Television interview, ABC News Breakfast

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The Hon Richard Marles MP

Deputy Prime Minister

Minister for Defence

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02 6277 7800

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15 March 2023

SUBJECTS: AUKUS; Downing of US drone; Energy prices

MICHAEL ROWLAND, HOST: Okay, let's go back to the fallout from the AUKUS subs deal announcement and bring in the Acting Prime Minister and Defence Minister Richard Marles. Very good morning to you. I want to get to AUKUS in a moment, but first, get your reaction to this worrying development over the Black Sea overnight. A Russian fighter jet forcing down a US drone. The Americans say it was reckless and could lead to unintended consequences. Gee, this is the last thing the world needs right at the moment, isn't it?

RICHARD MARLES, ACTING PRIME MINISTER: Well, look. Good morning, Michael. I've seen those reports. I'm not privy to anything which is not in the public domain. But I agree with you that it's a very worrying development. It seems clear the American drone was flying in international airspace, so it was acting completely lawfully. I mean, quite often you will see interactions between militaries in international airspace, international waters, but the expectation is that occurs in a professional way. And what's really clear here is that that's not what's occurred with the Russian intercept and it's resulted in the drone going to ground. And I think this, again, is an example of Russia not playing by the rules, which is actually what's at stake in the whole conflict in Ukraine. And I think it's very clear that Russia have some explaining to do in terms of the way in which they've acted in respect of this drone.

ROWLAND: Well, speaking of not acting by the rules, China is accusing Australia, the US and Britain of not following the rules with this AUKUS subs announcement. The country says you're all on a path of “error” and “danger”. What's your response to that?

MARLES: Well, we are making a decision in our own national interest where we are seeking to acquire this capability to make our contribution to the collective security of the region and the maintenance of the global rules-based order within the region. And one of the issues that we face within our region is that we are witnessing the largest conventional military build-up that the world has seen since the end of the Second World War. Now, it's not Australia who is doing that, but that shapes the world in which we live and we would be condemned by history if we don't put ourselves in a position where we can be able to guide Australia through that difficult set of strategic circumstances and maintain our national interest into the future. And look, the decision that we are making is going to hand to our kids and our grandkids a much more self reliant country and a country which we will be able to keep safe.

ROWLAND: We're handing to our kids and grandkids a huge bill as well. $30 billion the government, or governments, will have to find over the next decade. The Budget’s in structural deficit already. So much other pressures bearing down on the Budget. We're talking seriously here, either about spending cuts or tax increases down the track to help foot the subs bill, aren't we?

MARLES: Well, we've been very upfront about the fact that we see the Defence Budget growing over the medium to long-term and that it faces one of the pressures that we're dealing with in respect of a budget. A budget where we've been making very significant decisions. I mean, we returned 99% of the revenue upgrades in the first Budget that we handed down to the budget bottom line. They're the kind of sensible budgetary decisions that we are making, given that we've inherited a budget with a trillion dollars of debt. But we've been very upfront about the fact that Defence will be one of those pressures on the Budget. But I'd make the point, Michael. You can extrapolate any particular government program through to the mid-2050s and you'll get a large number. This is 0.15% of GDP we're spending on the submarines in a context where our defence spend is currently 2% of GDP, growing to 2.2%. And this completely transforms the capability, the potency of the Australian Defence Force. But the other point I'd make is that the vast bulk of that will be spent in the Australian economy itself. So you're talking about 20,000 direct jobs being created by virtue of the spend in respect of the submarines. So there will be an economic dividend associated with this and it will see an enormous increase in the technological capability of our broader economy.

ROWLAND: Our time is short, Minister. I just want to finish by asking you the other bit of breaking news this morning. The Australian Energy Regulator confirming that despite the Government's caps on power prices, many parts of Australia will face power price increases of more than 20%. Just confirming – and it's going to be an even tougher year right, for so many Australians?

MARLES: Well, we understand the pressures in relation to to power prices. It's also really clear that the step that we took in December of last year has given rise to a downward pressure on power prices. I mean, the forward electricity prices in February were half of what they were in November prior to making that decision. But it's precisely because of what we saw happening here that we thought we needed to take a step. We've done that. Those power prices would be much higher, but for what we did in December. And of course, the Opposition was given an opportunity to stand with us and vote in support of household budgets and they decided to vote against them.


ROWLAND: Richard Marles, really appreciate your time this morning. Thank you.

MARLES: Thanks, Michael.


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