Television Interview, Sky News Politics Now

SUBJECTS: National Defence Strategy; Defence budget; AUKUS; Geelong refinery fire impact.

TOM CONNELL, HOST: A short time ago, I spoke to Defence Industry Minister Pat Conroy. 

PAT CONROY, MINISTER FOR DEFENCE INDUSTRY: The biggest one is there’s an element of payment through the Department of Veterans’ Affairs that we had traditionally not used in the measurements, but NATO does. The important thing is that we're not publishing the NDS on that figure. We’re focused on the dollar resourcing increase. With this and the 24 NDS increase, we’ve increased the Defence budget by $117 billion compared to the trajectory we inherited from the last government, $30 billion over the forward estimates. They’re the figures that demonstrate our commitment to national security and the defence of the nation. The NATO measurement is if people are seeking an international comparison, you should compare apples with apples rather than apples with oranges. 

CONNELL: Yeah, but the NATO element does allow different things to be put in. So you mentioned essentially, defence pensions, if you like. Are there any other big items that are included in that now? 

CONROY: Funding from Defence to other organisations for Defence purposes. So if we provide money – 

CONNELL: Like for BOM, for weather – 

CONROY: So, Australian Naval Infrastructure would be an example where we’re funding a separate government business enterprise to do an activity. That will be captured under the NATO measurement. Sometimes we fund other agencies, parts of the national intelligence sort of organisations, some of those do things on behalf of Defence. So, that funding, once it leaves the Defence budget, normally isn’t counted, but under the NATO measurement, you should count it to allow a fair international comparison. But your viewers should be assured that the $117 billion increase is money directly going to Defence to fund the defence of the nation. 

CONNELL: Okay. And so there’s obviously the aspect of the US and it telling people to pull their weight. How is this going to go down, do you think? Is it that they want three and a half now, maybe? Will you tell them, “We’re on a journey. It’s gone up. It’ll probably go up again in the future”? Because it’s not like the security setting is getting any better for us, is it? 

CONROY: Well, our government has got a consistent track record of increasing the Defence budget at every single opportunity, reflecting the strategic circumstances. We’re briefing our allies and partners about the National Defence Strategy. We – they understand that we’re increasing our Defence budget. President Trump was quite positive about where our Defence budget was when he had his meeting in the White House with Prime Minister Albanese late last year. 

CONNELL: Okay. The bet on AUKUS, though, it has to feel as though it’s a little bit shakier, right now, doesn’t it, with President Trump and everything he’s doing? I mean, it’s pretty hard to have full confidence that that will just roll out smoothly. 

CONROY: Well, I’ve got confidence in AUKUS because we’ve been hitting every milestone. Every milestone in the project, both here and internationally, has been hit. And, importantly, all three countries have seen changes of government, changes of political parties running the governments, and at each time the new government has recommitted to AUKUS because it’s in the national interest of all three countries. So I do have confidence in it. 

CONNELL: It’s a huge part of our future strategy, isn’t it? 

CONROY: It is. 

CONNELL: A lot relies on it. 

CONROY: It’s a critical part of it. It is, to use the nomenclature, the apex predator of the oceans. It’s a key deterrent that we’re seeking to require for the Royal Australian Navy. It complements what we’re doing with missiles and missile defence. We’re doubling the surface fleet. So it’s a critical part. But it’s not the only part. But it is well and truly worth the investment. 

CONNELL: Project C-1905 or 1-9-0-5 – I’ve probably done the numbers the wrong way around or however you pronounce them – not going ahead. Somine hunter capability has been reduced significantly. You know there’s plans for autonomous capability, but it’s not there yet. That’s a gap, isn’t it? 

CONROY: No, we’re not reducing investment. We’re funding it – we’re putting investment where it can have the biggest impact, and that’s with uncrewed mine clearing – 

CONNELL: But they’re not ready while the decommissioning is happening – 

CONROY: Well, no, I don’t think that’s quite accurate. 

CONNELL: Okay. 

CONROY: We’ve got autonomous capability that is being developed right now that provides some of those abilities. We’ve been very clear in the National Defence Strategy that we think the future of mine clearing is uncrewed platforms. 

CONNELL: Right, but is there a gap there between the decommissioning and everything ready on the uncrewed – 

CONROY: I haven’t received advice that there’s a gap that you’re alluding to. We take the advice of the Australian Defence Force and the brave soldiers, sailors and aviators, and they’ve been very emphatic with us that the future of mine clearing is autonomous systems, and that’s why we’re investing in them. And the Integrated Investment Program - $425 billion Integrated Investment Program – reflects that commitment. 

