A United States funding package authorising more military aid for Ukraine and Israel passed by Congress on Tuesday includes a A$5bn boost for the US domestic submarine-building industry that will directly enable the Aukus agreement.
The funding was a condition of congressional endorsement of the Aukus deal and is aimed at ensuring the US can produce Virginia-class nuclear-powered submarines for Australia without undermining its own capability requirements.
The US president, Joe Biden, has earmarked a further $17.5bn in funding for the US submarine industrial base over five years, as part of the presidential budget request for the next financial year.
To further ensure the Aukus submarines can be delivered on schedule, the Australian government has previously confirmed it is also contributing directly to the US’ submarine-building capability with its own $4.6bn funding commitment.
A spokesperson for the defence minister, Richard Marles, welcomed confirmation of the congressional funding, which passed the US House of Representatives on 20 April and the Senate on 23 April.
“The United States, Australia and the United Kingdom are all investing significantly to build up our respective industrial capacity to ensure the success of AUKUS,” the spokesperson said.
The submarine funding is part of a broader $12.5bn injection of American funds contained within the omnibus military aid bill that is dedicated to the Indo-Pacific region and aimed at countering Chinese influence.
The Indo-Pacific funding includes a specific $3bn financing program for Taiwan and countries that have provided support to Taiwan at the US’ request. Another $830m is earmarked for the US’ military capabilities in the region, through its Indo-Pacific command.
The legislative package also doubles the size of military financing loans and expands the eligibility for loans and loan guarantees. Previously only available to Ukraine and other allies within the North Atlantic Treaty Organisation, they will now also be open to “major non-NATO allies and the Indo-Pacific region”.
Biden said he was grateful to Congress for greenlighting the $146.5bn total funding package.
“It gives vital support to America’s partners – so they can defend themselves against threats to their sovereignty and to the lives and freedom of their citizens,” Biden said. “And it’s an investment in our own security, because when our allies are stronger – and I want to make this point again and again – when our allies are stronger, we are stronger.”
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Biden acknowledged that securing bipartisan congressional support for the package had not been straightforward.
“It’s a path – to my desk, it was a difficult path,” he said. “It should have been easier, and it should have gotten there sooner. But in the end, we did what America always does: We rose to the moment, we came together, and we got it done.”
Speaking to journalists in Washington DC on Wednesday morning about the bill’s passage the night before, the president highlighted the importance of the separate funding boosts for Ukraine and for Israel.
He did not mention the Indo-Pacific funding.
Last year, the governments of the Aukus partners – Australia, the UK and the US – announced that a new special Aukus submarine would be designed and built in the UK under the first pillar of the agreement.
In the interim, Australia is extending the life of the existing Collins class conventionally powered submarines. The US has agreed to sell Australia at least three – and possibly as many as five – Virginia-class submarines to guard against any capability gap until the new Aukus submarines are available in the 2030s.