Interview with Greg Jennett, ABC Afternoon Briefing

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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14 March 2023

GREG JENNETT, HOST: Well, back home today marked the public fulfilment of something Defence Minister Richard Marles has been deeply immersed in since the Albanese Government's election. This day, Richard Marles is also Acting Prime Minister and he joined us here in the studio.

Richard Marles, thanks for finding some time for Afternoon Briefing on what I do know is a hectic day for you. I sense in your public remarks over recent days you definitely grasp the enormity of this undertaking that you've steered these last 10 months. Then you follow that up today with a reference to risks that keep you awake at night. What's the biggest of those?

RICHARD MARLES, ACTING PRIME MINISTER: Well, this is obviously a venture which has a whole lot of risk in it. This is an enormous industrial endeavour which is on the same scale as the Snowy River Scheme and it's going to play out over the course of decades. There are lots of moving parts and making them all come together is going to be a challenge for – I mean, for our Government, but I think for governments of this country over the next few decades. There's a number we could go through, I think making sure that we get the human dimension right is going to be really important. So we need to be focusing on skills training so that we have the skilled workforce who can build the submarines, particularly. Obviously, we're going to have to grow a submariner base who can operate the submarines. I think that's an example of the kind of challenge which is in front of the country. But of course, every one of those challenges is also a huge opportunity. I mean, in describing that, we're talking about great jobs and great futures that Australians can pursue. And obviously the Government will do everything we can to make sure that all happens.

JENNETT: And being caught short in some window where the Collins were ageing, but the Virginias have not yet arrived, and yet something precipitous, heaven forbid, were to happen in our region. That would be the nightmare scenario, wouldn't it?

MARLES: Well, I feel a lot better about that, given what we are now doing in terms of having a nuclear-powered submarine capability from the early 2030s. Collins is a really capable submarine. In 2023 Collins does an incredible job and provides our country great service. The point that we're making in relation to Collins is that if you project through until 2040, say, running a diesel-electric submarine with its requirement to snort – which means going to the surface and recharging its batteries, which is quite a loud thing to do in submarine terms – that's going to be a diminishing capability as technologies grow which can detect that. Now, Collins is absolutely fine now, and I feel confident that with a nuclear-powered submarine capability entering our Navy from the early 2030s, we don't have a capability gap – in fact we have an evolving submarine capability.

JENNETT: Yeah. And the phasing is obviously designed around that. Can I take you to some of the non-proliferation issues? There's a bunch of questions about the waste that Australia has stepped up to say it will take responsibility for.

Before we get there, though, China's Ambassador to the UN has tweeted, “this is clearly violating the object and purpose of the Nuclear Non-Proliferation Treaty”. Now, that wouldn't be unexpected to you, but will you make any attempt to try and dissuade China of that view?

MARLES: Well, I mean, what we are doing is working with the IAEA to make sure that we are compliant with our non-proliferation obligations. We said from the outset that that was a fundamental pre-condition for an Albanese Government walking down this path. And it remains that the IAEA, in turn, have made it clear that a country running naval nuclear propulsion does not of itself violate non-proliferation obligations. What matters is that you have a complete assuredness and transparent assuredness that the nuclear material is accounted for at every moment in time. And we can do that. We can do that because we're talking about a sealed nuclear reactor. And we can do that because we've made the commitments that we've made about dealing with the reactor at the end of life.

JENNETT: How many kilos – how much highly enriched uranium is in a reactor as we move many, many years from now, to having to safely dispose of it?

MARLES: Well, it's not going to surprise you to hear that I can't tell you that, because that ends up being very classified information. But it's a significant undertaking to deal with the reactors at the end of their life, and this will require a purpose built facility in order to do that. So that people are clear, we're talking about the first reactor needing to be dealt with in the 2050s, so this is a long way into the future. But we need to be planning for that, and what we've made clear today is that within the year we will announce a process by which that place will be identified – so we won't identify the place in a year, but we'll announce the process for that and what that facility would look like.

JENNETT: What broadly are the characteristics that you'd be looking for?

MARLES: Well, I mean, it obviously needs to be remote from populations. We need to have a place where there's geological stability and where we can be really clear that we can secure this. And we're actually blessed with large parts of the country where that's possible. We have made clear this will happen on Defence land, be it current or future Defence land.

JENNETT: Due to some advantages around land mass and population, is Australia open to the idea of receiving or hosting spent fuel from either of the other AUKUS partners?

MARLES: We are focused on managing the nuclear material that we will be in charge of – dealing with our own nuclear reactors, the reactors that will be in Australian submarines. I think is an important part of Australia's nuclear stewardship and that is all we are focused on.

JENNETT: Only Australia’s, to be clear?


JENNETT: All right. On funding, you've given us average funding requirements over 30 years. But averages can be misleading because the vast bulk, $200 to $300 billion of these costs, fall in the back two decades. In that sense, your GDP increase of 0.15 per cent doesn't really explain the pain that future Treasurers and governments are going to experience here, does it?

MARLES: Actually, it is the best description of that through the life of this program. And it's true that it will vary from year to year. It's not quite true to say that all the costs are in the back end. I mean, there are parts over the profile of the expenditure varies as you go across the life of this program –

JENNETT: Yeah, but in the medium-term, according to this chart from the government put out today, it's only $50 to $58 billion that falls before 2033?

