16 March 2023
GARY ADSHEAD, HOST: Defence Minister Richard Marles joins me on the line now. Thanks very much for your time, Minister.
RICHARD MARLES, DEPUTY PRIME MINISTER: Great to be here, Gary. How are you?
ADSHEAD: And of course, you are in Western Australia, where there's been a series of announcements, of course, around this. I'll just ask you straight up, just for people listening, you know, and I'm sure you're fully aware, that with all the talk of military hardware and military muscle and whether we're pitting ourselves against China, people get anxious Minister. What can you say to them to suggest that Western Australia, given that it's going to be escalated in terms of all that submarine and military activity here, will not become more of a target?
MARLES: Well, everything we're doing is about trying to make the country safer and Western Australia safer. And I think that the starting point here is that when we are acquiring a really formidable capability in terms of a nuclear-powered submarine, and yes, it has the capability to operate during war. But if you want the true intent of these submarines, it's actually to provide for the increased stability and ultimately the peace of our region. And I genuinely believe that it will contribute to that. I think what this does is actually provide for the collective security of our region and an underpinning of the rules-based order – the rules of the road, our trade routes, which is so important for our economy. But that's really the answer to the question. Australia having this capability actually, I think, contributes to a more peaceful region and provides for a greater safety for our community, including the West Australian community.
ADSHEAD: Okay, so when we hear – and we're all aware of the posturing that goes on between nations – and of course, China has come back with its – or just before the deal was announced, talking about its wall of steel and so on – what do we do about that, given that, and again, we're about to spend $368 billion to protect the trade routes for Australia against our number one trading partner? I mean, there's a certain sort of satire in all of this.
MARLES: Well, there's a couple of points to make. Firstly, the large numbers that people are quoting are numbers which are not about to happen in the sense that they're projected over a 30-year period. And there are a whole lot of aspects of government where, if you project them over that length of time, you'll get similarly large numbers. I mean, what this is about, as I said, is ensuring that we make our contribution to the collective security of the region, because the defence of Australia doesn't really mean much unless we have the collective security of the region. The context of us being a trading island nation where much harm can be done for Australia before anyone ever sets foot on our shores. But the point I then want to make is we value a productive relationship with China. And we've been doing everything we can to stabilise our relationship with China, and we've made progress in relation to that. China is our largest trading partner and we value the productive relationship that we have. In saying all of that, it's really important that we get the hard power equation right and that we take the steps that we need to, to make sure that we can keep the country safe in what is a pretty difficult geostrategic environment, and one which it looks as though will get more difficult in the coming years.
ADSHEAD: I'm sure you realise that I have to do this, but clearly yesterday Paul Keating had a lot to say on AUKUS around the Government's decisions. I'll just play you a little portion of it, if you don't mind, and just get your reaction.
ADSHEAD: That doesn't help your arguments, does it?
MARLES: Well, obviously, Paul Keating is completely entitled to say what he wants. And whatever Paul says about this or about us, you're not going to hear a bad word from me, or indeed from anyone in the Government about Paul Keating. I really feel that the Hawke-Keating Government was the great reformist, peacetime, long-term government in our history. And Paul has an incredible legacy. It is a government which finished in 1996 and our responsibility is to look after the nation and our nation's security in 2023. And in that context, the world in which we live today is one where we have a lot more trade with the world, and actually, that's one of the achievements of the Hawke-Keating Government. That's been greatly beneficial to our economy, to the prosperity of the Australian people. But it does mean we're much more connected to the world and particularly to East Asia.
Now, to give a practical example of that, in the 1990s, there were eight refineries in Australia which produced most of our liquid fuel needs. Today there are two, there are none in Western Australia now. We import almost all of our liquid fuels from overseas, most from one country being Singapore. Now, you don't have to think very hard about what would happen if that one trade route was disrupted, what that would mean for Australia. And that's why it's really important that we have capabilities which would give pause for thought for anyone, any adversary, which would think to disrupt those routes. And that's why this capability is so important, and that's why we need to make sure that we are evolving the capability of our long-range submarines, which is what the Collins class are now. But to make that an effective capability into the 2030s and 2040s, we're going to have nuclear-powered submarines. And it's fundamentally important in terms of the way in which our national security is now structured.
ADSHEAD: Okay, just a couple of things, if you wouldn't mind, just on behalf of listeners that were certainly calling about this particular issue. This is clearly an acceptance that what the Morrison Government did in ripping up the deal with the French was the right way to go? Given all the announcements we've seen in the last 48 hours, the grand scale of it.
