Posted on September 17, 2025
In short:
Labor has pledged to spend $12 billion over a decade on a defence hub to build naval ships and dock nuclear-powered submarines, with a hope of speeding up the delivery of AUKUS.
The pledge comes as US media reports Secretary of State Marco Rubio privately reassured Defence Minister Richard Marles the deal would go ahead, despite a Pentagon review into the arrangement.
What’s next?
Mr Marles on Sunday said he had been told when the AUKUS review would be finalised, but did not disclose when that would be.
The Albanese government will pour $12 billion into a submarine and naval shipbuilding facility in Western Australia, which it expects will be used to maintain American submarines in a bid to speed up the delivery of AUKUS.
For months, the Trump administration has been pressuring Australia to lift defence spending, while the Pentagon reviews the AUKUS deal against Donald Trump’s “America First” agenda.
Over the weekend, American media reported that US Secretary of State Marco Rubio had privately reassured Defence Minister Richard Marles the deal would go ahead.
Mr Marles did not explicitly confirm the reports on Sunday, but said he spoke with Mr Rubio about AUKUS during a visit to Washington and “really positive comments” were made.
The investment will expand a defence precinct at the Henderson shipyard near Perth.
The government’s new multi-billion-dollar funding commitment, unveiled a week before Prime Minister Anthony Albanese is scheduled to travel to the United States, will support the development of a major defence precinct in Henderson, south of Perth.
The funding will go towards construction of surface vessels for the Australian Defence Force, starting with the army’s new landing craft.
It will also be used to build docking stations for nuclear-powered submarines, with Australia expecting to receive its first Virginia-class submarine in the 2030s under the AUKUS agreement.
Mr Marles said he expected the Henderson facility would be used by the United States military for submarine maintenance under AUKUS.
“There is the opportunity here … of seeing much greater sea days for the American fleet occur by virtue of the use of Australia, by virtue of the cohort of people that we are building up right now to work on nuclear-powered submarines,” he told ABC’s Insiders.
“That is of enormous advantage in terms of getting more US Virginia-class submarines out to sea for the US Navy.
“It is an important part of creating the space for the first of those Virginia-class submarines to be transferred to Australia in the early 2030s.”
The money will also be spent on building maintenance facilities for surface combatant vessels and could help build Australia’s future general-purpose frigates.
Mr Albanese announced the funding in Perth on Sunday, alongside his deputy Mr Marles, Defence Personnel Minister Matt Keogh and Western Australia’s Premier Roger Cook.
“This world-class precinct will create more than 10,000 local jobs and strong opportunities for local industry,” he said.
“There’s no greater honour than serving our country in our nation’s uniform and my government is dedicated to investing in the defence capabilities that our nation requires to keep Australians safe.”
The government estimates the defence precinct in Henderson will cost about $25 billion over a decade.
An $8 billion operation is already underway south of Perth, where five nuclear-powered submarines and more than 1,000 American personnel will soon be based as part of Submarine Rotational Force-West.
The operation is the first sign of the AUKUS agreement in action, with up to four US Virginia-class submarines and one UK Astute-class submarine rotating through HMAS Stirling for maintenance and repairs from 2027.
The works are expected to entrench US military personnel and defence hardware into WA in a way that will be challenging to undo if the Trump administration loses interest in the security pact.
Spending boost before US trip
While the pledge will increase Australia’s overall defence spending, Mr Marles would not specify what the new figure would be as a percentage of GDP.
US officials have repeatedly called on the Australian government to raise its defence spending from around 2.2 per cent to 3.5 per cent of GDP.
Mr Marles declined to cite a specific figure, arguing that there were a range of ways to measure it.
“People can go off and do their calculations. At the end of the day what this is, is an additional $12 billion over the decade,” he said.
“And it takes our increased defence spending since we came to government to the better part of $70 billion over the decade.”
Richard Marles posted a photo of his encounter with Defence Secretary and Vice-President JD Vance to social media.
In response to a question about whether the Henderson announcement was timed to coincide with his trip to the United States, Mr Albanese said: “Australia has always pulled our weight. We pay our way and we contribute to our alliance each and every day.”
“This is an Australian decision for Australia’s national interest … We’re investing in our capability, that’s what we’re doing.”
The Pentagon’s review of AUKUS, announced in June, has cast doubt over the White House’s support for the trilateral agreement.
Mr Marles said he had been given a timeline for when the review of the deal would be finalised, but declined to divulge when that would be.
“The Americans have actually been very good with us in terms of taking us through the process of how this review will be undertaken and also how we can contribute and we will,” he said.
Perth will soon become home for hundreds of American service personnel.
The defence minister made a hastily arranged trip to Washington DC last month, where he met with senior Trump administration officials including US Vice-President JD Vance.
In a bizarre misstep, the Pentagon initially denied Mr Marles had a meeting with US Defense Secretary Pete Hegseth — instead characterising it as a “happenstance encounter” — before later walking back that statement.
Mr Albanese recently had his fourth phone call with Mr Trump, but has so far failed to secure a face-to-face meeting with the president.
That could change when he travels to New York later month for the United Nations General Assembly.
Shadow defence minister Angus Taylor welcomed the government’s investment, but said it had come too late.
“We need readiness, not just rhetoric; we need spending to get to 3 per cent of GDP,” he said.
“We are facing the most dangerous strategic circumstances since the Second World War. We need a defence force that is ready and prepared. We don’t have that.”
