In Conversation with Chief of Navy, Vice Admiral Mark Hammond

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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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7 November 2023

SUBJECTS: Indo-Pacific Sea Power Conference; Global rules-based order; Defence Strategic Review; AUKUS; Independent analysis of Navy’s surface fleet.

VICE ADMIRAL MARK HAMMOND, CHIEF OF NAVY: So let's start with the rules-based order. There's been much discussion on how the rules-based global order is under challenge and some of the pundits suggest that the world is moving towards a multipolar dynamic, whereby global influence and power is held by multiple states. What are your thoughts on this? And how do you view the potential impact of the rules-based order as a result?

RICHARD MARLES, ACTING PRIME MINISTER: I think as you outlined, there is– firstly, prosperity, global growth, the prosperity of our own nation and the nations of the region, and the world is underpinned by peace, stability and security which in turn, is underpinned by the global rules-based order. In the aftermath of the Second World War what we saw with the establishment of the Bretton Woods Institutions was an attempt to try and create a set of rules by which nations can resolve their disputes by reference to a set of laws without engaging in conflict. And that has– I mean, we can obviously look at exceptions during the period of time, very notable exceptions since the end of the Second World War where that has not occurred, but by and large, we have seen an enormous amount of peace since that period of time, since the Second World War and an enormous amount of global growth as a result. I think it is right to observe that, I guess, in saying that we looked to a more multipolar world, perhaps a way of describing it is that we are facing the world which is much more complex. The strategic landscape that Australia faces is certainly more complex. But it's in that environment, for me, that the rules-based order is most important. When we think about poles, we are imagining centres on power large nations. Actually, the global rules-based order is really about, in many respects the rights of small nations. It's about enabling circumstances where be you the United States of America, or be you Nauru, you can resolve disputes by reference to a set of rules, not by reference to power. And so, I guess where I get to in my head is that the standing up for the rules-based today – look at Ukraine, at events in our own region – is profoundly important. It has to be at the centre of our strategic thought. But also thinking about it from an Australian perspective, that's where our national interest lies. And as we conceive of what our Defence Force is for, to me, it is, yes, about the defence of the continent, but much more actually, I think it is about making our contribution to the expression of the global rules-based order, certainly within the region we live and in the world. And that is the kind of, I guess, that thinking you will find centred in in the Defence Strategic Review and the Government's response to it.

VICE ADMIRAL HAMMOND: So despite living in an advanced, interconnected world, today, much of the crisis or competition that exists still stems from territorial disputes. This is true in Europe and it's certainly true in the Indo-Pacific, where maritime disputes continue to affect regional stability. What do you think is required to address these challenges and if possible, move towards a solution? And how should those most acutely affected deal with these challenges?

MARLES: Well, again, I think, we come back to the rules-based order and what it offers in terms of the opportunity to resolve disputes by reference to a set of rules. So if you want to look at what it looks like when there are no rules, or what lawlessness looks like, you can look to Ukraine.  There, as I said this morning, we are watching, I mean obviously we're watching a territorial contest between Russia and Ukraine but I think more significantly what we're seeing is Russia seeking to undermine the rules-based order and try and impose a much more brutal paradigm which is really effectively the rule of power. But where you get to is the appalling tragedy which has unfolded in Ukraine over the last year and a half, which has seen enormous loss of life. If you want to think about what rules look like, rules look like what we saw in 2022 between Indonesia and Vietnam in the Natuna Sea, where you had contest there over a significant period of time which was resolved by reference to a set of rules, by reference to the UN Convention on the Law of the Sea, with the settlement of maritime boundaries which occurred peacefully, orderly, to the benefit of both countries. If you want another example of what rules look like in this context, what played out between Australia and Timor Leste. In 2018 Australia signed, with Timor Leste, a resolution of the maritime boundary in the Timor Sea between Australia and Timor Leste. Again, reference the UN Convention on the Law of the Sea, an ordered process, a result that we are both committed to, to the benefit of both countries. Australia, East Timor, Indonesia, Vietnam – that's how rules work. That underpins peace. It is a platform for prosperity. Without rules, we see what's playing out in Ukraine. And so, you know, it's a stark choice. And again, it comes back to clearly, when you think about that, our interest lies in the maintenance of rules and standing for rules.

