Australia will use the exit clause to scrap the attack class submarine deal with France after securing a new alliance with the UK and US called AUKUS that will allow Australia access to top-secret nuclear technology to own and operate nuclear-powered boats.
Breaking the existing contract with France will cost Australian taxpayers a whopping $2.4 billion as the project was already under way.
Read more: Australia disappoints France and China with nuclear option
"Contractual gates were build into the attack class project, necessarily. Those gates were there for a reason. Decisions have to be made before you proceed through those gates, and so, as we were looking towards that next gate, we have decided not to enter through it as part of the attack class program but instead now to pursue this path which gives us a far greater capability to meet the strategic needs", said PM Scott Morrison today.
He refused to accept the $2.4 billion loss as "wasted" as asked in the question, but instead called it "invested".
"We’ve [already] invested $2.4 billion in the attack class program".
The deal does not extend to nuclear weapons, only the propulsion system, which has always been conventional diesel-electric in Australia's submarine classes.
"We will continue to meet all of our nuclear non-proliferation obligations."
"Australia is not seeking to establish nuclear weapons or establish a civil nuclear capability," Mr Morrison said.
Mr Morrison said the "next generation" partnership would help ensure the region's safety.
"Our world is becoming more complex, especially here in our region, the Indo-Pacific," Mr Morrison said.
"This affects us all. The future of the Indo-Pacific will impact all our futures."
