on Aukus, Australia’s biggest defence project, had been “very positive”, Foreign Minister Penny Wong said in January. REUTERS