Peter Stefanovic, Sky News

SUBJECTS: Ukraine; Defence spending; Power prices.

PETER STEFANOVIC, HOST: Let's go to Canberra now. Joining us live is the Deputy Prime Minister and the Defence Minister Richard Marles. Minister, good to see you, thanks for your time this morning. So you would have seen the pictures overnight, Putin's revenge. It was brutal, it was dangerous and it was deadly amongst other things as well. What's your response to that?

DEPUTY PRIME MINISTER RICHARD MARLES: Well, these were really appalling attacks. I mean, they've obviously been launched with a complete indifference to civilian casualties and it would appear that there have been civilian casualties. They were launched at the heart of urban areas in Kyiv and other parts of Ukraine. I was actually with the Ukrainian Ambassador when the news broke about this and the sense of heartbreak was really palpable and I think what it says is what we've known, which is that this is a conflict which is going to be protracted and that we need to be making sure that we are supporting Ukraine over the long term so that we're putting them in a position where they can actually resolve this conflict, end it, on their own terms.

STEFANOVIC: We have already been generous in our response, but as you point out there, rightly, the war is not nearing an end. Will you commit more hardware? And would you even consider sending military personnel to Europe to train new recruits?

DEPUTY PRIME MINISTER: Well, we're talking with Ukraine about the best ways in which we can support them over the long term. There is an enormous sense of gratitude about the support that we've already committed, through Bushmasters and through other hardware and the Ukrainian Ambassador was very keen to make that point. But we do understand that this isn't going to end anytime soon and our objective and I think, you know, the objective of those countries supporting Ukraine is to make sure that Ukraine is in a position to resolve the end of this conflict on its own terms, because the unprovoked aggression of Russia against Ukraine is just not a proposition that can be allowed to stand, and that means we need to be with Ukraine over the long term. So yes, we will be working up further support for Ukraine, and that's a conversation that we're having with him.

STEFANOVIC: Okay, so sending troops to train Ukrainian troops?

DEPUTY PRIME MINISTER: Training is one of the measures that is being looked at. We're looking at a range of other ways in which we can provide support, but ultimately, what we need to be doing is thinking about how we can -

STEFANOVIC: So, what other ways? Sorry Minister.

DEPUTY PRIME MINISTER: Well, I mean, obviously you can see the support that we've provided up until now, so Ukraine really appreciates that and they're looking at whether there is more of that support available. We just need to work out, obviously, what we can do, but what we can do in a way which gives the best bang for buck and actually does support Ukraine over the long term. But I want to emphasise there is an enormous sense of gratitude from Ukraine to the whole of the Australian people for the support that has been provided up until now. We're just about the largest non-NATO contributor. There is this sense that they're getting support from the other side of the world and they're really grateful for it.

STEFANOVIC: Yeah, and I suppose that there is eventually a limit to what we can afford as well. You mentioned yesterday that you inherited a defence procurement mess. Because the previous Labor government also trimmed spending though, have you got to share some of that blame as well?

DEPUTY PRIME MINISTER: What we have inherited is 28 projects which are running at an accumulated total of 97 years over time. And that all happened under the former Coalition government because they were asleep at the wheel. They were simply not managing our procurement budget. And it's not a surprise, they had six, really seven, defence ministers over the course of nine years and if you're turning a defence minister over every 18 months, we shouldn't be surprised that there was absolutely no leadership being provided to Defence from the government of the day and that's why we're in the situation now. And the point that we're really making is we are facing the need to have a growing defence budget over the medium to long term, that is a function of the strategic threat that the country faces, and so it's really important that that money is spent wisely, that we're not wasting it, and that we are getting the highest capability available to keep Australians safe. That's going to be our focus in the way in which we manage this budget. But what we saw over a decade is really negligence on the part of the former Coalition government and a government that was asleep at the wheel.

STEFANOVIC: Minister, energy prices will soar by a minimum of 35 per cent next year. It will probably lead to inflation and perhaps even interest rate rises off the back of that. Is it time to admit that Australians won't see a $275 reduction in electricity prices this term, as promised before the election?

DEPUTY PRIME MINISTER: Well, the issue that we face again is the fact that over ten years there was four times as much dispatchable energy that came off the grid as was put onto it and that really is a function of the former government being completely at war with itself around the whole question of energy policy. Over that period they couldn't land an energy policy. We've changed that, Pete. We've now got a settled energy policy in this country and we've got it through the Parliament. We are working with energy companies to deal with the immediate pressures in relation to energy prices, but we also have a plan going forward to upgrade the grid to allow more renewable energy to come online and that will have the impact of reducing energy prices over that period of time.

STEFANOVIC: So are you still committed to that promise that people will see savings of $275?

DEPUTY PRIME MINISTER: Well, we continue to stand by the modelling in relation to this and the reason we do is because what's really clear now –

STEFANOVIC: That might not happen?

DEPUTY PRIME MINISTER: No, no. We stand by the modelling and the point to be made here is that very differently - compared to the time when I was elected to Parliament back in 2007 - today, the cheapest form of power is renewable energy, but you need to get it on the grid and you need to have a smart grid which can accept it. And that's the work that needs to be done. That's the work we're going to do. That's what we've already started to do and that is going to give rise to a downward pressure on energy prices, but you don't fix 10 years of mess in the course of just a few months, although we have started the process. And in the immediate moment, we will be working with energy companies to look at ways in which we can alleviate that pressure.

STEFANOVIC: Okay. Richard Marles, I appreciate your time thank you. We’ll talk to you soon.

ENDS