Podcast Interview, Latika Takes

SUBJECTS: NATO Summit; Australian Defence spending; Australia’s submarine capability.

LATIKA BOURKE: What do you think you achieved coming to NATO?

DEPUTY PRIME MINISTER: Well, this is an event which, on our national calendar, has grown in significance over the last few years. We are watching what's playing out in Europe as being something which influences our region, the Indo-Pacific, and increasingly it's important for us to build relationships and contacts in Europe to understand NATO's thinking, and to build cooperation between our two theatres, because we are certainly watching others cooperate.  

And you know, we have long said that what's on trial in the war in Ukraine is the same global rules-based order by which we live in the Indo-Pacific, and in that sense it very much engages Australia's national interest, and so, you know, as we see the North Atlantic having an impact on the strategic landscape of the Indo-Pacific, it's really important that we are engaging in NATO, and this last couple of days has been had a fantastic opportunity to do that.

LATIKA BOURKE: So everything you say makes such logical sense, but in truth, it looks like the IP4's cooperation with NATO was actually downgraded this year because at leader level only Christopher Luxon of New Zealand turned up, there was no IP4 meeting with the presidents that was originally scheduled and NATO is now no longer planning a liaison office in Tokyo. So all of that looks like major setbacks.

DEPUTY PRIME MINISTER: Look, I wouldn't read too much into the attendance at this meeting of NATO. The logic of--

LATIKA BOURKE: But what do we read into it though?

DEPUTY PRIME MINISTER: Well, I don't think we --

LATIKA BOURKE: If we don't read too much, what are we supposed to read into it?

DEPUTY PRIME MINISTER: Well, I mean I think there are pressures on any leaders in any given moment in time in terms of how, you know, you balance your international commitments, and you know, on occasions that means that leaders can't do everything in terms of attending meetings that they might otherwise want to, and so I don't think it means anything more than that.

I think you need to look at these things over the broad sweep of time. The Prime Minister, our Prime Minister has attended two of these meetings, I have now attended two. I think as you look forward, this is going to be, as I said, a meeting which is of increasing importance to us in Australia relative to where we were at, you know, five, 10 years ago, and that is because of the way in which our two theatres, our two regions are growing increasingly connected.

And of course, you know, we talk about the geography of our theatres, and that's clearly relevant, but once you start cooperating you realise there's a whole lot of domains where geography is not relevant at all; cyber is the most obvious example of that. But even in space geography is relevant, but it has a different dimension to it. In some ways our geographies are common entry when it comes to space.

So there are lots of areas where it is really important that we are cooperating, and you know, there is a huge appetite on our part to engage in that cooperation as there is amongst NATO countries, and again, I think what that means is that you will see this as a meeting which continues to be of growing importance to Australia.

LATIKA BOURKE: You didn't get to meet any of your US counterparts, did you?

DEPUTY PRIME MINISTER: I didn't, but you know, I mean in terms of my US counterpart, Pete Hegseth, I literally met him just a few weeks ago in Singapore, but in this role, the US Secretary of Defence is literally the counterpart who I deal with the most, and so I've got no doubt that I'll be catching up with him in the not-too-distant future.

LATIKA BOURKE: I think why that's critical is because since you saw him at Shangri-La, he came out and announced that he'd asked you to raise defence spending to 3.5 per cent. It's currently projected to reach 2.3 per cent of GDP in the early 2030s, and he also commissioned a review into AUKUS. Wasn't it imperative that you try and get a meeting with him here to ask if our submarines are safe?

DEPUTY PRIME MINISTER: Well, we've been in dialogue around AUKUS, and that dialogue has been very positive. As I've said before, we've known about the review for some time; it wasn't a surprise. Obviously, we haven't spoken about it because it's a matter for America to announce.

LATIKA BOURKE: How long did you know about it though?

DEPUTY PRIME MINISTER: Well, we've known about it for some time, and --

LATIKA BOURKE: Like weeks, months, or?

DEPUTY PRIME MINISTER: We've known about it for some time, and I'm not going to go further than that, but I literally met Pete Hegseth just a few weeks ago, so you know, we've been able to talk about the way in which AUKUS is progressing, we're optimistic about how that's going forward.