VICE ADMIRAL HAMMOND: COVID-19 highlighted supply chain vulnerabilities globally and for Australia in particular it highlighted our maritime trade vulnerabilities which we know could be exploited in a conflict. To name a few; Australia's reliance on importing most of our consumables, a lack of a strategic shipping fleet, a lack of oil reserves and having the capacity to protect our offshore and undersea infrastructure. How does Australia protect itself from these vulnerabilities in the future?

MARLES: Yeah, and again it's a really good question and you know, a lot of comes from this from this question. Because this question invites us to think about what our national interest is, but where our national security lies. I mean, you said it very well in your own speech, but we have seen trade grow as a proportion of our national income. I gave some of those figures this morning. In 1990, about 32% of our national income was trade. By 2020, that's 45%. To give you one example of what that looks like, in 1990, most of the liquid fuels that were used in Australia was based on refined crude oil that was derived out of Australian territorial waters, largely Bass Strait, but also [inaudible]. I think there were nine refineries at the time that were doing that work. Today, there are two refineries left. Most of our liquid fuel that we use comes to in imported, refined product, most of which comes from one country and that's Singapore, but we receive a bit from Indonesia as well, and other places. Of the two refineries that are doing refining, about half of what they refine is imported crude oil from the Middle East. So right there, we are hugely exposed in terms of the way in which we are connected to the world. And so I suppose a few things come from that. Firstly, any adversary which is seeking to do damage to our country can do enormous harm to Australia without ever setting foot upon our shores. And so in that sense, yes, there is a defence of the continent, but our national security is not really the coastline of Australia, it lies much further beyond that. So we must have the capacity to project. But projection is completely central to how we have to think about the Defence Force that we need to create and what our strategic necessity is. Now, the best example of what we are therefore doing about that is nuclear-powered submarines. I mean, if there was a country in the world which needed a capable, long-range submarine capacity, it is Australia. And to have that in the 2030s and beyond, we simply have to move to nuclear power because as you know, much better than I, diesel electric submarines, as great as the Collins class is, will become increasingly detectable going forward. So that right there is an example. We need to be thinking about longer range strike in terms of the missiles that we have, and that's a focus of the Defence Strategic Review. But I think fundamentally in a kind of strategic sense, the place we've got to get our heads to is that we need to conceive that our national security lies a long way from our shores, and that as we think about what capabilities we have, projection needs to be at the heart of it. It is a tough challenge. It does really require a very, very significant reshaping of Navy, but really the Defence Force. That is what we have to do and in many senses, in a very much a root and branch process, beginning with the Defence Strategic Review. Obviously, what we've seen with the announcement earlier in the year about the means by which we will acquire nuclear-powered submarine capability, what we're now seeing with the surface fleet review, we've got to get our thinking straight and then we've got to do it, and that's what we're going to do.

VICE ADMIRAL HAMMOND: As you mentioned, nuclear-powered submarines, I know there'll be a lot of a lot of interest in this in the room. You've just returned from another trip to the United States and the United Kingdom. How is defence engagement going with our two closest allies? How do you see our engagement with the United States and United Kingdom in the future across all services?

MARLES: So let's start with the US. I mean, the answer to both I think is really well and in both cases at a historic high level. And that's not a small thing to say given our history with both the US and the UK. But to start with the US, I feel that our national interest lies in an America which sees itself as deeply engaged with the world and I do very much acknowledge Ambassador Kennedy, who's with us today. And I think we, in this administration, are very much seeing the expression of that. Secretary Austin, Secretary Blinken, President Biden have been frequently in the Indo-Pacific region, in the East Asian time zone, giving expression to American presence here. Not just in terms of the military footprint, which exists in places like Japan, Guam, Korea, the Marine rotation in Darwin, but in a diplomatic sense as well, which is really important. So, you know, I actually give the administration full marks in terms of that. And we see the expression of that in our defence relationship, for example, in the commitment that was made by the US to Talisman Sabre, it was fantastic. As I say, in the Marine rotation in Darwin, which grows year by year. Indeed, the force posture initiatives that we agreed at AUSMIN in July show a growing American presence on our continent, working with us, of course, and within the bounds of our sovereignty and that will complement the American presence in the region. The other piece, which is important to understand in the US is, coming out of AUKUS, I think one of the opportunities that AUKUS offers, which maybe was not necessarily understood when it was first signed but which is a really critical opportunity now, is the creation of a seamless defence industrial base across the three countries. And in US Congress right now, and indeed in our own Parliament, there is legislation being considered which will create that base and this is something which has been sought for a very long time. And obviously we are very respectful of the processes in the US Congress and they will play out as they play out, but I guess we sit here right now having come back from the US feeling as hopeful and as good about that process as we ever have. At our end, the legislation for our end of that obligation we will be introducing it to the Parliament very shortly and it's through the process of consideration.

