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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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dpm.media@defence.gov.au

02 6277 7800

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10 March 2023

SUBJECTS: AUKUS; Cost of living

SARAH ABO, HOST: All right, well, Australia looks set to partner with the US in the purchase of at least three nuclear submarines. The Prime Minister hoping it'll tide us over until Aussie built subs are ready, all to counter a rising threat from China. Let's bring in Acting Prime Minister and Defence Minister Richard Marles in Geelong and Opposition Leader Peter Dutton in Perth. Good morning, gents. Good to see you both today.

Richard, congratulations, first of all, as foreshadowed by Peter last week, the deal with the Yanks is done. US subs are on the way.

RICHARD MARLES, ACTING PRIME MINISTER: Well, you need to just wait, hold the horses for a little bit. There will be an announcement next week about all of this. I've obviously seen the speculation that's around. But this is a really big step for the country. This is the biggest step forward in our military capability that we've had since the end of the Second World War. And this, more than anything that we can do, will allow us, in a pretty difficult world, to look after ourselves. And it has very much been a bi-partisan effort. I acknowledge Peter, who was there at the start when AUKUS was first announced. But this is a really significant moment for the country.

ABO: I mean you're saying to hold our horses for a little bit, the trouble is we'll probably be holding our horses for a long bit. I mean, when are these subs actually going to be here? We're seeing it blasted across the SMH this week that we could be at war with China within three years. The subs simply aren't going to be here in time.

MARLES: Well, I think I'd want to give people a sense of confidence that the submarines that we have right now, the Collins class submarines, are really capable submarines in 2023. So we have a capability, I've spent time on those submarines and it's a very good capability. But the question is whether or not it will be the same capability in the mid-2030s, which is why we've got to be thinking about that right now. And really, the whole steps that we're taking here is about making sure that with our submarine capabilities, we are able to grow that. But it remains potent because there is nothing which gives any adversary a second thought more than a capable submarine, which is why it's so important that we are bringing to bear this capability in the future.

ABO: Peter, this is obviously an initiative that the Coalition started when you were in government. I mean, it's something that's going to cost us $100 billion. It's very, very expensive. It is a bit of a stopgap measure, though, this new announcement. Is this a concern?

PETER DUTTON, LEADER OF THE OPPOSITION: Morning, Sarah. Look, I think this is a great outcome for our country and full credit to Richard. This is one of those issues where there truly is bi-partisan support. The public often say politicians fight too much or there are stances taken that are in the short-term interest. This is in the long-term interest of our country. And when we negotiated AUKUS with the United Kingdom and the United States, what we had in mind was decisions that would keep our country secure in a very uncertain time, as you point out. And the deterrence that Richard talks about is there on full display when you've got these nuclear-powered submarines that can lurk in the waters. And adversaries would think twice about causing harm to our country, knowing that we have this capability. And the Virginia class is an established class, so you don't have the problems of a first-in-type, the new design, cost blowouts, et cetera. So the acquisition of the Virginia class is in our country's best interests and we strongly support it. Richard said some very nice words in Parliament yesterday and I reciprocate because I think the coming to fruition of this deal is a very good day for our country.

ABO: I guess, obviously you've rallied against nuclear subs from the UK in the past. Now the British High Commissioner this week blasted you over that. I mean, agitating an ally, is that really a good idea?

DUTTON: Well, I saw those silly reports. I had a very pleasant catch up with the High Commissioner and there was no rebuke, there was nothing more than a conversation about staying engaged once the detail was announced next week. So she said no such thing. So just to put that into perspective, and I've confirmed that with her by text yesterday, so I wouldn't believe that media speculation.

My concern, first and foremost, is to support a decision which is going to be in our country's best interest, not in any other country's best interest. What is best for Australia, and what is best for Australia is that we have the Virginia class capability, because, as I say, it's an established type, it's not going to have cost overruns and time blowouts. And time really is of the essence. We shouldn't kid ourselves about what we face in the region at the moment. And if that gives longer time for a new design to be worked up and the problems to be ironed out, well, that's a good thing. And as Richard rightly points out, the capability of the Collins class submarine takes us into the 2040s as well. So there's no capability gap, and we can acquire a submarine that will really help train up the workforce, because the workforce is going to be the next biggest issue, getting those people trained on nuclear submarines.

ABO: And it's obviously important for Australia to take a bit of a lead here as well, because we are right in the middle of any impending war that comes. So that is something to be mindful of as well.

Now, let's just move on now to obviously these interest rate hikes that we're seeing. Philip Lowe, Richard, if he's to be believed, says the RBA might soon pause the lifting of interest rates. Can we believe him this time?

MARLES: Well, obviously it's a matter for the Reserve Bank, but we're really aware that interest rates are having an impact on family households and on small businesses – and big businesses for that matter. And global inflation, which is obviously what's driving that, is having a big impact. And obviously that's why we're really focused on all the measures that we've put in place around reducing cost of living, such as cheaper medicines and more affordable childcare. But it's also why we took the steps we did at the end of last year to put a downward pressure on power prices, and that's now being proven to work. So we've got to get through this inflationary period. The forecast is that inflation will come off as we progress through the rest of the year. But it's really important that government is doing everything it can to help ease those household budgets, and that's exactly what we're doing.

ABO: Yeah. We do need some relief, absolutely, for those families struggling out there. Peter and Richard, we've run out of time this morning, but thank you both for joining us.

ENDS

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