As the USS Vermont undergoes a landmark overhaul in WA, the prime minister faced questions over Austal’s future ownership and the broader industrial readiness needed for Aukus.
Prime Minister Anthony Albanese has played down suggestions he was lobbied over Austal’s ownership during his Perth visit, saying a brief greeting with chief executive Paddy Gregg did not amount to a conversation about a stalled Foreign Investment Review Board decision.
Mr Gregg told attendees at a Business News event on Tuesday that he planned to be “a little mischievous” in raising concerns about Hanwha’s bid to lift its stake in the shipbuilder overnight, but the PM said that did not occur.
“I might have said ‘hello’, but there was no in-depth conversation,” the prime minister said.
When pressed on reasons for the stalled Austal verdict, Mr Albanese backed FIRB’s right to manage the ownership decision without political intervention.
“It’s an independent body,” he said.
“We have a range of processes in place that are independent from party politics … one of those is the Foreign Investment Review Board process, and it’s important that it takes place.”
Mr Gregg told reporters on Wednesday that he was satisfied Treasurer Jim Chalmers had now acknowledged the stakeholder frustration publicly.
“I’m happy that it’s been put to him, and he’s committed to giving us an answer soon.”
The FIRB decision, originally due in September, relates to South Korean conglomerate Hanwha’s bid to increase its Austal ownership from 9.9 per cent to 19.9 per cent.
The shipbuilder has repeatedly stated it does not believe the transaction will proceed, citing sovereignty concerns and the strategic significance of its work under Aukus and the newly finalised strategic shipbuilding agreement.
Those delays have added to industry anxiety in Western Australia, where Austal and other defence contractors argue they need clarity to scale up ahead of major Aukus activity.
Mr Gregg has also warned that slow progress on establishing the Henderson Defence Precinct risks South Australia “eating our lunch” if timelines slip.
Against that backdrop, Mr Albanese used his visit to HMAS Stirling to highlight the scale of the $8 billion defence build-out under way on Garden Island.
The visit coincides with what defence officials describe as the most demanding maintenance task ever undertaken on a US nuclear-powered submarine outside American territory.
The work is designed to replicate the level of activity expected from 2027, when Submarine Rotational Force – West begins operating from Fleet Base West and up to five US and UK boats rotate through Perth.
USS Vermont, a Virginia-class vessel of the type Australia plans to acquire in the 2030s, is docked for several weeks of intensive maintenance.
Almost every system on board, aside from its propulsion plant, is being serviced by Australian and US personnel.
Mr Albanese said the activity demonstrated the tangible progress of Aukus.
“I not only think that we can do that, I can see that we are doing that,” he said.
“This is happening, this is real and this is of great benefit to Australia.”
The upgrades form part of a broader investment in Garden Island and the surrounding south-coastal defence precinct, which federal ministers say will underpin thousands of jobs in defence.
“If you’re a local supplier, you’re going to get massive benefit from this $8 billion investment in your neighbourhood,” said federal resources minister Madeleine King.
With plenty of work to come, defence officials have rejected claims that Australia is slipping behind schedule on the Aukus build-out.
The Australian Submarine Agency (ASA) points to new training and maintenance facilities taking shape, an expanding cadre of Virginia-class–trained Royal Australian Navy personnel, and increasing industry participation in US submarine programs as signs the timeline remains intact.
“It’s an evolution, not a revolution,” Ms King said when asked about the pace of delivery.
“This will take a bit of time, no doubt about it, but we have to work diligently.”
By 2030, the ASA expects hundreds of Australian submariners and several hundred ASC and other industry workers to be qualified on Virginia-class sustainment, with many based in WA.
The maintenance period is also being used to test Australia’s own nuclear stewardship systems.
Updated naval nuclear safety regulations have established a formal “Stirling designated zone” around Garden Island, defining where low-level radioactive waste generated by visiting submarines can be handled.
Regulators insist fishing, boating and diving are still allowed, though the move has sharpened scrutiny over how nuclear material will be managed within Cockburn Sound.
Ms King, who grew up in Safety Bay, said the government was aware of the community concerns around Rockingham’s development and intended to address them.
“We are well aware of the challenges ahead,” she said.
“But I know the community supports facing those challenges, because it’s in their benefit and in the national interest.”
Community sensitivities are also tied to the scale of the planned foreign military presence.
Up to 1,200 US and UK personnel and their families are expected to be posted to Perth to support SRF-West, living on base or in surrounding suburbs.
Defence Housing Australia plans to build or lease hundreds of new homes across Rockingham and Mandurah to ease pressure on local housing, while councils and service providers prepare for increasing demand on schools, health and transport.
Meanwhile, industry groups view the Garden Island build-out as a catalyst for a broader industrial expansion along Perth’s southern corridor.
Away from defence, the attention quickly shifted to another flashpoint between Canberra and the states.
Standing alongside WA Premier Roger Cook on Wednesday, the prime minister fielded questions about stalled health funding negotiations with the states.
Mr Albanese rejected suggestions he had walked away from a national hospitals deal, insisting discussions would continue in private.
“We don’t conduct negotiations through public press conferences,” he said.
“What we have on the table is an increased amount of funding … we currently have $20 billion on the table.”
He would not commit to finalising an agreement this year, saying only that talks remained ongoing.
“We’ll wait and see. If not, then the funding will roll over.”
State and Territory leaders earlier today held an emergency meeting and called for a special National Cabinet session to break the impasse, after Mr Albanese wrote to them seeking restraint in health spending growth.
Mr Cook urged the Commonwealth to honour the framework agreed in 2023, which would lift the federal share of hospital activity costs to 45 per cent by 2035.
“They’re the ones that signed up to it and so they should honour that,” he said.
“We’ll continue to make sure that we work with the Commonwealth to improve the full range of care opportunities across people’s life journey,” he said.
