11 July 2022
SUBJECTS: Australia-U.S. alliance; Solomon Islands security agreement with China; Engagement in the Indo-Pacific; AUKUS agreement; Taiwan.
CHARLES EDEL, HOST: Thank you so much for that talk, for that robust defence of alliances in general, and to the American-Australian alliance in particular. We have a lot of territory to cover. I’m watching the time and I know that there are a lot of people online who also have questions so we’ll see how many we can get through between defence posture, AUKUS, Quad, the Pacific.
You’ve been travelling a lot lately. You were in India recently and while you were there you said, and I’m going to read off this to make sure I’ve got it right, that it was “your primary responsibility to ensure Australia has the capability necessary to defend itself in the toughest strategic environment we’ve encountered in over 70 years”. Now, as you just laid out in the speech, you’re conducting one, if not two, reviews simultaneously by your government – the Defence Posture Review and the Force Structure Review. I’m hoping that you can give all of us a little bit of insight into why those reviews are needed and what timeline they’re going to deliver the results on.
DEPUTY PRIME MINISTER: Well, thanks for that question. I suppose the starting point is to reiterate what I said in those comments – that we really do face the most complex set of strategic circumstances that we have seen since the end of the Second World War. And, you know, it bears some analysis. That’s a big thing to say, and it kind of rolls off the tongue pretty easily. I mean, since the Second World War we’ve gone through the Cold War, and whilst this moment may not be as existentially fraught as then, the choices for Australia during that period were simple. We fought in Vietnam with America and, you know, we’re not engaged in a conflict of that kind right now, with that loss of life and casualties. But again, from a strategic point of view it was a question of being with America, or not, and we were with America.
But right now, given the way that China is seeking to shape the world around it in a way that we’ve not seen before, we are presented with challenges from our largest trading partner, which make the path forward far from obvious. And, you know, we’re also experiencing considerable strategic competition from China in our nearest neighbourhood. So, all of that really is asking of us questions about where we’re at and what we need to do that we really haven’t seen for a long time. Two years ago – to the credit of the former government – they undertook the Defence Strategic Update, which observed, pretty significantly, for the first time that Australia was within a 10-year threat window. So, to explain that, there had always been an assumption in strategic planning in Australia that we would be given 10 years’ notice if anybody wished to do us any harm. For the first time, in 2020, it was observed that we are within that 10-year window. That’s a really big thing to say. Having made that observation, what next? What are we actually going to do about it? And to us that’s the question which has been left unresolved by the former government and, in a sense, is the question that faces us as a new incoming government.
So the first point to make is that the Force Posture Review, which will really be more than that, it will be a Force Structure Review, but really kind of an answer to the question of what do we do given the very significant observations that we have made is I think a really critical piece of work. A piece of work we probably haven’t seen done in an Australian context since Paul Dibb did his review back in 1987. It’s of that order of magnitude that we are really looking for this review being undertaken. Not granular; it’s not a white paper, but a high-level assessment of what we need to be doing. And the time frame for that is that we really want an answer from that review in the early part of next year. And to do that then will in tandem with the other big piece of work that we’re doing at the moment, which is the work through AUKUS, with the UK and the US, about determining what is the optimal pathway, is the way I’ve describing it, what is the nuclear-powered submarine we will run with, and how do we get from where we’re at now in 2022 to that moment. And, again, we’re looking for an answer to that in the first part of next year.
Both those pieces of work, I think, are seminal and foundational for this government in terms of answering the question about the complexity of the strategic circumstances that we face and really giving us the direction about how we take that nation forward.
EDEL: Thank you. You know, one of the things that’s easily observable in the region is the fact that there has been a multidecade arms race underway but only one country has really been pouring their efforts into that. So, I guess you spoke to this in your speech about Australia having an intent to acquire new types of capabilities. I’m hoping in broad stroke you might tell us not only what some of those capabilities are but to what effect they will be put.
DEPUTY PRIME MINISTER: Greater projection, greater lethality, greater ability to engage in area denial. I mean, that’s probably at its highest level what we see. Now, in the specifics of that, obviously a long-range capable submarine is the single most important platform that we can have. Collins, which is the existing submarine platform that Australia operates, as a conventional long-range submarine has done a fantastic job and continues to do a fantastic job. But it was originally imagined that it would end its service in the middle of this decade. And so the very first thing that we’re thinking about is the successor to the Collins, and that’s obviously what AUKUS is about, and if we want a long-range capable submarine, then it needs to be nuclear-powered. But we’re also looking at greater missile capability and looking at new technologies – hypersonics, cyber and, as I said, area denial capabilities.
