Australia-US talks on AUKUS pact began early last year

Australian officials began talking with their US counterparts about changing the AUKUS pact around a year and a half ago, a Senate estimates hearing has heard.

Discussions began early last year, culminating in an announcement last weekend that Australia would buy three second-hand Virginia-class submarines in the 2030's, rather than two second-hand and one new.

The change is the most significant shift to the AUKUS 'optimal pathway' since it was announced in 2023.

The government has this week argued that buying three 'in-service' submarines has always been the preferred option, given the simplicity of operating three near-identical submarines.

Officials from the Australian Submarine Agency, which is tasked with overseeing Australia's acquisition of nuclear-powered submarines, were questioned at Senate estimates on details of the changes.

Vice-Admiral Jonathan Mead was asked when 'intense discussions' with the United States about the prospect of changing the plans began.

"Really, the beginning of last year," he said.

He said Australia had agreed to the best deal available in 2023, but there had been ongoing conversations about shifting to three 'in-service' submarines.

Vice-Admiral Mead said there were constraints on the US in 2023 that meant they could not agree to selling three in-service submarines, but that has changed over time.

"What was available to us then was the optimal pathway," he said.

"We have been working with the US now for about the last 12 months or more on seeing if there was scope — as their industrial base matured … as they began to climb their production rates — was there scope to turn production into an 'in-service'.

"That has been an ongoing conversation with the US, which we saw was agreed to."

Marles says second-hand subs cheaper, but won't alter AUKUS cost

The government has also argued the change will see budget savings, as it is cheaper to both buy and maintain an in-service submarine than a brand new one.

Questioned on how much money will be saved through the change, Defence Minister Richard Marles told the 7.30 program said it is meaningful.

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But he said in the overall scale of AUKUS, the changes would not represent a transformative change.

"It will be significantly cheaper, that will help," he said.

Australian Submarine Agency officials have also given new details on the Virginia-class submarines Australia is set to buy from 2032.

Officials told the estimates hearing that the submarines will be transferred to Australia roughly six years into their life, after undergoing a significant maintenance procedure in the US.

The submarines have an expected life of between 30 and 33 years, and so will have more than 20 years in Australian hands.