As I said in relation to the review, when we came to government, we had a review of our strategic posture, our defence posture, and that very much included AUKUS. When the UK Government came to power, they did exactly the same thing. It's a pretty natural step for an incoming government to review a defence initiative as significant as this, and we will engage with the US as they proceed with this review, and you know, we are very positive about how we're going to be managing our security relationship with the United States, and that includes AUKUS.

LATIKA BOURKE: So can you hand on heart say we'll get those submarines transferred to us in the early 2030s as is scheduled?

DEPUTY PRIME MINISTER: Well, we have a treaty agreement with the United States, it underpins the Optimal Pathway that we agreed in March of 2023, it articulates a shared challenge to increase the production and sustainment rates for the United States Navy of their Virginia-class submarines. We are in the process of doing exactly that.

Part of that is the financial commitments that we're making to the US industrial base, we've begun that process. Part of that is seeing Australians trained on that industrial base, and right now there's 120, 130 Australian tradespeople who are in Pearl Harbor working on getting US Virginia-class submarines out to sea. And so we actually --

LATIKA BOURKE: Does it guarantee us delivery?

DEPUTY PRIME MINISTER: Well, look --

LATIKA BOURKE: Does it guarantee us delivery of those submarines?

DEPUTY PRIME MINISTER: Well, the agreement is in place, the agreement as has been articulated is in place, and we are all working together to see those production rates increase, to see that the space is there for Australia to acquire the Virginia-class submarines in the early 2030s, and I'm very confident that all of that is what will transpire.

LATIKA BOURKE: Do we get the money back if we don't get the submarines?

DEPUTY PRIME MINISTER: Well, look, we are working on the pathway to getting those production rates up and to having Australia acquire those submarines in the early 2030s; that's what we're all seeking to achieve and that's what I'm confident that we will achieve, and you know, it is a really important agreement which effectively closes a capability gap that we inherited when we came to government, and you know, we are all working at a pace, and when I say that, the United Kingdom, the United States and ourselves, to achieving that outcome, and that's, you know, one really important step along the Optimal Pathway, but it's not the only step.

Having the Submarine Rotation Force - West up and running in the next couple of years is a critical component of the Optimal Pathway as is putting in place the production facility at Osborne in South Australia to build the SSN-AUKUS submarines which will come, which we'll see the first roll off the production line in the early 2040s. You know, we're working on all of those to meet the timelines, and to see that happen.

This is a huge project, and you know, what it actually requires is all of us, which we all are, to commit to it and to meet every step, and that's in fact what all three countries are doing.

LATIKA BOURKE: It's not totally reassuring; those answers you've given on two pretty critical questions. But nevertheless, if AUKUS is progressing and you're optimistic about it, can you tell me one thing that Pillar II has delivered?

DEPUTY PRIME MINISTER: Well, Pillar II, what we have seen is a raft of legislation in the United States, in Australia, and complementary measures taken in the United Kingdom, which has put in place a seamless defence industrial base between our three countries, reducing barriers in terms of our defence industry that have been in place for a really long period of time, which in turn is now enabling a level of cooperation between our three countries in terms of production, but the sharing of technology and information and innovation, which is actually seeing real capability being developed. Now, a lot of that we can't talk --

LATIKA BOURKE: But have we had anything as a result? AUKUS has been in place for quite some time now.

DEPUTY PRIME MINISTER: Well, we have, but I mean in terms of - by nature of the technologies that we are talking about, there's technologies that we, you know, we can't put into the public domain, but that is absolutely happening.

And you know, both in terms of Pillar I and Pillar II there has been an enormous focus of effort across all three countries, and actually, you know, when you look at the progress that has been made, it is profound, and it's why, you know, this is regarded by I think all of us as an arrangement between our three countries which is very much in the strategic interests of all of us.

LATIKA BOURKE: But it's so profound, we still can't name one deliverable.

DEPUTY PRIME MINISTER: But it's not --

LATIKA BOURKE: Would it help --

DEPUTY PRIME MINISTER: No, but to be clear, Latika, that's not - it's not being able to talk about it publicly, and so it's not fair to suggest that in the answer that I've given there's nothing that's happened. The fact of the matter is we're talking about innovative technologies which are not able to be discussed in the public domain.