EDEL: So, my words, not yours: turning China’s anti-access area denial on its head and making it a much more tough environment for them to operate in and having to operate further off?
DEPUTY PRIME MINISTER: Well, we see this evolution in Australia’s military, we see this modernisation of our capability, as obviously fundament to our own national security but as a prudent response to the changing landscape around us. I mean, China is engaging in the biggest military build-up that we’ve seen since the end of the Second World War. It is massive. It is completely changing the strategic circumstances of the Indo-Pacific and, I think beyond that, the world. We completely accept the right of any country to modernise its military. And China has that right as well. But a build-up of that scale needs to happen in a way that is transparent. And what we’re seeing with China now is opaque. And it has to be accompanied by a reassuring state craft which gives neighbours a sense of confidence about what’s happening. Now we seek to do that in terms of what we are engaging in. We want to be transparent about what we’re doing, and we want to provide that sense of reassurance to the neighbours around us in the Pacific and Southeast Asia. But the circumstances at this moment demand that we take these steps.
EDEL: Switching to the alliance for a second, the Australia-America alliance. President Biden released the declassified version, at least to us out here on the outside, of the US’s Global Posture Review. And it called for, and I’m going to quote again, “seeking greater regional access for military partnership activities in the Indo-Pacific region and new US rotational aircraft deployments and logistics cooperation with Australia”. Now, overnight we’ve seen news that B2 stealth bombers flew from Missouri to Australia – a very long flight indeed – in support of enhanced cooperation under the Force Posture Agreement between Australia and the US. Can you discuss the logic between that increasing cooperation, and maybe preview for everyone here about whether or not we should expect to see more actions in this vein?
DEPUTY PRIME MINISTER: Firstly, I mean, obviously we really welcome these developments. And we think that, as I said in my remarks, that the strategic location of Australia and our geography, our space, and the opportunity to engage in a whole range of activities is a real opportunity for cooperation between Australia and America and is actually a really big opportunity for the US. I mean obviously I answer this question from an Australian perspective. Our interests lie in retaining an American engagement in the East Asian time zone, in the Indo-Pacific. We want to see more of the US. And that’s very much been, I think, really a bipartisan view in Australia. It’s obviously, though, been very much a Labor view in Australia. Under Prime Minister Gillard it was really that which underpinned the decision to establish with President Obama the Marine Rotation in Darwin to begin with.
But we want an ongoing American engagement in the Pacific. And so, from our point of view the logic of this is simple: the more that we are doing to engage the US, the more that we can encourage the US to be there, the better. And I think these force posture initiatives are part of it, a really key part of it. I think part of it also needs to be Australia stepping up and being a more active partner in the alliance. In terms of what we do with the commitment to our own defence, I talked about that in my remarks, that we need to take more responsibility for our own defence. But also, so that we share the burden of strategic thought. You know, we feel that particularly in areas like the Pacific there’s a real role for Australia to provide strategic thought to the United States about how it can best engage in that area. So, to me, sharing the burden of strategic thought along with these force posture initiatives help from an Australian point of view in keeping America engaged.
EDEL: Well, staying right on the strategic geography of the Pacific, I’d like to talk a little bit not only about the Pacific but the Solomon Islands. So, in April in the midst of your election campaign, we had news that China and the Solomon Islands had signed a security agreement. And we had news about this, I say, because the Solomon Islands did not announce this but it was later confirmed by their Foreign Minister.
I’m hoping, especially for an American audience here, you can walk through some of your thinking about what that security agreement might mean for Australian interests, for American-Australian engagement, and for the future of what looks like, as you said, increasing security competition between China, Australia and the United States in the Pacific?
DEPUTY PRIME MINISTER: So, let’s start with the last bit. We’ve seen – I think there’s been a Chinese presence in the Pacific for a long time, and that’s fine. We’ve seen strategic competition from China in the Pacific for a long time. But this agreement really represents a much bigger step in terms of Chinese presence in the Pacific. And I think that’s the way to really understand its meaning and its significance. It does not make inevitable a Chinese base in the Pacific, and it’s important to make that observation. And in that breath, it’s important to acknowledge that both China and Solomon Islands have made it clear that the Solomons won’t be hosting a Chinese base, and we welcome those comments from both Solomon Islands and from China. But it is an agreement of a different character to what we have seen before. And I suppose we can make the observation that were there to be a Chinese base in the Pacific that would obviously completely change the national security landscape for Australia and, I might say, for the Pacific.