CONNELL: Is the buying up and increasing stockpiling of missiles only going to get more expensive now around the world? I know we produce some, but we’re still going to buy some from overseas? 

CONROY: Well, there’s no doubt that there’s a global demand for munitions. The war in Ukraine was the biggest driver of that. The conflict in Iran is adding to that. 

CONNELL: Is it putting prices up or future prices up yet? 

CONROY: Well, we’ll see whether prices increase for certain stocks from the United States when they come through. But what I say to people is that if you don’t want to be at the end of the queue, you’ve got to build your own. And that’s what we’re doing. That’s why we’ve more than doubled funding for the Guide Weapons and Explosive Ordnance Enterprise in this National Defence Strategy. That’s why we’ve opened one factory, opening a second next year, opening a third at the end of the decade – to produce our own missiles. The first missile made in this country in over 50 years was successfully test-fired last week at Woomera, and you can see more developments in the future on that. 

CONNELL: Okay. The oil refinery that had this fire in Geelong, it seems to be an innocent reason, so we’re being told, not sabotage. Is it because it had to go at, you know, full tilt? Is that part of the reason for this? Obviously, trying to produce as much petrol as possible? 

CONROY: Well, first of all, I want to thank the firies and the other emergency personnel involved in dealing with the fire. I’m very grateful that they there were no injuries and everyone is safe. Look, I can’t speculate on the causes of the fire. There’ll be a full investigation. But VIVA assured us that the damage was restricted to their petrol refining line, and they believe that that can be adequately replaced with imports. Thankfully, they’re still producing diesel and aviation jet fuel, which is obviously very critical. So we’ve also – 

CONNELL: But petrol is offline effectively. Do you have any sort of time frame on how long and whether the gap can be filled? 

CONROY: I don’t have visibility of that at the moment. But VIVA are expressing confidence that they can fill that with imported stocks of petrol. 

CONNELL: Okay. 

CONROY: Historically, we’ve imported more diesel than petrol, so diesel is obviously very sensitive at the moment. And that’s why – 

CONNELL: Diesel would have been a worse result than petrol basically? 

CONROY: Yes, I think that’s the logic there. Obviously, we’ve secured two shiploads of diesel through the Export Finance Australia mechanism today. So that’s great news. I think it’s about 100 million litres of diesel. I don’t quite know the exact figure, but I think it’s a very significant amount of diesel, which is good news. 

CONNELL: Are we – is the government actively looking at more refinery capability, or is that seen as too expensive? 

CONROY: Well, we’re looking at how to increase our energy independence. And I’m not going to get ahead of the Budget and other things in that, but energy independence and fuel security are critical. That’s why in my portfolio of defence we’ve doubled Defence’s stockholdings of fuel over the last couple of years, because we do need to be prudent – 

CONNELL: That’s Defence, though. For the rest of the country, so is refinery capability being looked at? 

CONROY: Well, again, I'm not going to get ahead of decisions made by other parts of government. But fuel -- 

CONNELL: It's not a decision, but it's being considered? 

CONROY: Look, we're examining all ways of increasing our fuel – our energy independence. 

CONNELL: And what about oil? Is that something the government sees a role in?

CONROY: Well, we’ve issued exploration licences over the last couple of years and we’ll see what comes through that. But we’ve been – 

CONNELL: If the government really wanted – you know, if it said, “Let’s get more refineries, let’s get more oil,” it could have a role in it. Is that something it’s looking at to say, “Licences is one thing, but we want more for domestic use”? 

CONROY: Well, I’m not going to get into hypotheticals about what else government can do around oil extraction. We’ve issued the licences. That’s the normal course of government. If the private sector wants to exploit that resource, they go through the normal licence approvals.

CONNELL: So leave it up to companies, markets, et cetera, rather than the hand of government, essentially? 

CONROY: Well, we’ve made a number of interventions to increase full supplies, whether it’s reducing temporarily emission standards – 

CONNELL: They’re temporary measures; I’m talking about, sort of, getting beyond the short term. 

CONROY: Well, we’ve made announcements around investment in fuel. So I know that Jim Chalmers made an announcement a couple of weeks ago around that in terms of increasing fuel production in this country. 

CONNELL: All right. Minister, appreciate your time today. 

CONROY: Thanks, Tom.

ENDS