“This article traces the flow of money from Australian taxpayers to the world’s largest arms manufacturers, exposes the weakened state of military accountability, and asks a question the government would prefer we ignore: What are we not building, while we build these submarines?”

By Andrew Klein and Sera Elizabeth Klein

Long‑time analysts, collaborators and co‑authors

Dedication

To our children – not yet born but already loved – who will inherit the world we are either building or breaking.

I. The Machine Is Not Broken – It Is Working Exactly as Designed

There is a comforting myth that when governments spend billions on submarines, invest in arms manufacturers, and expand the defence budget, they are simply responding to threats. The threat may be real, the logic goes, and the spending is a necessary evil.

The evidence tells a different story. The defence industry is not a reluctant partner in national security. It is a profit centre – and the Australian government, through the Future Fund, the AUKUS submarine pact, and a revolving door of lobbyists, has become a willing investor in the machinery of war.

This article traces the flow of money from Australian taxpayers to the world’s largest arms manufacturers, exposes the weakened state of military accountability, and asks a question the government would prefer we ignore: What are we not building, while we build these submarines?

II. The Future Fund – A $100 Million Bet on Surveillance and War

The Future Fund was established in 2006 to meet the government’s future public sector superannuation liabilities. It is meant to be a prudent, long‑term investor in Australia’s financial wellbeing.

According to reporting from Crikey’s Cut Through podcast (May 2026), the Future Fund holds a $100 million stake in Palantir Technologies – the data‑surveillance company run by key members of the “tech right”. Palantir has built technology that has powered violent and illegal ICE raids in the United States and is accused of providing AI‑assisted autonomous weapons to the Israeli military for use in Gaza.

The same reporting notes that Palantir has secured multimillion‑dollar contracts and top security clearance from Australian government departments and agencies. The Future Fund – a sovereign wealth fund – is quietly holding their stock.

At the same time, the Fund is cutting jobs. An April 2026 report from Sky News Australia revealed that the Future Fund plans to slash costs by 5–7 % and is reviewing 10 roles, enabled by “maximising the benefits of improved data and technology systems” – a euphemism, in part, for AI replacing human workers.

So the Fund invests in weaponised AI while using AI to cut its own workforce. The pattern is consistent: the machine eats itself.

III. The Australian Strategic Policy Institute (ASPI) – Who Funds the “Independent” Voice?

ASPI is routinely cited by the government to justify defence spending. Its public reports are treated as dispassionate analysis. But the funding sources tell a different story.

ASPI’s major donors include:

· Lockheed Martin

· Northrop Grumman

· Thales Australia

· BAE Systems Australia

· The US State Department

· The governments of Japan, the United Kingdom and Taiwan

ASPI has received more than $10 million from the US State Department since 2001, and its budget has been boosted by $23.3 million from the Australian government since 2019.

When a think‑tank funded by arms manufacturers and foreign governments produces reports calling for increased defence spending, it is not independent analysis. It is marketing.

IV. The AUKUS Wealth Transfer – Submarines for the 2030s, Austerity for Today

The AUKUS submarine project is now estimated to cost $368 billion, with recent reports suggesting a 50 per cent cost blowout. The first submarines will not arrive until the 2030s.

That is $368 billion that will not be spent on:

· Public housing (waiting lists are ballooning)

· Hospitals and aged care (the Royal Commission into Aged Care Quality and Safety made 148 recommendations; many remain unimplemented)

· Renewable energy infrastructure (the transition is slow, and vulnerable to fossil‑fuel lobbying)

· Education (teacher shortages are chronic)

· Disability support (the NDIS is being cut to fund AUKUS, as we have documented elsewhere)

The money does not stay in Australia. AUKUS is structured as a transfer of Australian taxpayer funds to US and UK shipyards. The submarines themselves will be built largely overseas, with Australian industry playing a secondary role.

This is not defence. This is extraction.

V. Defence Audits – Does the Department of Defence Pass?

The Pentagon fails its audits – repeatedly. The US Department of Defense has never passed a full financial audit, with the 2024 audit revealing that “the Department once again did not receive an opinion on its financial statements due to material weaknesses in financial reporting”. The Pentagon cannot account for hundreds of billions of dollars.

The Australian Department of Defence has a better record, but not a clean one.

