Joint Press Conference, Parliament House, Canberra

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The Hon Anthony Albanese MP

Prime Minister

The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

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3 August 2022

SUBJECTS: Defence Strategic Review; Australian Defence Force; Taiwan; China; Voice to Parliament; Indigenous Australians; cost of living; interest rates

ANTHONY ALBANESE, PRIME MINISTER: Thanks very much, everyone. And I'm pleased also that we're joined today by the Chief of the Defence Force, General Angus Campbell, and the Secretary of the Defence department, Greg Moriarty. Thank you for joining us gentlemen. I'm also pleased to be with my Deputy Prime Minister and Defence Minister, and two gentlemen who are distinguished in their contribution to the defence of this nation and who I will be talking more about in the coming minutes. People would be aware that in my ANZUS 70th anniversary speech before the Parliament, I announced a Defence Force Posture Review. And I elaborated on that in my Lowy Institute speech in the last year and indicated that what we needed to do is what we are announcing today. And I'm pleased to launch the Defence Strategic Review, which will ensure that the Australian Defence Force is well-positioned to meet the nation's security challenges over the next decade and beyond.

This review will prepare Australia to effectively respond to the changing regional and global strategic environment and ensure that Defence's capability and force structure is fit for purpose, affordable, and delivers the greatest return on investment. It is incumbent on us to deliver a frank assessment of our capabilities and pipeline. To take stock of the billions of dollars in defence investment programs, many of which are over-budget and delayed. To ensure holistic consideration of Australia's Defence Force structure and posture, that includes preparedness, strategy, and associated investments.

I have commissioned think this review to ensure that Australia has the necessary capability to defend ourselves in the most complex strategic environment we have encountered as a nation in over 70 years. It's for this reason we have appointed former Minister for Defence and former Foreign Affairs Minister, Professor Stephen Smith, and the former Chief of the Defence Force, Sir Angus Houston, to lead the review. Professor Smith and Sir Angus bring a unique blend of knowledge and experience to their role as independent leads. Their depth of expertise will be invaluable in the informing this review. As independent leads, they will ensure the review’s recommendations are informed by the strategic assessments of the most concerning threats that challenge Australia’s security. I will ask the Deputy Prime Minister to speak, and then Professor Smith and Sir Angus will make comments. We're happy to take questions on these matters before we turn to any other questions that people may have. DPM.

RICHARD MARLES, DEPUTY PRIME MINISTER: Thank you, Prime Minister. The first priority of the Albanese Government is to keep Australians safe. In 1985, the Hawke Government, Defence Minister Kim Beazley, commissioned then Chief of Joint Intelligence, Paul Dibb, to undertake a strategic review which he handed down in March 1986. It was the strategic basis for the 1987 Defence White Paper and every white paper since, including the white paper in 2016. It established a strategic setting for this country for 35 years. And inherent in that was an idea if any country meant to do us harm, we would be given a 10-year warning. In 2020, the Defence Strategic Update observed for the first time we're within that 10-year window. It was a very significant observation. An observation which this Government agrees. But it left a question hanging, which is, given that, what are we going to do? And answering that question is what this review will do. And we couldn't want for two more qualified and eminent Australians to undertake this review in Sir Angus Houston and Professor Stephen Smith. This review will look at questions of force structure, look at questions of capability, it will ask and answer foundational questions about given our strategic circumstances, what is it that we want our Defence Force to do on behalf of our nation in this moment? And given the complexity of the strategic circumstances that we face today, actually this review is much bigger than Dibb. This will be the most significant review that we've seen of our Defence Force in decades. We have asked the reviewers to report in the first part of next year. The timing of that is important. Because it means that this will run concurrently with the exercise that we're currently under taking with the United States and the United Kingdom under the banner of AUKUS around the selection of Australia's future submarines. And given the significance of that platform, it's really important that both bodies of work happen concurrently and are able to cross-pollinate each other. Together, these bodies of work are going to lay the foundations for defence policy for our country for decades to come. And underpinning the mission of both will be making sure that Australians are safer. Thanks.

