Television Interview, News 24 Sunday Agenda

SUBJECT/S: Economy; Interest rates; Middle East conflict; AI; US-China Relationship; Defence Estate Audit; Politics

HOST, ANDREW CLENNELL: So, joining me live is the Deputy Prime Minister and Defence Minister Richard Marles. Thanks so much for your time, Richard Marles. I will get onto this important artificial intelligence issue in a moment, but first I do want to ask you about the Reserve Bank decision this week because it seems to me this will send shockwaves through the politics of this country, if we get a rate hike. How much are you fearing this rate hike?

DEPUTY PRIME MINISTER, RICHARD MARLES: Well, good morning, Andrew. And firstly, the last thing I'm about to do is preempt any decision of the Reserve Bank, we don't do that. But we know Australians are hurting and they are doing it tough. We've seen really significant pressure globally over the course of this year with the war in Iran, obviously we've seen that play out at the petrol bowser, but we're also now seeing it in terms of global inflation and that's being experienced in advanced economies around the world. Most advanced economies have experienced a rate rise in the last month. But we, as a result continue to be very focused on costs of living here. And we, we have been up until now, we'll continue to be going forward and be it cheaper medicines, access to health care or putting in place tax cuts, it continues to be a key focus on how we manage the budget and also managing the budget in a prudent way, which gives us the space to do that work.

CLENNELL: Any chance at all you'd consider a petrol excise cut, again?

MARLES: Again, we're not considering that. I mean, what we are focused on is these other cost of living measures and managing the budget in the most prudent way possible, which gives us the space to look at cost of living as we go forward. I mean, cost of living really has been the challenge since we've come to government and it continues to be that. And we're obviously seeing what's playing out around the world and we very much know how difficult it is for Australians to make ends meet. And that's why we are focused on working- supporting them in that household challenge.

CLENNELL: What's your message to Australians who've copped above target inflation for five successive years? Where's the hope ahead that inflation will tail off?

MARLES: Well, we continue to manage the economy in a way in terms of prudently managing the budget to put downward pressure on inflation. And we know Australians have been doing it tough and they've been working hard in the context of this. We've been working with Australians in relation to this. We continue to do that and in what is a difficult international environment which is being experienced around the world, as hard as it is, you know, our economy and our budget is better placed than almost any in the world to deal with this. We just need to keep working at this, to see this through, and there will be light at the end of the tunnel. But right now, you know, what we're facing is an internationally inflationary environment, essentially stemming out of the conflict in the Middle East. And that's what we are seeking to manage.

CLENNELL: Where's the light? When's the light?

MARLES: Well, I mean, what we've got is a budget and an economy with less debt than almost any country in the world. That places us in a good position to manage this. We're still seeing our economy grow faster than almost any country in the developed world. We have unemployment on average at the lowest that it's been in half a century. So, you know, there are a range of ways in which the economy is actually expressing that. But not for a moment are we suggesting that people are doing it anything other than tough. And we continue to manage the economy in a way which gives us space to try and put in place cost of living measures as we have in terms of tax cuts, access to health care. We just need to keep doing this until- 

CLENNELL: Michele Bullock says. Michele, sorry, Deputy Prime Minister. Michele Bullock says unemployment has to go up for inflation to come down. Do you concede that?

MARLES: Well, we've been managing the economy in a way to have low unemployment and that continues to be how we are managing the economy. And we've seen, you know, an enormous amount of jobs, and it's a million and a half jobs created under this government. And so, you know, that's our focus in terms of how we are managing the economy as a government, and we continue to do that. Look, I mean, at the end of the day, we are facing a challenging international environment. There is no hiding that. I mean, the war in Iran and what that's done in terms of disruption of global fuel supply chains has not only had an impact on the price of fuel and indeed the flow of fuel around the world, but that's clearly now flowing into more broader effects in terms of global inflation. We have faced that challenge, first of all by making sure that we've got fuel in Australia, we've got more fuel in Australia today than we had at the start of the conflict, but we've also been managing that in terms of how we manage the broader impact on the economy. And we continue to do that. But Australians are doing it tough. And we will work with Australians to get through this.

