The AUKUS pact is a keystone initiative for Australia to strengthen strategic and defence partnerships with the United States (US) and the United Kingdom (UK). AUKUS initiatives were organised into two ‘pillars’: Australia’s acquisition of conventionally-armed, nuclear-powered submarines through trilateral collaboration with the US and UK; and the development of advanced capabilities through integration of the three countries’ defence industrial bases. 

This report provides an industry perspective on AUKUS Pillar 2. It finds that despite high level political support, AUKUS Pillar 2 faces implementation challenges. While stakeholders recognise the initiative's strategic importance and progress in relation to policy settings, uncertainty persists about its overall objectives and industry engagement pathways. Industry feedback consistently raised issues around capability delivery initiatives and designated AUKUS Pillar 2 funding. 

Recommendations

1. The Australian Government should publicly release a strategy that sets out the purpose of AUKUS Pillar 2, activities and projects, funding arrangements, milestones and measures for success.
2. Shift from a policy development to capability execution focus through capability development and acquisition pathways.
3. Establish dedicated, fast-tracked AUKUS Pillar 2 funding streams.
4. Widen policy reform to address the broader enabling environment.
5. Strengthen intergovernmental delivery coordination and structured industry engagement.