Anthony Albanese announces $830million settlement with French submarine builder Naval Group

New Prime Minister Anthony Albanese has announced an $830million settlement between the Australian government and the French company whose contract to supply military submarines to our navy was cancelled.

Mr Albanese said the total cost of the cancellation will cost taxpayers $3.4billion but will ‘rule a line under the contracts’ with Naval Group.

‘This is a fair and an equitable settlement which has been reached,’ Mr Albanese said at a press conference in Sydney on Saturday. 

‘It follows discussions that I’ve had with [French] President Macron and I thank him for those discussions and the cordial way in which we are re-establishing a better relationship between Australia and France.

The French Attack-class submarines were intended to replace Australia’s aging Collins class submarines (pictured) before the deal was junked by the Morrison government in September 2021

Mr Albanese claimed the settlement represented ‘a saving’ from the $5.5 billion that it was estimated cancellation of the program would originally cost. 

‘But it still represents an extraordinary waste from a government that was always big on announcement but not good on delivery,’ he said.

The prime minister said the settlement would allow Australia to ‘move forward’ in its relationship with France and revealed President Macron had invited him to visit the country.

He also reaffirmed the Australian government’s commitment to the AUKUS agreement.

‘We support AUKUS and we support the use of nuclear-propelled submarines,’ he said. 

‘That is proceeding in terms of the 18-month review. There’s no change in the government’s policy.’

Ex-Prime Minster Scott Morrison briefly encountered French President Emmanuel Macron at the G20 Summit in November 2021, after the contract for French submarines had been cancelled

The scuppering of the $90billion subs-building program with Naval Group came as Australia announced a new nuclear submarine program in partnership with the USA and UK in September last year.

Then defence minister Peter Dutton said at the time that Naval Group’s Attack-class submarines were ‘no longer suited’ to Australia’s operational needs, and that the Morrison government had been ‘upfront, open and honest’ about the decision to break the contract.

The decision sparked a serious falling out between France and Australia, with President Macron famously saying that then prime minister Scott Morrison had lied to him during an aside to a reporter at the G20 summit in Rome last November. 

Jean-Yves Le Drian, one of France’s most senior politicians, said Mr Morrison’s decision to walk away from the agreement was a clear sign of ‘brutality and cynicism’.

‘I would even be tempted to say of unequovical incompetence,’ he said of Mr Morrison’s actions.