Where I go from there is to then really think about what are the lessons to be learnt for Australia, for the United States, for the Pacific in all this. Firstly, you know, we need to – we, Australia, need to remind ourselves the Pacific matters. Like, it deeply matters. And we cannot take our engagement in the Pacific for granted. We don’t have some exclusive right to their friendship. The Pacific, quite evidently, and the countries within it, can choose to have whatever relations they want to with any other country. And that is legitimate. If we want to be the natural partner of choice, we need to earn a right to be that. And that means we have to put in the effort. It is fair to observe that in many ways that ball had been dropped over the last decade. Certainly, from the new government’s point of view we are completely focused on rebuilding our relationship with Pacific Island countries and our standing in the Pacific. You don’t get a better example of that than Penny Wong, our Foreign Minister, who was literally sworn into the job on Monday, and she was in Fiji on Thursday. And she’s since been, repeatedly, to very many of the countries in the Pacific, which is just, I’ve got to say from somebody who’s had a long-term interest in the Pacific and a passion for it, it is wonderful for me to see an Australian Foreign Minister who is engaged in that way with the Pacific.
But I think we’ve also got a role, and as I was saying before, in working with the US, leading really, in the way in which the United States can engage in the Pacific – and not just the US, countries like Japan, like New Zealand – to help support the Pacific. This is really then the final point. We’ve got to be there for the Pacific. The Pacific’s got to know that even if other countries didn’t exist, we would still be there for them and that our focus is on their development. This is one of the least developed parts of the world. It’s where development is going the slowest. On the current rate this will be the least developed part of the world within a decade, unless we do something to change that. And that’s really got to be our call to action, we – Australia – and we – Australia and the US – in terms of working with the Pacific to try and deal with that. And I really genuinely believe that if we do focus on those challenges and deal with those challenges then the rest will take care of itself, and we will be the natural partner of choice for the countries of the Pacific.
EDEL: Thank you. I’ll ask one more question and then I’d like to turn it over to our audience. So, tee up your questions, please. There’s a microphone over here you can queue behind us. B0ut before we move on, because you did spend so much of your talk discussing AUKUS, I really am curious to hear how AUKUS itself fits into that larger deterrence picture. And perhaps more pressing for those of us in the room who track this so carefully, what are some of the challenges to making sure that it’s implemented as quickly and robustly as possible?
DEPUTY PRIME MINISTER: Well –
EDEL: Sorry, we only have 10 minutes for you to answer that.
DEPUTY PRIME MINISTER: Lots of challenges. I mean firstly – and I said this in the remarks – we’re incredibly grateful for really the confidence that we feel has been shown in us by both the United States and the United Kingdom through entering this agreement. And we need to repay that confidence with a very serious sense about our commitment to nuclear stewardship and everything that that entails. It is a big deal.
In terms of challenges, we really have seen a situation where I guess, to put it sort of politely, repeated false starts over the last 10 years in respect of what will be the successor submarine capability to Collins has really put us behind the 8-ball, and now we find ourselves, really, facing a significant potential capability gap. So, I think that’s challenge number one – how do we get the new capability as soon as possible to minimise any capability gap, and then what are we going to do to plug whatever gap exists.
Secondly, to move to operating a nuclear-powered submarine fleet is – well, it’s as big a national challenge not just in Defence but in terms of really the whole breadth of government that our country has been presented with. And almost at every level; not just in terms of developing the capability but building the industrial base, building the regulation, building the government structures around it. I mean, it will be a huge national project to pull this off and, you know, that is very significant.
And I guess the final point – it’s the highlights of the challenges, there are a lot more than these – is obviously cost. None of this is going to come cheaply. And so, we’re going to need to work out how we build this in to a budget which, after Covid, has a significant debt associated with it.
So, at every level there are challenges. That said, we need to meet those challenges. This is a huge national challenge for the country, but it’s one we’re going to meet and succeed in.
EDEL: Thank you. So, footing the bill, making sure there’s the necessary infrastructure in Australia to run this, and making sure that our system in the US and together with yours moves faster than it has been moving – 'cause I’ll be less diplomatic than you.
At this point I’m going to turn it over to questions. I’m going to ask you to identify yourself. Josh Rogin from the Washington Post, please identify yourself.
QUESTIONER: Hello, Josh Rogin from Washington Post. Thank you so much for your time today. In your remarks you seem to be talking about Taiwan – but you didn’t say the word Taiwan, but you talked about bolstering deterrence in light of Ukraine so that aggressive countries don’t seek to try to attack smaller democracies. Would, under your government, Australia join the United States in a scenario where we were defending Taiwan? And do you plan to engage Taiwan as part of your efforts to engage the region?