In terms of the UK, again, the UK has been our oldest relationship. It's a relationship which is very familiar, which full trust– it’s easy. There's huge people of people links. But I think it's probably fair to say that since the Second World War– pre-the Second World War, there was a huge strategic dimension to it. Since the Second World War, not so much. But with the advent of AUKUS we are now seeing a return to there being a very significant strategic dimension to the relationship with the United Kingdom. We're going to be building submarines together. And so, you know, it doesn't get closer than that. But it's not just that. We're looking at Britain being much more focused on the Indo-Pacific in understanding it as key to its long-term national interest and prosperity. The fact that we've got Anne-Marie Trevelyan at this conference, UK Minister of State for the Indo-Pacific. And I made the joke this morning that Anne-Marie has been here so many times where the process of offering citizenship. But there's some truth in the fact that you see Anne-Marie here all the time and it is about the fact that Britain really is imagining that this is a critical and vital place to its national interest. So you've got AUKUS, but you've got the fact that Britain has now become part of the Trans-Pacific Partnership, whether I'm out of date now in terms of its contemporary name, but the TPP. The work they're doing with Japan, the collaboration of the sixth generation fighter. All of this adds up to a focus on this part of the world which I think is really–I mean it's very interesting to [inaudible]. And so there’s huge opportunism for Australia in that, there are huge strategic advantages in that, which is why it’s really important we are building those relationships with the UK and the US. Not just them obviously, but importantly in those two countries.

VICE ADMIRAL HAMMOND: We're almost out of time, so with your indulgence I'll give you a choice between two questions, and you can choose to answer them both. Number one, you chose this role, and it's very rare in Australian politics that a minister who is the Deputy Prime Minister of our nation would choose the Defence portfolio, why? The second question is, understandably, there's a lot of interest in the surface combatant review, and we’d be interested in what you could share with respect to your thinking around why we did an independent analysis and what that might mean?

MARLES: Well, let me do the second one first. As I said at the start, the last significant tasking of the Australian Defence Force was really back in say 1987 and the 87 white paper which emanated out of the Dibb Review, which was done in 85-86. And that work really kind of set the strategic conception of what we're trying to do with our Defence Force and served us very well over the period of what was deemed the height of the Cold War, but it served us through the Cold War and through the post-Cold War period. And the fact that it lasted 35 plus years speaks to enduring nature of that work. I actually ran into Kim Beazley today, who was the Defence Minister at the time. But clearly, the world that we are living in now is very, very different. And it is asking very different questions of our nation and therefore different questions of our strategic posture. Now, to be fair to the former government, the Defence Strategic Update, which was undertaken in 2020 observed the fact that the world had changed very significantly. I guess the question which was then left begging is so what are we going to do about that? How do we then change? So in coming to government in May of last year, that was really the kind of scene setter we knew from kind of a foundational point of view, from a first principles point of view, to be thinking about – what is the job of our Defence Force in the context of the very complex strategic landscape that we now face. When we are seeing great power contests within our region, where we are probably more relevant to that great power contest than we've ever been to any great power contests, where, how it all plays out, in a sense the outcome of it is uncertain. And so, we have really attempted to start by doing the thinking. Now, again to put that in some context, Dibb starts his work in 1985, but it’s not until 1987 that it's kind of articulated as a statement of government, in the 1987 white paper. Now we've been in power for 17 months. So in that context, given what we are trying to do, we haven't spent much, this has all happened pretty quickly, but we don't have a lot of time to waste here. So we need to get our thinking right. That's the at the heart of the Defence Strategic Review process, of course, knowing that we inherited a process that was already underway in relation to Australia acquiring a nuclear-powered submarine capability and that needed to be taken from a thought to flesh it out as a proposition. And so all of that that was happening. The surface fleet, next to submarines is kind of the biggest moving part with the greatest expenditure and we really felt that you could have incorporated that into the DSR but, you know, we wanted to take the time, not actually that much time, but the time to make sure that we got it right and we thought it merited that you kind of separate it out and give it its own process. Again, not one that goes for years but one that goes for a few months so that we take the time get our thinking right but with relatively due haste and that's what we've sought to do. And we've now received that report in September, we've given ourselves really, you know, three, four months to respond to that which again, in the great scheme of things, it's all happening pretty quickly. But we want to make sure we get it right. You rush this thinking process and you get the big calls wrong. And you are paying for them in a very large way for decades to come. So that's at the heart of what we're doing. Obviously, you know, a number of programs you don't start from a completely blank space. Obviously we've inherited a whole range of programs; the Hunter program, the Offshore Patrol vessels and the like. So you know, we need to build into this what we have inherited and where we should now go. I mean, I have read the Service Fleet Review and I guess what I would say to people is it is a really impressive piece of work, it is a compelling thesis. I couldn't be more happy with it. There are a lot of decisions that flow from it and they’re hard. The money for Defence, money for any part of government is hard won. It should be hard won you know like we are talking about taxpayers money here. So we need to make sure that we are out there, we get the decisions right and we properly fund what we say we're going to do. And all of that obviously will form part of the announcement that we make in the first part of next year. But as I said this morning, the culmination of that, the DSR, the decisions we've taken around the means by which we acquire our nuclear-powered submarine capability, all of that is going to define the Royal Australian Navy for the first half of this century and that's a very big thing.