MARLES: And we've given a costing through – well, we're talking about 0.15 per cent and you're extrapolating a number into the 2050s, and whenever you do that, you end up building in supposed inflation rates and exchange rates in 2048 or 2052, and those things end up being a complete guess. The way to describe this is as a percentage of GDP,  and through the life of the program, this will be about 0.15 per cent of GDP. To put it in context, we spend right now 2 per cent of GDP on defence. We're projected to grow that to 2.2 per cent of GDP and that's where the 0.15 per cent fits. And when you think about it in those terms, this capability will do more in terms of transforming the potency and the capability of the Australian Defence Force than any other step that we have taken. So relative to the rest of the defence spend, this is the most value for money we will get in terms of any of that.

JENNETT: Right, but this isn't the end of the story, is it? You may well be, as part of your Strategic Review due out next month, taking that defence spend even higher as proportion of GDP? Certainly that's been demanded or suggested by many.

MARLES: Well, we've consistently said that we expect the defence spend to grow as a percentage of GDP into the future. We've not made any secret of that. And really, at the end of the day, in a rational world, the spend of GDP is a function of strategic threat and strategic complexity. We live in a world where both of those are present and we're rational people, so we'll make decisions accordingly –

JENNETT: Do you have to make some as soon as next month because you are upping the spend on other elements of kit – surface ships and weaponry?

MARLES: Well, we've made clear that over the Forward Estimates, Defence can deal with the increase in spending associated with the submarine program. And so within the existing funding envelope for Defence, there is a neutral result over the Forward Estimates. We've made that clear and that comprehends the DSR as well. Beyond that, there are challenges that the DSR raises and we'll be talking about them when we announce the DSR in a month's time or so. And it forms part of the planning that we need to go through.

JENNETT: What exactly does the investment – not insignificant – the investment of $3 billion Australian dollars in Connecticut and Virginia, what does that actually buy us, or the Americans for that matter? Is it an increase from, I think, their scheduled drumbeat, as they call it, two boats per year, stepping it up? Does it make it two to three?

MARLES: Well, fundamentally what it does is open the door to Australia having Virginia class submarines in our fleet from the early 2030s. That's what it does. And in Australia's national interest, that's why we are walking down this path. More specifically, it will be money which will be spent on the sustainment operations in America which allow Virginias, which are currently in maintenance, to be able to be put into operation. And that offsets, from an American point of view, the Virginias coming to Australia.

JENNETT: Wages for American workers?

MARLES: Well, sure, but the vast bulk of what we're spending is on wages for Australian workers, and we need to understand that the biggest industrial uplift that you will see in what we are spending is here in Australia. And that's the case over the Forward Estimates. Even more the case when you go further into this program. And that's an important point to understand as well, because we need to make our contribution to the net industrial base of the three countries in order to have a program of nuclear submarines in the Australian Navy. And so there will be a very significant industrial base developed in Australia which we are doing from the point of view of getting our capability, but which will obviously have a tremendous dividend in terms of the jobs that it provides and the technological uplift, really, in our broader economy.

JENNETT: Now, we've set a very slow schedule on the build of the AUKUS SSN compared to the UK yard. We’re starting, we're told by the Prime Minister and yourself, towards the end of this decade, and yet the first boat doesn't come off from the Australian line in Osborne until the 2040s. What's the reason for that? Is the design even ready for us to get started at the end of this decade?

MARLES: Well, there's a whole lot of design work which will need to be done, clearly. We are starting the process now and our objective is to have the capacity to make a nuclear-powered submarine in Australia as soon as humanly possible. We want to be prudent in terms of our estimates about that. I mean, defence procurement's history has been littered with time blowouts and cost overruns, so we want to be sensible from the outset. But if you want to know our objective, our objective is to do this as quickly as possible. And it takes a long time to do, not just in terms of the build, although that does take a long time to do, but we're starting from scratch in the sense of needing to construct the yard, which will happen straight away. And so there's a whole lot of work associated with that which is obviously already there in Britain and America. Right now, you've got nuclear capabilities – or industrial lines – at Electric Boat, at Huntington's in America, BAE in Britain. This will be the fourth across the three countries and we have to actually construct that first before it's in a position to start then constructing the submarines.

JENNETT: Understood, so a bit of catch up there. Do you have to be an Australian citizen to sail on a Royal Australian Navy nuclear-powered submarine?

MARLES: Well, I would imagine that in the future we would have an opportunity for members of the Royal Navy in Britain or the United States Navy sailing on our submarines, because right now there are Australians who are operating on their submarines.

JENNETT: What about commanding them?

MARLES: Well, from the moment that this is an Australian flagged vessel is the moment there is an Australian commander and is completely under Australian control. And the crews will be Australian. I don't want to rule out the idea that there might be an American or a Brit on board because, as I say, there are Australians on board their submarines right now –

JENNETT: The scenario I’m looking at I suppose, is we weren't quite ready technically to sail it ourselves, could we swear as a citizen an American to join the Australian Navy?

MARLES: We are going to have Australians commanding Australian submarines from the early 2030s, and that is what we are working to. We will seek to grow a submariner force on American and British boats from 2027, so they will be American flagged, British flagged and we will have an increasing number of Australians on board those boats as we learn how to operate them. But from the moment it becomes an Australian flagged vessel, which as we've announced, is anticipated to be from the early 2030s, then it is Australian commanded.

JENNETT: All right, well a lot to get through both today and in the years ahead, which probably means we'll be talking about this many more occasions from now. Richard Marles, great to catch up today, thank you very much.


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