But what I am saying is that that has absolutely occurred, that there has been whole lot of really important cooperation and development of technology.

LATIKA BOURKE: Do you think it would help if we just bit the bullet and agreed to announce a higher defence spending target? I mean I just came back from the press conference with President Trump, he is lauding this Hague Agreement as something that he has done and helped shore up Europe's long-term security.

In the Indo-Pacific, we face a very stark threat as well. Would it not be wise for us to avert the same problem that Europe has had with the United States, bringing NATO to the brink? Would it not be better for us to raise our defence spending, as they have asked you several times now privately and now publicly, and avoid what Europe has had to go through?

DEPUTY PRIME MINISTER: Well, I mean in terms of our defence spending, we have increased our defence spending. I mean it is the biggest peacetime increase in defence spending in our country's history.

LATIKA BOURKE: But it's still not enough, and that's the problem. It's not enough for the Americans, and it's also not enough, according to your own review, to meet the capabilities that we need.

DEPUTY PRIME MINISTER: Well, what we have done in the Defence Strategic Review is to assess our strategic landscape, to work out what is our strategic threat and the Defence Force we need to build in order to meet that threat, meet that challenge, and that's exactly what we're doing, and we are in fact funding that, and what that has given rise to is the biggest peacetime increase in defence spending in Australia's history, and that is a story which is understood around the world, and actually is a really important story to tell around the world.

I mean, we will continue to go through the process of assessing our strategic circumstances, what comes out of the Defence Strategic Review, is a process of iteratively doing that every two years with the National Defence Strategy, and that will occur again next year, and every two years thereafter.

And so, you know, we have a process in place to assess what our strategic circumstances are and our needs are and then to resource them, and as the Prime Minister has said, that's the process that we will apply, and that's what we will do to meet our own national interest.

And we'll continue to, you know, respectfully engage in conversations with our allied partners to look at what's happening in the world, but at the end of the day what we'll do, which is what every country does, is to assess its strategic circumstances to work out what it needs and then to make the decision to resource it, and in fact that's what we have been doing and will continue to do.

LATIKA BOURKE: So a couple of years ago, I interviewed to be the head of the RAAF, Rob Chipman, and he told me in that interview when I asked if we were capable of defending our northern bases, he said bluntly, "no". I was struck by his language. Do you think the situation has changed in that time? Are we capable today of defending our northern bases if they had to be?

DEPUTY PRIME MINISTER: Well, I think what we're doing is building our capability and very much building our northern bases' capability, and building a Defence Force which has the capacity to engage in the kind of projection that is what we need to do in order to give pause for thought for any adversary which might seek to coerce us, on the one hand, and to provide for our contribution to the collective security of the region in which we live on the other.

And we are very much working to achieve that outcome, and you know, I think we have agency in doing that, and I have a sense of confidence that we are meeting that challenge.

LATIKA BOURKE: So do you think that the world is more or less dangerous since you became the Defence Minister?

DEPUTY PRIME MINISTER: Well, I certainly - we've articulated that we live in the most complex strategic circumstances since the end of the Second World War, they certainly haven't become simpler since we came to office in 2022, and I think you can see that around the world, and you know, that is why we continue to assess our circumstances, work out what our needs are and to resource those needs.

And I think a really important part of the Defence Strategic Review process was to in a sense engage in a constant iterative updating of our strategic landscape given how rapidly that is changing, and what we used to have was, you know, periodic Defence White Papers which could happen in any kind of given period of time; now we are on a two-year drum beat where we constantly are reassessing what our circumstances are and making sure that we are putting in place the decisions to resource what we need to, and you know, and I think that's turned out to be a very important process give where the world is going.

LATIKA BOURKE: Okay. Final question, because I know you have to board a flight, and I'm very grateful for your time. The US has said in several readouts following your meetings with Secretary Hegseth, that they are looking to accelerate force postures in Australia. I take that to mean that's an increase of US presence in Australia. Is that correct? What would that look like, what does that mean, and do you think that the Australian public is actually supportive of more US Military presence in Australia in the context we're in given all the threats we see about China potentially preparing for a move on Taiwan by 2027, as Secretary Hegseth said? Do you want and support an accelerated force posture in Australia, and what would it look like?

