I’m very pleased to be here with Andrew Hastie, our Shadow Minister for Defence.
This is a very significant day for our country. This is a necessary decision that’s been taken by the government and AUKUS is a huge achievement. It’s been five years or four years in the making. It’s been quite a remarkable endeavour across three countries over that period of time.
I want to pay tribute to many people who have been involved in this, firstly to Scott Morrison, who conceived of the idea in 2019 and negotiations started with the United Kingdom and the United States in 2020. To the Prime Minister’s credit, they’ve continued that work, to the credit of Richard Marles and others in the government, they’ve been able to bring to fruition this plan that’s been long in the making and it’s necessary, given the circumstances in the Indo-Pacific, which the Prime Minister and Richard Marles have pointed out, Prime Minister Sunak, President Biden and others.
We live in a very difficult time and we should be very honest with the Australian people about that and that’s necessitated this deal and there will be many other elements to AUKUS that will be announced over the next couple of years, aside from the submarines, as you know, particularly around hypersonics and guided weapons, in space and other investments that will be needed as part of the AUKUS compact.
I want to congratulate a number of people, starting of course with Jonathan Mead. Jonathan Mead worked incredibly hard for this outcome. From day one he was involved, and I had an excellent working relationship with him and I know that Richard does as well.
Also, to Kurt Campbell and to Jake Sullivan on the US side. This deal wouldn’t have been possible without their input at a White House level. Obviously, Lloyd Austin at the Pentagon and Ben Wallace in the United Kingdom. These are all great friends of Australia and of this relationship that is more important than ever.
We have to make sure that there is transparency and honesty with the Australian people about the cost involved in AUKUS. It is not credible for the government to say that there is no net impact, even over the forward estimates. We can’t allow Labor to cannibalise the Defence Force to pay for AUKUS. It is not an either-or option.
Let’s be very clear, when Labor was last in government, they reduced spending by 10 and a half percent in real terms, which brought the spending in defence down to just over one and a half per cent of GDP. Now, we built that up from the day that we were elected to come in at 2 per cent or just over 2 per cent, and that put us in a credible position to do this deal with United States and the United Kingdom. There is no way in the world if you were spending $10 billion a year less in defence, that the United States or the UK would have seen us as credible partners in the construction or the commitment to the delivery of nuclear powered submarines. That’s very clear. And we can’t allow Labor to go back to a circumstance where they’re going to cannibalise Army or Navy or Air Force to pay for this. So, there is an honest conversation that the government has to have.
There is no magic pudding. There’s no way in which you can sugarcoat it. There is extra money that needs to be spent in defence, and the United Kingdom has been honest about this, as you saw with Prime Minister Sunak’s announcement to increase their spending to two and a half percent of GDP. So that is incredibly important and there will be a lot of detail that I think you’ll require from the government in the run up to the May budget, not just the forward estimates, but into the out years as well. I think that is a very important part of this conversation.
There’s obviously a very significant industrial capability that’s built up across the three countries, but importantly in South Australia and Western Australia. That is a continuation again of what we had in place under the original AUKUS negotiations and we’re very happy to support the build up, which, as the Americans described to us, was part of that nuclear stewardship. You needed to develop and to demonstrate the ability to build the submarines, to contribute to the maintenance, to the in-service upgrades and all of that which is continuing.
There is obviously a very significant question mark hanging over the government’s commitment to the East Coast base and the Deputy Prime Minister has been clear about that this morning. I suspect what’s happening here is that they’re delaying an announcement on that until after the New South Wales state election.
I think the Labor Party, frankly at the moment’s talking out of both sides of their mouth in relation to the East Coast base and they might see that as a savings. Why wouldn’t they commit to it when they’ve committed to WA and to South Australia, because that was an important part of the original considerations, and it was also an important part of trying to attract a workforce on the East Coast so that – and this was the clear advice from the Navy at the time, but not, I mean most people want to live in WA, but not everybody wants to live on the West Coast, and the idea of increasing the workforce without a base on the East Coast – from a Navy advice perspective, was difficult. So, it was to augment the workforce in the West and to attract people into being a submariner, which is obviously an incredibly important part of delivering in the AUKUS program.
So, I’ll hand over to Andrew and then happy to take some questions.
