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The US defence budget 2025 has thoroughly reignited Australia’s own corroding fear of being hung out to dry in the AUKUS Virginia Class submarine deal.
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US President Joe Biden’s fiscal year 2025 defence budget, unveiled on 11 March and based on the 2022 National Defense Strategy, detailed an $849.8 billion budget request to fund US military investment and operations during the 2025 fiscal year.
It outlined major investments such as $5.3 billion for the US Air Force’s B-21 long-range strike bomber, $9.9 billion for the Columbia Class ballistic missile submarine, $3.7 billion for the LGM-35 Sentinel intercontinental ballistic missile system, $12.4 billion for the F-35 Joint Strike Fighter program and other costings.
For Australia, the big news was always going to be contained in the drawdown of funding for the Virginia Class submarines.
Would the US have enough stock to allow the transfer of three Virginia Class submarines to Australia in the 2030s, promised under the 2024 National Defense Authorization Act, and avoid a capability gap left by the retirement of ageing Collins Class submarines?
More than $8.2 billion was marked for SSN 774 Virginia Class nuclear-powered submarine in the US defence budget request, more than $4 billion in funding allocated to the US submarine industrial base, and $11.1 billion over five years in funding to expand production.
The defence budget request confirms that the US Navy is likely on track for only one fast-attack submarine in 2025 and US industry is unlikely to produce two submarines per year until 2029.
“Department of Defense conducted the 2025 Submarine Industrial Base study to determine how to complete the once-in-a-generation recapitalisation of the Submarine Force needed to increase the United States’ ability to build and sustain attack submarines to meet US military requirements,” said a statement from the White House on 11 March.
“These investments will also support the administration’s commitments under AUKUS, the first major deliverable of which was the historic decision to support Australia acquiring conventionally-armed, nuclear-powered submarines.
“In line with the results on this study, the budget includes $3.4 billion for the SIB in 2025.”
US Under Secretary of Defense Comptroller and chief financial officer Michael McCord, speaking during a press briefing on President Biden’s fiscal 2025 defence budget in 11 March, said Virginia Class submarine production remains a priority as the administration refocuses on industry support.
“Virginia Class was not a budget-driven decision. And (the) Virginia Class is probably the primary example of something that was a management decision,” he said.
“Boats that are delivering, are supposed to deliver this year, are averaging over 30 months late. And we have more than a dozen on order that are still in production already.
“The question was, really, what can we do to get a better result, other than keep doing the same thing and hoping for a different result than what was [has] happened in the last couple of years?
“We’ve already had some beginnings of submarine industrial base investments. It was a priority in last year’s budget.
“Look at last year’s budget, this year’s budget, and the AUKUS supplemental, there’s a big investment in sort of three parts in the industrial. In the sub industrial base that we think is going to be money better spent than putting another submarine on order, that all analysis indicates we can’t get two submarines if we order them in 2025 any sooner than if we wait.
“Virginia Class (submarines), to be clear, was trying to sort of get to a better, healthier dynamic, where we can get to the two submarine-a-year production rate. And we thought that going a different direction was our best move.”
Aside from submarines, the fiscal year 2025 budget request for the Department of Defense also includes $143.2 billion in research, development, test, and evaluation, as well as $167.5 billion for procurement.
More than $61.2 billion is allocated for airpower to continue developing, modernising, and procuring lethal air forces; $48.1 billion for sea power, including new construction of six battle force fleet ships; and $13.0 billion for land power, supporting the modernisation of Army and Marine Corps combat equipment.
The FY 2025 budget requests $49.2 billion to modernise and recapitalise all the nuclear triad and provide a safe, secure, effective, and credible nuclear deterrent.
Other critical investments include $9.8 billion in long-range fires capability, $33.7 billion for vital space capabilities, and $14.5 billion for cyber space activities focused on three portfolios covering cyber security, cybers pace operations, and cyber research and development.
Outside mainland USA, the budget request outlines funding for ballistic missile defence activities in support of Guam, $9.9 billion for the Pacific Deterrence Initiative, $2.9 billion for the European Deterrence Initiative, $625.6 million in NATO military contribution, $434 million for the NATO Security Investment Program, and $300 million to fund the Ukraine Security Assistance Initiative.
“On Pacific deterrence, probably the biggest new news … was that we now have funding into follow in on or fall in or the NDAA authorisation of drawdown for Taiwan,” said US Under Secretary of Defense Comptroller McCord, during the press briefing.
“We now have $500 million in this budget to put funding against that, possibly, you know, would have liked to done [do] a little more, but this being a capped year we thought that was a good way to start against the $1 billion a year ceiling in the authorisation.”
Other investments in US military personnel include a 4.5 percent pay increase for service members and annual rate increases for both housing and subsistence allowances; $245.3 million for a proposed substantial increase to the income eligibility threshold for basic needs allowance; more than $120 million in additional funding for commissaries to provide service members with food savings of over 25 per cent compared to the local marketplace; $2 billion to support family housing to provide safe, high-quality residences for service members and their families; $1.1 billion in unaccompanied housing or barracks construction; $547 million to prevent suicide in the military; and $1.2 billion to prevent sexual assault and other harmful behaviours.
“The budget has, this year, a 4.5 per cent pay raise. (This is) the largest pay raise in 20 years combined across the last three years that’s now up to 15 per cent pay raise for the troops in addition to a very substantial increases in housing allowances and subsistence allowances,” said US Under Secretary of Defense Comptroller McCord, during the press briefing.
In support of the defence industrial base, funding has been allocated with $29.8 billion for conventional and precision-guided munitions, $4.0 billion in investments in the submarine industrial base, and $2.5 billion for microelectronics.
More than $19.8 billion is set aside to sustain, restore, and modernise DOD facilities and support readiness improvements.
“The President’s budget request for the Department of Defense is once again rooted in our 2022 National Defense Strategy, which continues to enable us to match our national resources to our national objectives,” said US Secretary of Defense Lloyd J Austin III on 11 March.
“This request will bolster our ability to defend our country, paced to the challenge posed by an increasingly aggressive People’s Republic of China. It will better posture us to deter aggression against the United States, or our allies and partners, while also preparing us to prevail in conflict if necessary.
“It will continue to forge a more resilient joint force and a modern defence ecosystem, built for the security challenges of the 21st century. And it will strengthen the unmatched global network of alliances and partnerships that magnifies our power and deepens our security.
“Our budget request reflects targeted reductions to programs delivering key capabilities in later years to support the joint force’s ability to fight and win in the near term.
“We must continue to invest in cutting-edge defence capabilities and to advance new operational concepts across domains, from advanced cyber systems and enhanced space capabilities to a modernised nuclear triad. This budget request also reflects a deep commitment to our people, who will always be the department’s greatest strategic asset; we hope to raise basic pay, boost quality-of-life initiatives, and promote safety and accountability.
“Moreover, this request will enable the department to deepen cooperation with our interagency colleagues, industry, academia, allies, and partners. Through cooperative defence initiatives, multilateral joint exercises, and shared technology development, we will enhance our capabilities and help make America and the world more secure.”