PROFESSOR STEPHEN SMITH: Well, thank you very much, Prime Minister. And Deputy Prime Minister. Thank you for your kind words. Firstly, I'm very honoured to have been asked by the Government to join with Angus Houston to conduct this review. I am very pleased to be working with Angus again. I have the highest regard for him. But also very pleased to be working into the future on this review in close co-operation with Greg Moriarty, the Secretary of Defence, and Angus Campbell, the CDF, both of whom I have worked with closely before and both of whom I have the highest regard for. This review, I think, is crucial to our future determination of our strategic policy and our strategic capability underpinnings. As the Deputy Prime Minister has indicated, the Strategic Defence Update in 2020 pointed to dramatically changed strategic circumstances and most importantly the removal of the 10-year warning time which was the basis for Australian Defence effectively since the end of World War II but certainly since the Dib Review. We need to look at our force posture, our force structure, and our capability plan through that lens. And that's the task which the Government has given us. And it's a very important task. Since retiring from public life and ceasing up as Foreign Minister and Defence Minister, I spent a good proportion of the time since then at the University of Western Australia looking at our strategic circumstances, both as a member of the Perth US-Asia Centre but also as part of the university's Defence and Strategic Institute. I have looked at our strategic circumstances through the lens of the Indo-Pacific and our alliance relationship with the United States. And a very important part of this review will be looking at how those strategic circumstances in the Indo-Pacific, particularly as they impact upon our northern and western approaches, what those changed strategic circumstances mean for capability, for force posture, and for force structure. Angus, I'm very much looking forward to working with you closely again. We caught up at the Shangri-La Dialogue in Singapore a few weeks ago and had a good conversation about old times and now we're looking forward to having a conversation about the future. Thanks very much.

SIR ANGUS HOUSTON: Prime Minister, Deputy Prime Minister, and Stephen, thank you for those kind words. I did enjoy catching up with you at Shangri-La. It was just like old times, really. I'm absolutely humbled to be asked to do this review with Stephen. I look forward to working with Stephen and with the CDF and Greg Moriarty. Clearly, our circumstances have changed dramatically over the recent past. A land war in Europe, all sorts of issues in north-east Asia, particularly around Taiwan, east China Sea, issues in South-East Asia and issues up on the Himalayan border and northern India. So, there's much happening. We also have disruptive technologies coming into play. It's a fast-changing environment. And it's absolutely imperative that we review the current strategic circumstances which I rate the worst I have ever seen in my career and life time, and what we need to do about it in terms of obviously the force structure, posture, and capability of the Australian Defence Force. So, I look forward to working with Stephen. And it will be a very challenging job. But I think it's something that is absolutely necessary. And I look forward to probably seeing more of you gentlemen than I have in the recent past. Thank you.

JOURNALIST: Prime Minister, Stephen Smith is a good mate of yours. He helped you during the campaign. He was actually the Defence Minister at the time there were budget cuts to defence. Will this review contain some provision for cuts to several programs in order to pay for the nuclear submarines? And how confident are you, given the nuclear submarines are 20 years ago, that is what will be required for Australia at the time?

PRIME MINISTER: I'm very confident that Stephen Smith, along with Angus Houston, are the right people to do this review. That Stephen's experiences both as Defence Minister and also as Foreign Minister, but also what he has done in post-political life, puts him in very good stead. It is true that, and I concede that Stephen is someone who I have a long association with, it's also the case that I have a long association with Angus Houston and indeed have appointed Houston to the Chair of Air Services Australia and gave him the responsibility of bringing together civil and military air services. And that was a difficult task which Angus fulfilled, like every other task he has performed in his whole life. With diligence and with effectiveness. The Government has made it very clear that we will have defence spending maintained at least two per cent of GDP. And I have also indicated as I did in my Lowy Institute speech I expect that to rise in the future, not fall.

JOURNALIST: Members of the military community are very critical of Stephen Smith's appointment today, pointing to cancelled projects during this time, lack of decisions, and described him as one of the worst performing ministers. What do you say to people who are making those criticisms? And will you rule out any changes to defence projects already decided or big ones that are about to be decided like Land 400?

PRIME MINISTER: I'm sure you follow these debates quite well. And as someone who follows these debates, you will know that there is a gap there between what has been promised and what has been delivered. That has occurred on the former Government's watch. What this review is about is having, well, I will say what it's not about. What it isn't about is a review of defence strategy. We agree with the 2020 update. We think that was sound. But we also know that there is a gap there between capability and what has actually been promised in the past. There are significant delays in delivery of what has been promised also. Richard?

