OPINION | The cost of AUKUS on Afterpay: putting the economic case for building nuclear submarines in Australia to the test

But is the Briggs proposal, involving building the French boats in Adelaide, the way forward? The current AUKUS plan was never subjected to economic analysis. We should examine, belatedly, the economic case for building nuclear submarines in Australia.

It should pass four economic tests. First, comparative advantage: countries should do the things that they are best at. Second, opportunity cost: we’ll have to make hard choices between guns and butter – and between types of defence expenditure.

Third, diversification: don’t put all your eggs in one basket. Fourth, optionality: the need to remain flexible and responsive in the face of changing circumstances.