Thanks very much Peter. Today’s announcement in San Diego to acquire eight nuclear submarines represents a much welcome forward step in the AUKUS partnership. The partnership which was commenced under the former Morrison Government 18 months ago when Peter was in fact the Minister for Defence. It’s a response to the darkening strategic reality in the Indo-Pacific. Let’s be clear about that, and that is why it’s important that we have a reasonably rapid acquisition of nuclear submarines represented in the Virginia-class.
In September 2021, we took the important step of joining forces with the US and UK to forge the historic pact and that was in response to the strategic challenge which was identified in the 2020 Defence Strategic Update. So, the Opposition is pleased to see the government continue the work that we commenced and the work that we have been calling for for some time.
We welcome the news of increased investment in South Australia and Western Australia, particularly. I think it’s a very exciting time for young Australians in those two states, particularly in Western Australia, which will see billions of dollars invested in HMAS Stirling over the next three years prior to the forward deployments of US and UK nuclear submarines coming alongside at Stirling.
We’re particularly excited about the announcement of 20,000 jobs over the duration of the AUKUS project, but we will be doing our job as the Opposition, in the best traditions of the Westminster system, and we do have questions around the timing, the sequencing and as Peter outlined just earlier, the budgetary costs of the AUKUS project. Particularly we have questions around the sequencing. We want to know what’s going to happen with the Life Of Type Extension to the Collins-class. We want to understand what the $3 billion worth of offsets for defence means for other capabilities – which services will be affected, which capabilities will be affected, what local defence industry businesses will be affected and when will they be told? So, there are many questions to be worked on, but today, and in a spirit of bipartisanship, we welcome the announcement, and we look forward to working with the government to deliver this much needed capability.
You talk about – both you and Mr Hastie – about not cutting elsewhere in defence, but is it not the case that there’s always a fair bit of fat around in defence that there could be some savings found without harming operational capabilities or capacities?
I’m sure there are some savings and the government can detail that. But for example, I mean when we were in government, we put just under $10 billion into the Australian Signals Directorate, now long before there’s any kinetic action in any possible scenario into the future, or naval blockades or whatever it is that people are talking about, you’re likely see cyber attacks and denial of services here, attacks on our infrastructure, all of that is the reality.
So, you need to make sure, for example, that they’re not going to be stripping money out of REDSPICE, which is an incredibly important element of the government’s defences. It’s not just at sea or on land, but it’s in the virtual world and in space that we need to be very careful of our capacities and our capabilities, and again, I think it’s important that if the government’s planning to strip money out of defence, as Andrew points out, what are the programs? What’s the logic behind that? Why is that deprioritised? And what does it mean in terms of the local companies and those defence manufacturers here in Australia that are part of that important supply chain?
You say that we shouldn’t be cutting from defence, so what is the alternative? Where should this money be coming from?
Well again, the government’s got a budget coming up in May, so no doubt they’ll detail some of this. If they can identify savings within the budget, they’ll do that, no doubt. If they’re proposing new taxes, they’ll do that. If they’re proposing further debt, they’ll do that…
Have you got any suggestions?
Well, they’re the government and they’ll no doubt provide all of that detail to you, but I think the most important element here is that we need to achieve the capability given the circumstances that we’re in at the moment. Everybody agrees with that and it’s exactly the reason we started negotiations in AUKUS in the first place, but it needs to be done at the least possible cost in the quickest time possible. That’s what the government will lay out.
At the moment, I just think listening to some of the rhetoric this morning, there’s a bit of a magic pudding episode going on here that somehow the money’s going to appear or that it’s going to be cost neutral. This is not a cost neutral decision, and the government should be very clear to the Australian public about that and appropriately, the money is being spent because the times demand it.
This is the most significant undertaking in our country’s history. We need to be transparent with the Australian public that there is a cost attached to it because we want to preserve peace in our region, and we want to provide stability and security for our country and for our near neighbours and for our region.
Mr Dutton, during your briefings, were your concerns about the UK production line allayed and are you happy with the plan to send Australian workers and Australian investment to the US and to the UK to acquire that capacity?