CLENNELL: Have you had any sign from your US Counterparts there might be a resolution of the war soon? Have you or the PM had any sign of it?

MARLES: I mean, the answer to that question is obviously, I was in the United States a few weeks ago, as you know- 

CLENNELL: Yes. 

MARLES: -Met with the Vice President and met with the Secretary of War. Clearly, we spoke about this, but I'm not about to speculate on how the progress of the war continues. Ultimately, that is a matter for the United States and Iran, I suppose, in that sense. But I'm not about to speculate on that. What I know, though, is that this is the situation that we find ourselves in now in terms of the Strait of Hormuz not having much traffic go through it. And so there is a disruption to the global fuel supply chain as a result, and we need to manage things accordingly.

CLENNELL: Did Hegseth and Vance indicate to you, though, that they want an end to the war? They're trying.

MARLES: I mean, clearly the United States wants to see an end to the conflict. I mean, that's, that's to state the obvious, but, you know, they are seeking to, to manage that through. But, I mean, that's a matter for them and I'm not going to give you a commentary on that. Others can do that. What is clear is that the global fuel supply chain is disrupted and that is having an impact on the global economy, and that's what's now being experienced. And, and that's what we are seeking to manage in terms of the way we manage the economy and the budget at home.

CLENNELL: Do you think it was a bit jarring to see the Prime Minister accept an award in New York in black tie while cost of living is such a big issue back home?

MARLES: Look, the Prime Minister accepted an award about the way in which we are managing our place in the world and specifically our place in the region in terms of the alliances that we've struck with countries around Australia, such as Papua New Guinea and Fiji. The way in which we are pursuing the AUKUS arrangements, which are building Australian capability in what is a very challenging world. I mean, it really matters that we are doing that. And I think the recognition of the Prime Minister is deserved in respect of him, but it's also a recognition of what his government has been doing to make sure that we are keeping Australians safe in a very challenging global environment. And that's what we are seeking to do here. There's a lot going on in the world and the economic circumstances are part of that. But there's also the very challenging geostrategic circumstances, and we are seeking to manage those as well. And what we have done in establishing those alliances, what we are doing in pursuing AUKUS, is critically important in terms of putting Australia in the best possible position to meet these challenging circumstances.

CLENNELL: Let's talk to this AI hack, if you want to call it that, or infringement or whatever it was. Did the PM hype this up to bolster his trip?

MARLES: No, and I heard your intro. We've tried to be as plain as we can be about this. This is a very serious incident, and I said that on Thursday, and the Prime Minister said that as well. This is an AI agent, non-human, acting in an unintended way, gaining unauthorised access to an Australian government website. It is also true that the impact of that specific incident is relatively minor, which again, is a point that I made on Thursday. So, this is very serious and we are treating it as such, that's why we've established the task force. That's why we are working very closely with OpenAI right now to understand every step, if you like, that the AI agents took in all of their interactions in this incident with Australian websites, Australian government websites. But it is clear that the impact, the actual impact of this is relatively minor in what has been-

CLENNELL: So, your position, what has been your position, Deputy Prime Minister, is this is serious but minor.

MARLES: Well, I hope you understand the nuance of what I'm trying to say-

CLENNELL: Fair bit of nuance there.

MARLES: So, you can try and conflate it in that way, Andrew, but it is trying to actually explain this to people. The fact that we've got an artificial intelligence agent gaining unauthorised access to an Australian government website, that of itself is very serious. There's no hiding that. I mean, what, you know, this is the first time this has happened in the context of Australia, and so we're not shying away from that. In fact, what the information that it obtained was, was minor in its nature, in as much as that information we've now made public anyway- it wasn't anyone's personal data. But in a sense, the seriousness doesn't lie in the information that was obtained. It was the fact that we've got an unintended action of an AI agent gaining unauthorised access into an Australian government website. So, both of those things are true. And you highlighted that in your opening. And it's important for people to understand that we're not trying to alarm people that, that there's been a serious breach which has had significant consequences in the data that's been released, that the impact actually is minor. But, but the fact that there is an artificial intelligence agent here, in an unauthorised way, getting access to an Australian website, well, that of itself is serious and we've acknowledged that from the outset.

