Television Interview, ABC News - 7:30 Report

SUBJECTS: AUKUS, G7.  

SARAH FERGUSON, HOST: A big story broke in the Financial Times overnight. The Pentagon is undertaking a review of AUKUS, the nuclear-powered submarine and technology deal. The news set the hairs running in Australia with opponents of AUKUS encouraged by the appearance of doubts in the Trump Administration. It follows US Defense Secretary Pete Hegseth telling Australia to increase defence spending by tens of billions of dollars. The Prime Minister is shortly on his way to the G7 in Canada where it's anticipated he'll meet President Donald Trump. Joining me now is Defence Minister and Deputy Prime Minister Richard Marles. Richard Marles, welcome back to 7:30.

RICHARD MARLES, DEPUTY PRIME MINISTER: Good evening, Sarah.

FERGUSON: Now the U.S. under Secretary of Defense Elbridge Colby has called for this review of AUKUS. What's driving this?

MARLES: Well, I think it's pretty natural that a new administration, a new government coming into power seeks to engage in a review of a very significant initiative such as this. It's what the incoming Labour Government in the United Kingdom did. They undertook a review of AUKUS and it reported, in fact, was very favourable about AUKUS and the role that it will play. Really, we did it when we came into power back in 2022, when we undertook the Defence Strategic Review. And whilst that looked at the entirety of our defence posture, clearly AUKUS was a very central component to it. It was a key part of what the Defence Strategic Review looked at and reported upon. And so we welcome this review. We will engage with it, we're confident about the process of it. But we'd also point out that in all the engagements we've had with the Trump Administration, there has been a positive view in relation to AUKUS, and we are confident about its progress under the Trump Administration.

FERGUSON: You can sound as optimistic as you like, but we know that Elbridge Colby has doubts about AUKUS and in particular the ability of the US to produce enough boats to service the US Navy. If those doubts about the capacity of US, the US production line are confirmed, what does this mean? What would that mean for Australia?

MARLES: Well, the challenges in relation to the production and sustainment of Virginia class submarines in America have been well understood from the outset and we've known that when going right back to when the optimal pathway was announced in March of 2023.

FERGUSON: I'm just going to jump in there, Richard Marles, because as you say, these problems have been around for a long time. We've been aware of them for a long time. The US has been aware of them. Now, Elbridge Colby is looking at those details. What's it going to mean if he comes up with a conclusion that says they cannot provide boats to Australia?

MARLES: Well, I mean, the challenges are well known and we are confident about our ability to increase those production rates and those sustainment rates. And sustainment is as important, if not more, than the actual production of the Virginias. But the point I would make is that when you look at the way in which the optimal pathway is structured, you know, right now what we have is Australia making a financial contribution to the industrial base of the United States in respect of both production and sustainment. Right now there's something like 120, 130 Australian tradespeople who are in Pearl Harbour working on putting Virginia class submarines to sea. That's great for us in terms of the training and skills they acquire, but it's really good for the United States. The establishment of the Submarine Rotational Force West, which will occur at HMAS Stirling, south of Perth, is a place from which Virginia class submarines of the United States Navy will operate. But it's also a place where you will see sustainment and maintenance of those submarines occurring. So, when you look at what we are doing with AUKUS, it is all about in these years, in these immediate years, upping that sustainment and production rate and.

FERGUSON: But let me just ask you doing that, hold on one minute there, because what we know that, yes, I take your point about the activity taking place at Stirling, the activity taking place within Admiral Meade's operation. We might come to that in a moment. But the key point is that the production of the Virginia class has never reached two boats a year. And that is what the US Navy needs it to reach, to enable boats to be made available to Australia. So, if that production capacity is not reached, what do you plan to do?

MARLES: Well, we need to get to that point in the early 2030s. That's the time frame. And right now we are confident that we can meet that. And we are seeing real progress, increases in both production and sustainment associated with what we're doing with AUKUS and what the Americans themselves are doing and we're confident that we can get to that point. That's what is set out in the agreement that we already have with the United States, which forms part of the treaty that we now have between the US and the UK. I think it's completely appropriate for this administration to have a look at all of the facts and figures around that. But when you do, the story that it tells is that we are getting those production and sustainment rates up. But what is critically important is that the Australian contribution to that is profoundly significant.

FERGUSON: All right, let's come back to Secretary Hegseth because he said to you at the meeting that you had with him at the Shangri-La Dialogue recently, just a couple of weeks ago, he said to you directly that the US expects Australia to increase defence spending to reach up to $100 billion a year. You said at the time that Australia is up for the conversation. Is Prime Minister Albanese up for the same conversation?

MARLES: Look, we'll engage with the United States in, you know, as our Alliance partner, and of course, we will respectfully engage in all of those conversations. 

FERGUSON: I’m sure but please come back to the question, if you would. If you would, Deputy Prime Minister, for a moment. It's a very direct question. Is the Prime Minister up for a conversation about lifting the defence budget of Australia by tens of billions of dollars a year, as Pete Hegseth, the US Secretary of Defense, asked of you.

MARLES: Well, the point that the Prime Minister has made which is exactly right, is that in terms of how we think about defence spending, that is a function of Australia's national interest. It is a function of the strategic landscape that Australia faces, the strategic threat that Australia faces and the strategic challenge that we are seeking to meet and the way in which we resource the defence force to meet it. And having articulated all of that, the Prime Minister has made completely clear that as national security is a key priority of this government, that resourcing will occur. And that's what has occurred. That is what we've been doing since we've come to office.

FERGUSON: Let me put the question to you. So, I'm just.

MARLES: Hold on.

FERGUSON: I'm just going to put the question to you.

MARLES: Because we've gone through this in a very methodical way and we have increased defence spending to this point in time.

FERGUSON: Well, there's a question about that that was raised by Angus Houston, who co-authored your defence review. He spelled out that AUKUS must be a net addition to Australia's military capability, not draw from it. But let me just ask you a different question about the Prime Minister. Has the Prime Minister tried to get a meeting with President Trump in Washington?

MARLES: Well, I'm not about to go through all of the engagements and the communications which happen between the Prime Minister and the President. I mean, I expect in at some point in the near term, the Prime Minister and the President will meet. And when they do, no doubt they'll talk about all the issues that exist across our relationship, both in terms of national security and our economic relationship as well. But what he has said in terms of the question of defence spending is really clear. We will resource the needs of the nation. And that is what we have been doing as a government since we came to power with the single biggest peacetime increase in defence spending in Australia's history.

FERGUSON: But still way below what the Americans are asking of you and presumably what President Trump would ask of the Prime Minister were they to meet either on the sidelines of the G7 or in Washington.

MARLES: Well, again, we will have the conversation with the United States. I mean, we will obviously respectfully do that with our Alliance partner, but we will fund defence based on Australia's national interest. That's the very clear point that the Prime Minister has made and that what it's about is not a specific number. It is about capability, working out what we need and funding that capability. And that's what we've been doing since the moment that we came to office back in May of 2022. We obviously inherited a pretty dire circumstance from the former coalition government in terms of both the state of the defence budget and the state of defence capability. We've been in the business of restoring that and lifting defence spending well above where the coalition had it. And we'll continue the process of assessing our needs and resourcing them. And that is the point that the Prime Minister has made abundantly clear.

FERGUSON: Defence Minister, Deputy Prime Minister Richard Marles, thank you very much indeed for joining us.

MARLES: Thanks, Sarah.

ENDS