I’m not going to go into to the briefing that we’ve had other than to say I’m very grateful for the time the Deputy Prime Minister and Mr Conroy were able to spend with us. One of the very early decisions we made in AUKUS was to send Australian personnel across to the UK and the US to enroll in their programs and there are some people who are a fair way through, I think, part of that course already.
The United States has a higher degree of education or requirements, particularly for those that are going to be in charge of the boats and so that’s going to be a long lead time, so of course I support as much training as can take place. I remember saying to you a few months ago that one of my concerns in AUKUS was not about the acquisition of the submarines, it was about the crewing and whatever we can do to bring crew from the US and the UK to Australia, whatever we can do to jointly crew and as you know, in different operations over a long period of time, our people have been on both the US and the UK boats, but not in a position where they’ve been allowed to look at the nuclear technology. So, there’s a zero base in some regards here and that’ll be built up and as I say, Jonathan Mead’s as good as they come, so I’m sure he’ll be working through all of that. So, I support that very much.
Paul, how can I help to contribute to your very balanced piece this weekend?
Thank you very much. Given your priorities you’ve identified and constraints on the budget, would you be prepared to support a deferral or a cancelling of the $240 billion stage three tax cuts?
Well Paul, the government went to the last election with a commitment for the tax cuts. They knew about AUKUS. AUKUS was something that they received in their lap from the Coalition, and they knew about the expenses in relation to AUKUS. They will have received the advice from Treasury and Finance from day one and they still made a commitment to the tax cuts. So, if they’re going to walk away from the tax cuts then they should be very clear about that, and we will no doubt find that out in the budget.
Just on Dom’s question of what have you heard in the briefing this morning, are your concerns about the UK submarines now allayed? Do you support them going forward?
Well, I certainly support what the government’s got on the table – first point. Second point is that it was always obvious that you needed to acquire the capability quickly.
Now, when the government is talking about the US and the UK having a much greater presence here from now, but really from 2027, that gives you a sense of what they believe is the outlook for the situation in the Indo-Pacific. So, from 2027, this is a very difficult space, and they should be, well they are being honest about that – all three countries are being honest about that – but that is a very significant undertaking by the US, in particular, and the UK as well, and we welcome that because it is a contested region already and it’s obviously, in their judgement, in the judgement of Defence, both here, in the US, in the UK, going to become more difficult over the next three or four years. We’re not talking about decades out. So, the ability to, under AUKUS, bring those assets into our region is very important and I strongly, strongly support that and commend the government for it.
I had very productive discussions with Lloyd Austin at the time about more of their assets and a greater presence in the region because of that near-term capability gap and that’s very important.
I don’t understand what the government’s doing in relation to Collins-class at the moment. I know the Premier of South Australia said one thing on TV this morning, but that’s in conflict with what the Defence Minister said in his briefing today. The first boat comes out of the water, as you know, in 2026 and it’s a two year drumbeat from there. I don’t know whether the government’s got a commitment to the full LOTE program or not. So, there’s just a question mark about whether you can operate three platforms at once, and that’s the next point.
The final point is that I think the support of the UK is integral in this, and it always was. To the full credit of – at the time – Prime Minister Johnson and Ben Wallace, we got into this discussion. Without the UK we wouldn’t be where we are today and the fact that they’re able to increase their industrial capability, almost double the production that Rolls-Royce has. If that can be achieved, that’s a great thing as well. If they’re able to take as much technology from the Virginia-class as possible then that’s a great thing as well, and whether the timelines can be achieved with the first-in-class, well, the government’s given an assurance around that being, I think 2042.
We just want to acquire capability as quickly as we can. It’s fantastic that we’ve got between three and I hope five of the Virginia-class submarines because that will be a very significant part of our own defence and deterrence capability, and it will help build on that. So overall, we’re very supportive.
Just quickly on the question of the Virginias, obviously the government has expressed a level of confidence that no matter what, congressional approval is very likely to be granted because there’s a strong bipartisan tradition. But we are talking about approval that will be given several years from now. Do you share the government’s confidence that that’s a bet that can be safely made?
Yes I do. I want to give this commitment to the Australia people today that come hell or high water, the Coalition will support AUKUS. We were the authors of it. We give full credit to the government for continuing the negotiations and arriving at the outcome today and regardless of the outcome at the next election, if the Coalition is successful or not, AUKUS will continue and it must because the times demand of it and we will provide support to the government when we are in opposition and when we are in government, we expect the support from the Labor Party as well and I believe it’ll be forthcoming.
