Federal Budget 2024: Albo’s olive branch to France after the Australian government backed out of a billion-dollar submarine deal

The Australian government has extended an olive branch worth $21 million to France after abandoning a major submarine deal with the country in favor of signing the AUKUS deal.

Treasurer Jim Chalmers unveiled plans at Tuesday night’s federal budget for a new ‘Australia-France roadmap’ to create a defense and security pact in the Indo-Pacific region.

The $20.7 million spending commitment comes three years after Australia sensationally pulled out of a $90 billion submarine deal with France.

Scott Morrison turned his back on France and signed the AUKUS deal with Britain and the US, which will deliver eight nuclear-powered submarines by 2050 at a cost of $368 billion.

But Australia’s relations with France have clearly thawed under Anthony Albanese (left, next to French President Emmanuel Macron), with the two countries now committed to working together in the Indo-Pacific.

French President Emmanuel Macron accused Morrison of lying to him, while then French Foreign Minister Jean-Yves Le Drian likened it to “a stab in the back.”

The Australian government ultimately agreed to pay French shipbuilder Naval Group $835 million in compensation for pulling out of the deal.

But Australia’s relations with France have clearly thawed under Anthony Albanese’s Labor government, with the two countries now committed to working together in the Indo-Pacific.

“The roadmap sets a new agenda for bilateral cooperation in defense and security, resilience and climate action, and education and culture,” Tuesday’s budget documents said.

Although the word China is not mentioned, it is clear that the new road map is intended to further counter the communist country’s influence in the region.

It will create a new Australia-France Center of Excellence in the Indo-Pacific, including a dedicated program of study to “support academic and professional engagement in security and defense trends to shape policy-making to respond to the needs of the Indo -Pacific’.

The $20.7 million Indo-Specific spending commitment will see both countries working together on defense and security in the region. Pictured: Anthony Albanese (left) greets French President Emmanuel Macron ahead of their bilateral meeting during the 2023 G20 Leaders Summit

The roadmap will also promote cooperation on climate action in the region, including the establishment of an annual Hawke-Rocard Medal for outstanding achievements in protecting the Antarctic environment.

It will cost $20.7 million over the next five years, and $3.9 million per year thereafter.

It was officially unveiled in December 2023 during an official visit to Australia by France’s Minister for Europe and Foreign Affairs, Catherine Colonna.

“Australia and France firmly oppose any coercive or destabilizing actions in the South China Sea, including the militarization of disputed features,” a Department of Foreign Affairs and Trade press release said at the time.

It comes as the Australian government has invested a further $206.5 million over four years to strengthen Australia’s presence in the Pacific island states.