DEPUTY PRIME MINISTER: I've got the highest admiration for the defence association but I really ask them and others to lift their eyes. I mean, you think about the strategic circumstances that we face right now, what we have to deal with, and going through a historic assessment of top five, bottom five Defence Ministers, I mean, it's a bit school yard and we need to move beyond that. Obviously, I disagree with the assessment. But the challenges that face us now are profound and this is what the review needs to look at. And the criticism that we've seen this morning comes without a single piece of work done by the review so far. So, it's evidently not fair. The Prime Minister has made clear our commitment to defence spending. We have committed to the funding envelope of the integrated investment plan. But we're going to apply a critical eye to it. That is the point. It's to ensure the 10-year schedule of procurements is fit for purpose given the significance of this moment.

JOURNALIST: Beijing has described Nancy Pelosi's visit to Taiwan as playing with fire and is threatening targeted military operations. How concerned are you about that response and how significant is this review in the context of a more belligerent China in our region?

PRIME MINISTER: Well, the context in which this review takes place is well-known. We live in an era where there's strategic competition and increased tension in our region. And where China has taken a more aggressive posture in the region. But our position on Taiwan is clear. We don't want to see any unilateral change to the status quo. And we'll continue to work with partners to promote peace and stability across the Taiwan Strait.

JOURNALIST: You criticised the former Prime Minister for, you know, dozens of reviews. Here we have another defence review just two years after the Defence Strategic Update. Do we need to stop the reviews and start making decisions? And if I can ask Minister Marles, would there be any problems off-limits for cuts under this review, such as the Hunter class?

PRIME MINISTER: We'll do what we said we would do. We said in the ANZUS speech we would do this. I backed that up in the Lowy Institute speech. We foreshadowed this. And this is necessary because we know there has been that significant gap between what governments have announced and what has actually been delivered. Richard?

DEPUTY PRIME MINISTER: The Defence Strategy Update was that in 2020. It was a strategic update. It was an assessment of the strategic circumstances we face. It made very profound observations. But it did leave questions hanging in the air about what we'll do about it. We are in the 10-year window. If you don't take the next step and say it will occasion this change of behaviour, it doesn't mean much. It's really the question what we're now going to do, which is what this review will look at. It is really important that it does that. We will apply a critical eye to the integrated investment plan. We have said that. I mean, the major programs which are under way are not about to change. The Hunter class is going to happen. But we're going to look at the integrated investment plan over the course of the next 10 years to make sure what we have as a schedule of procurements does meet the challenges that our strategic circumstances present.

JOURNALIST: Nancy Pelosi's visit has been criticised by Russia, North Korea and China. Does the Australian Government support Nancy Pelosi's show of support for the democracy, given these uncertain strategic times?

PRIME MINISTER: The level of US engagement with our Taiwanese counterparts is a matter for them.

JOURNALIST: Looking at the overall defence spending, are you prepared to make significant changes if you find that we are fighting an old war? For example, tanks for more cyber-security, or the fact we need to be fighting an information war, do we need to go back to basics about what kind of conflict we may be facing?

PRIME MINISTER: We're not pre-empting the outcome of the review. The reason why we're having a review is precisely because the strategic circumstances in our region and what is happening has changed. Governments shouldn't be immune from being prepared to make appropriate changes based upon proper advice. Now, we have had regular meetings of the NSC, we're looking at the whole range of issues, we're working closely with Angus and with the Department in terms of how we go forward. But this review is a substantive one, as Richard has said. It is about making sure that we can be absolutely confident that we are getting this right. Because the consequences of getting it wrong are known to all. We need to make sure as well we have a responsibility to taxpayers to make sure every dollar is going into the right area and that's something that is supported by the Department and supported by the ADF.

JOURNALIST: Prime Minister, Angus Houston just told us that the security situation is the worst he has seen in his lifetime. Do you agree with that assessment? With regards to the review, is AUKUS and the nuclear submarine side of it immovable, as an Australian commitment? And should they recommend they be brought forward? What will the Government do to ensure we do the nuclear subs earlier?