To answer your first question, I was always interested in coming to government in matters international. In the Rudd-Gillard government I was a junior member of the minister, I was a Parliamentary Secretary for Pacific Island Affairs and then the Parliamentary Secretary for Foreign Affairs. I spent three years in foreign affairs doing that junior role, I loved it. You know, my work in the Pacific until what I'm doing now is really the great professional experience of my life. As people who know me know that once we get onto the topic of Pacific, sit back, buckle up because this can go for hours. I fell in love with the Pacific and feel very honoured and privileged to have had the priority of the Pacific and to have tried to do what I can, and it is for others to judge, but to help shape Australia's place in the Pacific. In 2016 I became the Shadow Minister for Defence and it was the kind of an intriguing proposition for me. When you're in foreign affairs you get, it’s not Defence but perhaps you have a front row seat of Defence, but I did not expect to fall in love with it in the way that I have and really I did. You know, it was the issues, obviously the international dimensions, but it's bigger than that. It is making the strategic choices about what we can fundamentally do as a country. There's a whole industry component to this but we're talking about really significant industry and high-tech industry, the employment of 1000s of people. But more than any of that, the thing that had me falling in love with it the most was the people that I got to meet. Now I'm not exactly sure what I had in my head as the stereotype of a General or an Air Marshal, or an Admiral, but maybe I thought that people would be efficient and think in straight lines and the like. To be honest, the people are very efficient. But they are also creative, empathetic, sensitive. I wasn't expecting that. Whatever else our Defence Force does, the way in which it chooses its senior leaders is really impressive. I mean, there are great people there. And that I think more than anything was, you know, what attracted me to this. And when we were coming into government and the way our system works on the Labor side is that the deputy leader gets the opportunity, one the privilege of being the deputy, but the portfolio portfolios are allocated by the Prime Minister, but the one privilege that comes with being the deputy is you get to choose your own portfolio which was easy. The first thing I did was when we knew we were over the line was to ring Anthony and say Defence is definitely what I want to do. I feel like I pinch myself every day that I'm really doing this job. I'm kind of waiting for the security officers to come into my office and say I'm “sorry sir there’s been a terrible mistake, it's time to go”. That's probably going to happen tomorrow. But I've got to make the most of this because it is a rare opportunity and it's working with the likes of yourself and others, as well as those in the Department. The decision to wear a nation's uniform and what goes with that, which is actually a willingness to put everything and one's life on the line, kind of drives a very unusual and special workplace and special commitment to the way in which people are living their lives. And to be able rub my shoulders up against yours, well that’s fantastic.

VICE ADMIRAL HAMMOND: Deputy Prime Minister, thank you very much. You've been very, very generous. We appreciate your honesty and your commitment to service of our nation. Thank you.


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