I’ve worked with the Obama Administration, with the Trump Administration and with the Biden Administration, and I can tell you in relation to national security matters, it’s completely seamless. The commitment of the Republicans and the Democrats, the Labor Party and the Coalition has underpinned the Five Eyes relationship and the Alliance between Australia and the United States for decades and it must into the future.
We are a population of 25.8 million people and if we’re trying to project every scenario over the course of the next century, it is impossible to see in any of those difficult scenarios where you can be a sole trader. You need to have that relationship with a trusted partner in the US and the UK, Canada, New Zealand, India, Japan, many others in the region now as well. It’s very important that those relationships continue and so I do share the government’s optimism.
Richard Marles was quite clear this morning that when he took over there was a capability gap in terms of when the Collins would begin going out and the AUKUS submarines would come online. He was suggesting that this option, stopgap solution, if you want to call it, of purchasing three Virginias wasn’t on the table when he took over the job. Is that correct or was that always on the table for you?
I’ve made public commentary about this before and I wrote an op-ed piece, I think last August in relation to it. It’s always been my view that you would need to bring that capability into service, in our waters as quickly as possible and that’s what I was working towards and I’m glad that Richard, as my successor, has been able to deliver on what we were negotiating. But of course we were talking with the Americans about capability and the Virginia-class as the most obvious, developed, mature capability, best in class, and gives us the ability with a 30 year reactor to… along with all the other technology, give the Australian Navy the best chance of defending our country. So, of course we were in discussions with the US in relation to what could be put in place before whatever the acquisition decision was, could be rolled out and the UK were very engaged in our negotiations as well.
I just think the continuity here is the important point. There’s been no departure from the government in relation to the LOTE timetable for the Collins-class. There’s some question, and rightly, I understand the Deputy Prime Minister’s hesitation about do you need the LOTE for all of the boats or not? The South Australian Premier has got a different view. He says he’s got a commitment that they’ll all be subject to an extension of their life, but no doubt that will be clarified. So there is a continuity here and that’s what we welcome.
The Deputy Prime Minister this morning declined to say whether $3 billion of cuts to the defence program were coming from. Have they failed at that first test of transparency? Secondly, was it a mistake last night for you to single out the NDIS as somewhere where the Coalition could help find savings. Don’t those programs deserve to be judged on their merits?
Well of course they do, and I’d just refer you to what I said in my budget reply speech in October. We’re an Opposition prepared to work with the government if they’ve got changes to make.
The NDIS is an incredibly important program. We supported it in opposition, in government and it must continue, but it must be sustainable. The government itself has pointed out difficulties around the sustainability and the cost trajectory and the last thing that you want to do is have an important program like that, which is crucial to provide dignity and support to people with disabilities, that is financially unviable. If they need to pass legislation…I mean I’ve said nothing different than what I said in October of last year.
In aged care I think there are significant investment decisions that the government needs to make to make that policy sustainable and if there’s legislation required to give more dignity to people as they age as well, then we’re willing to support that through the Senate if the government can’t get the support of the Greens.
So, there are sensible debates that we need to have, but there are only three options available to the government here. They can find savings in the budget, they can go into debt, or you know, I mean, what else is available?
On the issue of the disposal of the spent nuclear fuel rods in Australia, was that the understanding of the former government that that Australia would take that waste?
I’ll let the Deputy Prime Minister talk more about that. I think there’s more that we’ve been briefed on that I don’t think is publicly available at the moment…
Were you surprised by that announcement?
Well again, in our country we have to have a sensible, mature debate about nuclear energy and the disposal of it. We dispose of nuclear waste now in our country…
…But not high level?
Well, we dispose of it safely. We’ve got in terms of where we sit on the on the map, we have an incredibly stable environment to store nuclear waste. The Labor Party signed up to AUKUS knowing that they would have to deal with the waste, and now that they’re in government, they know that that’s a part of the deal.
So that was the understanding of the former government?