MARLES: Well, there is no doubt that walking down the path of acquiring a nuclear-powered submarine capability is fundamentally important for our country. And yes, that happened under the Morrison Government. It also has to be said in the same breath that the Abbott-Turnbull-Morrison Government were in power from 2013 – they walked in and out of a deal with Japan, they then walked in and out of a deal with France. We had the better part of a lost decade there, and a lost decade when we could least afford it in terms of the strategic circumstances which we now face. Strategic circumstances where we are seeing within our region the biggest conventional military build-up that we have since the end of the Second World War. And that's not Australia doing that, but that is the landscape that we need to respond to.
Now, the fact that we lost that decade under the former Coalition Government has put the country in a pretty challenging situation in terms of dealing with questions of a capability gap. And when we came to government, there was really no answer to that that had been provided by the former government. The acquisition in the early 2030s of Virginia class submarines from the United States – which is a huge decision for the Americans to make and it's going to be hugely beneficial for us – answers the question of the capability gap. So there's been a lot of work that's needed to be done to deal with that lost decade that the former Coalition Government gave us. We're seriously doing that and we've got an answer here which will, I think, hand to our kids and our grandkids a much more self-reliant country and one where we can ensure our safety for decades to come.
ADSHEAD: Okay. My guest is the Defence Minister, Richard Marles. Can I just ask you this, obviously your Government and the Reserve Bank have been in an arm wrestle with inflation. Is this an inflationary decision with all the money that we're talking about here, going out there and into the economy?
MARLES: Well, again, I think we need to just think about the numbers over the period that is being described. The large number that gets quoted is through to the 2050s. What we've made clear over the course of the next four years during which we are experiencing these inflationary pressures, which are a function of what's going on around the world, is that this will be a cost neutral outcome in respect of the Defence budget. That is, Defence are covering – out of the existing envelope of money that Defence has ascribed to it – Defence is covering the costs of this program over the next four years. Now, I don't think anyone would have imagined that we would have been able to achieve that result over the Forward Estimates – over the next four years – when we came to office. So I don't think it does contribute in the way in which you've described. This is a program, though, that's going to run over the course of decades and over that period of time.
I think the best way to think about the cost is this is about 0.15 per cent of GDP that will be spent on this capability, in the context where we spend 2 per cent of GDP on Defence and that's growing to 2.2 per cent of GDP. And when you think about the transformational impact that this will have on our Defence Force, on the potency of our Defence Force, this is the best value for money – 0.15 per cent of GDP – that we will spend.
ADSHEAD: Can I ask you as well whether or not WA is in the mix for the disposal of the nuclear reactors that will have to happen after the lifespan of the submarine nuclear reactors? What would you say to that in terms of where are they going to be disposed of?
MARLES: Look, it's a heavy responsibility that we've taken and it's one that we need to take as a nation in order to demonstrate our nuclear stewardship. And that means looking after the nuclear material through the entirety of its life, including its disposal. I want to be clear that we're not talking about needing to dispose of one of the used nuclear reactors until the mid-2050s, so there's a long way into the future. We've made it clear that an appropriate site will be found in the country, it will be on Defence land, current or future. It's obviously not going to be near population centres. What we've made clear is that we will go through a process in relation to that and within the year we will describe what that process will look like for identifying the site – so that's not to say we'll identify the site in 12 months, but we will establish a process by which that will happen. We've got the time to get this right. We don't need to, as I say, be disposing of any of these reactors until the mid-2050s, but it will require a purpose-built facility, but we do have the time to get this right.
ADSHEAD: Okay, and I understand that the Premier was asked about this very question this morning and Premier Mark McGowan says no, he doesn't want any of it here. What's your reaction to that?
MARLES: Well, we'll work with the Premier of Western Australia as we'll work with the Premiers of all the states as we go through this process. We are committing to disposing of the material within Australia. We will put in place a process in the next 12 months for how that's to occur. We've got time to sort this.
ADSHEAD: And finally, Minister, obviously you're here to talk as well about what this will mean for WA economy and also jobs and so on. Are we talking thousands of jobs? Are you confident that we can provide those people?
MARLES: Yeah, we are talking about thousands of jobs. And I think this is going to result in a huge economic benefit for the state of Western Australia. Over the next four years, we'll see $1 billion invested into the local economy as part of establishing the infrastructure at HMAS Stirling in Rockingham for an increased tempo of visits of American and British submarines, and ahead of the establishment of the forward rotation of American and British submarines from 2027. That equates to more than 3,500 jobs – 3,000 jobs in constructing this infrastructure, 500 jobs in an ongoing sustainment capability for the nuclear-powered submarines that visit here and ultimately do some operation from here. Over the course of the decade, it’s something like $8 billion which will be invested into the Western Australian economy. And these are high-skilled jobs, really well-paying jobs, but it's a high-tech industry and so the technological benefit of that for the wider Western Australian economy is going to be profound.
ADSHEAD: Minister, I really appreciate your time in a busy schedule. Thanks very much for joining us.
MARLES: Thanks, Gary.
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