DEPUTY PRIME MINISTER: Well, obviously none of this is new. I mean we've been working since we've come to government with the former US Administration and now the current US Administration on US force posture in Australia, and it will grow. That's not news. We've been articulating that over the last few years.

We've seen the Marine rotation in Darwin grow, but of course what we will see, and this will be the most significant step, is the establishment of the Submarine Rotation Force - West, which is part of the pathway to Australia acquiring a nuclear-powered capability, and that, you know, is due to happen in a couple of years, and again that will see a significant increase in US force posture in Australia.

I think, you know, in answer to your question, I think the Australian public do welcome this; it's important that we are very clear with the Australian public about why, and that's why we have really tried, actually I think in an unprecedented way, to articulate both the strategic landscape but also the strategic challenge and the kind of Defence Force that we're trying to build and the kind of relationships that we are trying to establish which underpin that, and central to that obviously is the alliance relationship.

It's why we have been really clear about what sovereignty arrangements are in place in respect of any foreign countries' presence in Australia, and that goes to, you know, the principles of full knowledge and concurrence, but making sure that those principles are updated for the precise force postures that we are seeing.  

Of course it's not - I mean it is the United States, but it is not just the United States. We are seeing Singapore, for example, increase its presence in Australia, we last November announced with Japan that their Amphibious Rapid Deployment Group would do training in the north, where we can, with the US Marines and with the Australian Defence Force.

So you know, and I think all of these measures are really important in terms of strengthening our relationships and our capabilities and our interoperability, and you know, we do all of that with very clear sovereignty arrangements in place, which I've articulated to the Parliament, and I think that does, you know, create the social licence for this to occur.

But I mean it is a - these relationships are a really important part of what we are doing in terms of meeting the strategic circumstances that we face.

LATIKA BOURKE: And would that - just to clarify, are you talking about growing force posture beyond Stirling, or are you saying that Stirling is the growth, because the readouts that the Pentagon has put out seem to suggest it's above and beyond what we've already agreed, ie, already agreed Stirling.

DEPUTY PRIME MINISTER: Well, I mean you can look at the readouts from -- that we've announced at AUSMIN meetings over the last three years, and it is articulating force posture not just in Stirling, but in really across all the domains, and so there is a growth in that, but again, this is not new, this is a journey that we've been on over the last few years.

LATIKA BOURKE: But do you think it's good for Australia, it makes us safer; do you support this?

DEPUTY PRIME MINISTER: Well, I've been part of negotiating it, so of course, and I very much think it makes Australia safer. It has to be done on the right terms, and we've been very careful to do that, and it's been very thoughtful and carefully managed, but it's really important.

It is building in a very practical way, the expression of the alliance, but it isn't just the alliance between ourselves and the United States, it's actually creating opportunities for our neighbours within the region, and it's really important that we are extending those opportunities to them as well.  

And we've been really clear, not just with the Australian people, but with our friends in the region about why we are doing what we're doing and the opportunities that that does represent for the collective security of our region and for them, and that's something which, you know, they're taking advantage of, and as I say, what we announced with Japan in November of last year is an example of it, the more that we are doing with Singapore is an example of it. These are very important relationships to build.

LATIKA BOURKE: It sounds like you're making Australia a very critical cog in our future security in the region. Is that something that the Americans need to be mindful of as they review AUKUS, that actually, HMAS Stirling is extremely critical to whether or not they successfully contain China?

DEPUTY PRIME MINISTER: Look, I wouldn't describe things in the way in which you have. I think really, what we are seeking to do here is to build capability in Australia, which in turn contributes to balance and stability and ultimately the peace of the regions in which we live; you know, North East Indian Ocean, Northeast Asia, Southeast Asia, the Pacific.

That is actually our objective here. It is about doing everything we can, of course, to avert conflict, to deter conflict, but to contribute to the peace and stability of the regions in which we live. And I think in that sense, you know, obviously we see all of the decisions that we've made as being important to that, but that does include the Submarine Rotation Force - West at HMAS Stirling.

LATIKA BOURKE: Well, on that note, I know you have a plane to catch. Safe flight home, and it was very nice to see you, albeit but very briefly, at the NATO Summit in The Hague.

DEPUTY PRIME MINISTER: Great to see you too, Latika.

ENDS