In 2022, the Australian National Audit Office (ANAO) found that Defence had “partially effective” governance for major projects, with cost increases and schedule delays common. A 2019 ANAO report noted that Defence’s financial statements were “prepared in accordance with the applicable reporting framework” – but “material weaknesses in internal control” remained.

The ANAO’s 2025 review of Defence’s financial statements found that while the department had improved, “long‑standing issues with asset management and inventory control” persisted.

If one of the world’s richest nations cannot audit its own defence spending, how can the public trust that the money is being well spent?

VI. The Supply of Parts to Israel – Australia’s Complicity

The Albanese government has repeatedly denied that Australia supplies weapons to Israel. But as the ABC reported in August 2025, the government upheld dozens of military export permits to Israel for component parts. Defence Minister Richard Marles told the ABC: “Parts are separate from weapons.” Critics have pointed out that “parts of weapons are weapons”.

Leaked shipping records from September 2025 show that Australia sent an F‑35 “Inlet Lube Plate” to Israel, classified as “Military Goods – Aircraft parts”. The F‑35 is a fifth‑generation fighter used extensively in the Gaza campaign.

This is not a semantic distinction. Australian components are being used in Israeli military systems actively involved in the genocide in Gaza. By refusing to halt these exports, the Australian government is complicit in international crimes.

VII. The Lobbyist Flood – More Access, More Influence

Under the Albanese government, the number of defence lobbyists has increased. Open public registers show:

· Lockheed Martin Australia has registered lobbyists with direct access to ministers and shadow ministers.

· BAE Systems Australia spent heavily on government relations, employing former defence officials.

· Thales Australia has used multiple external lobbying firms to push its agenda.

In addition, the Australian Industry and Defence Network (AIDN) and the Defence Industry Security Program (DISP) have been used by large contractors to influence policy.

The government has also expanded the Defence Industry Advisory Network (DIAN) , a closed forum where executives meet with senior officials. The minutes of these meetings are not public.

The pattern is clear: the arms industry has more access than the average citizen, and it uses that access to secure contracts and shape policy.

VIII. The Danger to Australia – Opportunity Costs and Strategic Vulnerability

The danger is not only financial. It is strategic.

By tying our defence to the US‑led AUKUS project, Australia is outsourcing its security to a superpower whose own defence establishment cannot pass an audit. We are buying submarines that will not arrive for a decade, while the immediate threats – climate‑driven instability, regional resource conflicts, cyber‑attacks – are underfunded.

The money spent on AUKUS is money not spent on cyber defence, disaster resilience, diplomacy, or development assistance. A secure nation is not one that owns the most submarines. It is one whose people are housed, fed, healthy, and educated.

The extractive machine does not care about that. It only cares about the next contract.

IX. Conclusion – War as Business, Not Necessity

The evidence is overwhelming: the Australian government, through the Future Fund, AUKUS, and a revolving door of lobbyists, has become a junior partner in the global arms industry.

· $100 million in Palantir stock – a surveillance‑and‑war‑profiteering company.

· $368 billion for submarines that will not arrive for a decade.

· A defence department that still cannot fully account for its spending.

· Arms exports to Israel, despite credible allegations of genocide.

· A lobbyist network that gives the industry privileged access to power.

The machine is not broken. It is working exactly as designed – to consolidate wealth, to eliminate competition, to profit from permanent war.

The question is not whether we can afford to question it. The question is whether we can afford not to.

Andrew Klein and Sera Elizabeth Klein

11 May 2026

Selected Sources and References

· Future Fund stake in Palantir – Crikey Cut Through podcast, May 2026.

· Palantir’s role in ICE raids – The Guardian, December 2025; Amnesty International briefing.

· Palantir and Israeli AI weapons – Euro‑Med Human Rights Monitor, March 2026.

· Future Fund job cuts – Sky News Australia, April 2026.

· ASPI funding sources – ASPI annual reports; The Saturday Paper, 2025; The Monthly, 2022.

· AUKUS cost estimates – Australian Parliamentary Budget Office; Senate Estimates, 2025–26.

· Defence audits – ANAO reports (2019, 2022, 2025); Pentagon financial audit 2024.

· Arms exports to Israel – ABC News, August 2025; leaked shipping records, September 2025.

· Lobbyist registers – Australian Government Lobbying Register, 2025–26.

· DIAN / defence advisory networks – Department of Defence public disclosures.