DEPUTY PRIME MINISTER: Well, a lot of these are things you would expect me to say, but it’s important to say them in answer to this question. We do not support Taiwanese independence. We have a One China policy. That has been bipartisan and has been in place since we recognised the PRC in the early 70s under the Whitlam Government. None of that changes. We want to ensure that there are no changes to the status quo in respect of Taiwan from either side of the Taiwan Straits. It’s very important that there isn’t a change to the status quo. And in that sense, it’s important that the global rules-based order as it exists everywhere but as it specifically exists in that part of the world is hugely important to be upheld and maintained. And that’s ultimately where Australia’s interest lies. You know, our interest lies in the maintenance of the global rules-based order in the Indo-Pacific, in the East Asian time zone, in the South China Sea. And in respect of the last, it’s worth observing that most of Australia’s trade traverses the South China Sea. It’s not an esoteric issue for us. This goes to the core of our economic engagement with the world. And while it’s true that a fair amount of that trade goes to China itself, all of our trade to Japan and Korea – two of our top five trading partners – goes through that body of water.
Now, we’re not about to engage in hypotheticals about what happens if, but, you know, our posture is very much about robustly defending the global rules-based order everywhere. And that’s ultimately why we see Ukraine as, albeit a long way from Australia, as engaging issues which are significant to our national interest. But obviously maintaining the global rules-based order in the Indo-Pacific as well, and that will be our focus, and our position in respect of Taiwan is really consistent and unchanged.
QUESTIONER: Bridi Rice CEO of the Development Intelligence Lab in Canberra, also a Fulbright visitor here at CSIS. My question is on US-Australian cooperation, in particular in the Pacific Islands, and picking up on what you were saying about how critical it is that Australia and the US meet the Pacific Island leaders where they are at on their security threats – things like climate change, things like underdevelopment as well. It can’t help but strike me that the US-Australian alliance is very mature on lots of fronts be it development cooperation, intelligence exchange, and those organic people linkages. But when it comes to that development bucket of security issues, we perhaps have a little less interoperability. We see less joint programming, we see less people exchange. With the US moving in to the Pacific Islands and the opportunity and allyship that the defence sector has shown to development fraternity with the US, I guess I was wondering what scope you see for increasing the development interoperability between these two countries, and if this is a part of the alliance that perhaps over time you see could be deepened?
DEPUTY PRIME MINISTER: Great question. And completely agree with the tenor of the question that you’ve asked. I think you’re right – I think this is an area that’s been underdone within the alliance. And it’s an area where there’s not the same kind of deep, organic interoperability as there is in other areas, such as defence. And, therefore, to be glass half full, there’s huge opportunity to develop this and do more. And I really think that it is for Australia to lead here. And in my experience in dealing with the United States there is an ask of us to lead – to give the US a sense of where they could help and what they could do. And there’s lots. You know, there really is lots. I think sometimes the US doesn’t appreciate the extent to which it has its own Pacific constituency. It is its own Pacific country, if I can put it that way. By which I mean, in American Samoa, in [inaudible], in Guam, but in Hawaii, you’ve got a deep Pacific constituency within the American system, and there are so many opportunities just in analysing and thinking deeply about that where we can get really good US engagement.
One thing when we were last in government that we worked with the United States on was around really just leveraging its Coast Guard presence in the Pacific. And it’s a practical story which is worth telling which gives an example of how we can do so much more when you start walking down this path. The US Coast Guard in – I think they’re cutters but they’re like, frigates, like, they are big boats – based in Hawaii do a triangle where they go Hawaii, American Samoa, Guam, Hawaii. In the process of that they traverse a whole lot of exclusive economic zones. What we worked with the United States on was putting on board a ship rider from the countries whose exclusive economic zones were being traversed when that normal activity was happening. So, no extra US activity was being undertaken, just the normal trips that were being done, but the simple step of putting a ship rider from each of those countries immediately transformed that frigate into a vessel which was able to deal with illegal fishing. And those vessels had helicopters on the back which gave them sight. It dramatically increased the ability of those countries to police their own exclusive economic zones, and it was the simplest thing in the world to do.
And all it involved was really just – it was the idea. You know, an audit of presence and thinking about how you can leverage that to help these countries. And the exclusive economic zones of these countries is the single biggest economic asset that they have. And it said so much, because what it was in that moment was the United States being there to protect that economic asset for those countries where others are out there pillaging it. And the contrast about what that – in relationship terms – that it represented compared to others was huge.