I’m not going into the detail, other than to say the Americans demanded nuclear stewardship to be first and foremost, and part of that is to develop a domestic industry which the government, to their credit, is doing. That’s what we’d always envisaged under AUKUS and you need to dispose of the waste sensibly and the government will outline that policy and the Coalition won’t be playing politics on that…
So how long ago did you know that Australia will take that waste?
…We will support the government in their decision as part of AUKUS, to deal with the waste in a way that would meet the international standards. The international piece has been underway for a long period of time, negotiation with the UN and other partners in Europe, etc. This government’s continued that work, so I’m not going to stand for some scare campaign in relation to the disposal of nuclear waste. We have an export industry of uranium in this country. Many other countries, including Britain, including the United States, France, Canada, dispose of waste now and have done for decades and decades.
So, I actually think it’s a time where some commentators need to grow up in relation to the issue of nuclear and we will not be playing politics on this issue. We will support the government because it is an integral part of having a nuclear propelled system and there’s no sense pretending that you can own a fleet of nuclear submarines and that you won’t be responsible for the disposal of that waste.
The Australian Academy of Science this morning said Australia is facing a nuclear skills crisis. Do you share these concerns not just with regards to maintaining the submarines, but also capitalising on those technology transfers through the second pillar on maybe the quantum and the space sectors?
Well, I think they’re right to raise the issue and I think we should be doing all we can within our schools to try and identify talent, point them toward a pathway. There’s obviously been a very significant effort over state and commonwealth levels for a number of years in the STEM programs, but we do need more, and as I said before, in many ways we’re off a zero base here.
The United Kingdom’s been operating in this space since the 1950s and before that. So, there is a lot that we can do domestically and organically. There will be a lot of talent that we’ll need to bring in from overseas and the migration pathways and the rest haven’t been part of the discussion yet, but again, it’s a mature discussion that will need to be had.
There will need to be an international workforce that contributes to the success of this program, and that will be a good thing because there will be a transferability of skills, the training that’s taking place on the submarines now and within the US and the UK will quickly build up our skill base and we should be very proud of that.
Just on skills – a question for Mr Hastie; the ADF currently, or at least last year had a personnel shortfall of around 3,000 personnel, particularly when it comes to submariners as well, they often struggle to recruit people into that particular industry. How should Defence look at recruiting people for the project in total, but also particularly to actually man these submarines? How are you supposed to convince people to stay underwater for months at a time?
The first thing I’d say is this is truly a nation building task, and so it’s not just defence where we need to recruit, but also the private sector, industry and of course education and beyond. So, we need to work harder though at recruiting submariners because we are behind in our defence recruiting targets. I think we’ve got to get back to the basics.
I mean I joined the Defence Force in my time because I wanted to serve my country. So sure, you can recruit on the basis of self-actualisation, but in the end, we have a really important task before us, which is AUKUS. We need those submarines crewed. We need people doing it out of a sense of country and duty and they’re the sort of values that I think we need to start using in the public square to recruit our future submariners.
We might just do the last one here. I’ve got to get a flight, I’m sorry.
The government confirmed that they’ve been ringing around the whole region and the broader world to calm any misconceptions or whatever about proliferation, but the Chinese haven’t accepted a briefing, Mr Marles said. Does that worry you or is that within your expectation?
Well Phil, I hope that they do because one thing that our friends know, and frankly, that our adversaries know, is that Australia is not an aggressive, provocative country. We’re a peace loving country and we want peace and stability to prevail in our region. We want a status quo in relation to Taiwan. We want to make sure that our friends in the Philippines or Indonesia or Cambodia or Vietnam or elsewhere aren’t being bullied or aren’t being the subject of intimidation or propaganda.
The Australian public knows that this deal is about making sure that we can keep peace and stability in our region. That’s why there is an absolute bipartisan position that’s been adopted here. The government supported us when they were in opposition and we negotiated AUKUS. We are now supporting them as they take AUKUS to the next stage and there are many decades ahead in the AUKUS deal. I believe very strongly that they will be supported by governments of both persuasions, both here and in the United States. That is in our country’s best interests, it’s in the region’s best interests and frankly, it’s in the best interests of the world.
So, we’re very pleased to be here and very proud to have been a very significant part of AUKUS and we’ll work very closely with the government.