PRIME MINISTER: I do agree with Angus Houston's assessment. And I also know that AUKUS isn't just an arrangement that is about the subs. And that's part of the context of this. The AUKUS arrangement is something that the Government supports. It's a comprehensive arrangement. One of the things that the review will consider is interoperability between Australian defence assets and that of our allies. That is one of the things that the review will be looking at, which is why this is a timely review, as the DPM said at this time. But Richard?

DEPUTY PRIME MINISTER: It's a very important question. We are committed to AUKUS, as we've said many times. And the process which is under way through AUKUS will be about how we deliver for Australia a nuclear-powered submarine. We've talked about the fact the failure of the former Government to advance the questions of submarine procurement has left us with the potential of for capability gap. We need this capability as soon as we can get it. And the truth is, despite what the Opposition has written since becoming the Leader of the Opposition, where the last Government left us, the prospect of not getting those submarines until the 2040s. The AUKUS work will look at how we can get that as soon as we can. It will look at if there's a capability gap arises, how do we plug it? And all of that is what we'll seek to announce as a result of the AUKUS work in the first part of next year. It matters this review happens concurrently with that. We're talking about, in the submarines, probably the most significant platform that exists within our defence force. It really matters this review and the AUKUS work are able to cross pollinate each other, if I can put it that way. They're apprehending each other as that work goes ahead. And so, we've done that very deliberately. With a view to both bodies of work coming to a conclusion in the first part of next year.

JOURNALIST: I have a question on the Voice to Parliament so I'm happy to come back to you.

PRIME MINISTER: I'll be doing another press conference today as well.

JOURNALIST: Indonesia is not happy with our plan to acquire the nuclear-powered submarines. They're taking it to the New York conference. Are you concerned that as we pursue this we may damage our relations with the nation in the context of the region being contested?

PRIME MINISTER: We have a very positive relationship with our friends in Indonesia. I made sure that my first bilateral visit as the new Australian Prime Minister was to Indonesia. To sit down one-on-one with President Widodo. Those discussions were collegiate. They were constructive. And I believe that they advanced that relationship.

JOURNALIST: Given the long lag time between decisions taken in defence and the arrival of programs, both these gentlemen would be effectively reviewing I suspect programs that they themselves had a hand in deciding. Would you not have been better off choosing fresh pairs of eyes to look at this problem?

PRIME MINISTER: We looked at the best people to conduct this review and we found them.

JOURNALIST: So, just following up on that question about Indonesia, you have started off with a very strong relationship with Indonesia. But there's no doubt that working paper they filed to the UN has very strong language about this and there's now reports they're lobbying 120 countries to increase the tough language on nuclear propulsion technology. Is that something you in turn are lobbying as well against, and are you hoping to maybe avoid Indonesia striking that new agreement?

PRIME MINISTER: We have a very constructive relationship with Indonesia. We obviously don't talk about all of our diplomatic measures that we take. That's the nature of it. I said in a range of contexts, I'm not just talking about this one, the Government I lead will conduct our diplomacy appropriately and not aimed at domestic political purposes. We'll do that across the board. So, regardless of what question I get in that sort of context you will get the same answer, which is the way that Prime Ministers should conduct themselves.

JOURNALIST: I just had one on interest rates. Should I wait?

JOURNALIST: PM, no-one wants conflict, obviously. But hearing the assessment of Sir Angus, the declining 10-year warning window, other warnings from people like Admiral Philip Davidson, is conflict with China inevitable this decade?

PRIME MINISTER: We need to do all that we can to advance peace and security in our region. And that is our starting point. I visited Ukraine a short time ago. I saw firsthand, on the ground, the consequences of what conflict looks like. I spoke firsthand to families in Kyiv and surrounds. I firmly believe that one of the objectives front and centre of having a strong defence of Australia is to make sure that we avoid conflict. That is the objective of this Government. And I believe that's the objective which the Australian people want to see. And this focus is very much on just that. I might take a couple of additional things outside. So, I will take a couple of questions here on other matters that have been foreshadowed and then, as I said, I've already given notice that I will be doing another press conference. Can I thank Stephen and Angus very much. I'm not sure if they've got a position on the Voice.


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