There’s a lot of grey vessels that also traverse the Pacific. You know, I wonder whether we could do stuff there. But there’s a whole lot of other presence in different areas that the United States has, and not just the US. France, obviously. France go back and forth amongst their territories, and they traverse other exclusive economic zones when they do it. Japan has a presence here. Obviously, we do. New Zealand. You know, I kind of think we sit down, we audit what we do, and we look at ways in which we can leverage that activity to help the countries of the Pacific. You know, wow.
But to your point, we haven’t really done that. And that’s before you even start throwing in new resource and look at ways in which we can do new things in there. I think, yes, it is underdone. But glass half full, it is so exciting when you think about what we could do to help, and that’s really what we have to, you know, pursue now.
EDEL: I’m going to be really – I’m going to press upon you because I know the time is drawing to an end and you don’t even look like your tired and I’m not sure how you’re doing that, but I want to leave every satisfied customer here.
DEPUTY PRIME MINISTER: Sure.
EDEL: So, we have two more questions and I’m going to kind of bundle them. Patrick and Anne-Marie, if you could ask concise questions and then you can choose your own adventure in terms of answers.
DEPUTY PRIME MINISTER: Okay.
QUESTIONER: Patrick Cronin, Hudson Institute. Deputy Prime Minister thank you so much for all of what you’re doing in your remarks today. How can Australia safeguard against strategic malign influence, especially as you expand R&D and helping retain that open, innovative culture and education system while you’re also protecting security? Thank you.
QUESTIONER: Kia Ora Richard. It’s Anne-Marie Brady from the University of Canterbury in Christchurch, New Zealand. I wanted to make a comment and a question. So, you said that the Chinese have been present in the Pacific for a very long time. That is correct. But we’re talking about the CCP. So, I would urge everybody in this room to please very clearly distinguish between the Chinese people in our own countries and in mainland China as well as the CCP government and the People’s Republic of China.
So, the question that I have – built on what Patrick was saying, actually – it’s my observation that certainly Australia and New Zealand didn’t drop the ball in the Pacific. In fact, both our countries have reflected in recent years and have upgraded our policies on the Pacific significantly. And we’re always there. But I think the problem that is really acute is elite capture, and the Solomons has an extremely bad case of it. And it’s actually unfair to completely blame the CCP for that, Taiwan was also involved in that.
So, my question for you is what is Australia and your greatest partner in the world, the US, going to do about elite capture in the Pacific? Thank you.
DEPUTY PRIME MINISTER: Well, both really good questions, to which I don’t obviously have all the answers. To go to the first, yeah, I mean, it’s a dilemma. That’s probably the only way to honestly answer the question. You know, we need to be an innovative, open economy and not just within an innovative, open university research sector. International collaboration – you speak to any scientist and they will talk about the fact that international collaboration is at the heart of doing good science. And looking inward is a guarantee that we will not maintain pace with the world. At the same time, foreign interference is a genuine threat. And we’ve got to somehow address it. And I think it’s taken us a lot to come to terms with that.
I don’t have an easy answer to the question, other than to say that if that dilemma highlights anything for me it is how important is the collaboration that we do with a country like the United States - and not just the US but, you know, the scientific relationship between our two countries is deep. I mean, it’s a huge part of the alliance. NASA has been in Australia for 60-plus years now. NASA is a not insignificant employer in Canberra, actually, with the Tidbinbilla Deep Space Network Centre. And so, I guess it just speaks to the fact that – that doesn’t answer the question, or it doesn’t answer the dilemma, but it does say there’s probably never been a more important time to engaging with the US in terms of science innovation.
In respect of the Pacific, I think you’re right that Australia has presence. I think New Zealand has presence and intent in a way that we’ve not always had. And I do think in the last decade we have dropped the ball in terms of our intent in the Pacific – I mean our, Australian’s intent. We need to be robust supporters of democratic institutions in the Pacific. I mean, the Pacific has got its issues, but it fundamentally is a democratic place. And what you describe comes at a cost to people in those countries themselves and it’s important that we are making that clear as well. You know, put it this way: when we have been engaged – when I personally had the experience of being engaged – to promote democratic institutions within the Pacific, that has always been really well received and really well supported at a public level within the Pacific. So, there is ground on which we can engage in this sense where we can make good headway. And I think it’s really important that we not throw our hands up around the question of elite capture and say that means there’s nothing for us to do. That’s not right. Actually, being there and promoting democratic institutions is obviously the right thing to do. But it is a well supported and popular thing to do within the Pacific. It is a part of the world where freedom of speech is deeply cultural, and which is fundamentally democratic.
EDEL: Well, thank you. And thank you for staying on and letting us kind of push you beyond the hour or so. I hope everyone here can please join me in thanking the Deputy Prime Minister for his comments.
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