CLENNELL: What is Australia going to do about this threat going forward? Because feels like there's going to be a lot more malicious actors than poor old OpenAI. I mean, can we reach agreement with the US to try and get some of their protections into our web systems?

MARLES: Well, I mean, I think there's a lot to unpack in what you've said. I mean, firstly, I think Australians should have confidence that in terms of the agencies that we have, you know, Australian Signals Directorate being front and centre amongst them, they are in terms of what they do amongst the leading organisations in the world, when they really are. And the world looks to ASD in terms of its, its capability. And ASD is really the custodian of making sure that we have proper security across the information that's held by the Australian government. As I said on Thursday, the information in respect of this medical statistics portal of Services Australia is not particularly sensitive information, if you like, surrounding that was a fence that the AI agent climbed. If you're talking about people's personal data, to continue the analogy, we keep that in a safe and the kind of national security- really sensitive information- that we have as a nation, we keep inside a fortress. So, when you look at that sort of data that we hold in a secure way, we are confident about the security that we have around that- it is getting attention and is being probed constantly, but that security is being able to be maintained. And we've got really high powered organisations monitoring all of that and being a custodian of that in the form of ASD. More generally. I think what we take from this, and this is why it's a serious incident and why we need to see this as a significant warning. We need to be engaging here. I mean, this technology is coming. There is no putting your head in the sand. And the more we engage with it, the more we have agency and respect of it. This is a moment to seek to lead the world and to be there to try and shape the technology as best we can. Not to hide from it, because there is no hiding from it. And so we do that. We are working with the frontier companies, we have good relationships with them actually, which has turned out to be quite important here in terms of the way in which we are working with OpenAI. And to be clear about this, what has happened here with OpenAI's agents is completely unacceptable. And we've made that very plain to Sam Altman- the Prime Minister did that when he spoke to him personally. But we are grateful for being able to work closely with OpenAI to understand exactly what's happened here. And these, these relationships are really important, so engagement here matters.

CLENNELL: You recently visited San Francisco and met tech bosses and sold that the Australian government wants AI here as part of our national security world. What did you say to them? And did they talk about the dangers of AI going forward in any of these meetings? Did you meet anyone from OpenAI then?

MARLES: Well, I did. I met with OpenAI, I met with Sam Altman then. And that was at the beginning of this month. Again, it comes back to what I've just said. I mean, we want to engage. We want to engage. There is a, a very important economic opportunity. I think this is really important for our Social Security-

CLENNELL: Just. Sorry. You met Sam Altman at the beginning of this month, Is that what you just said?

MARLES: I did. And we made that public, its not news, we made it public back then. 

CLENNELL: Did they know about the incident then, do you think?

MARLES: Well, we didn't speak about the incident. And this was before there had been a notification to the Australian government in any form of the incident. I mean, to go through that timeline again, we were notified by an email on- when I say ‘we’, I mean Services Australia on the 10th of September. Again, we've made it clear to OpenAI that the time-

CLENNELL: Do you think he would have known when he met you?

MARLES: I can’t speculate on that.

CLENNELL: Is it possible?

MARLES: I literally- I don't know the answer to that question and I'm not about to speculate in respect to that. But, but what I'm saying here is that we met before there was any notification to the Australian government in any form of what happened here. And we have raised with OpenAI our concern about the fact we were not notified earlier. And indeed, in the form in which we were notified- 

CLENNELL: Did any of your discussions with Mr. Altman go into these sort of risks or dangers? And did you get any reassurance on that?

MARLES: Look, I'm not going to go through every detail of that meeting or the meetings that we had with other companies. But we have spoken with other companies about the way- and with OpenAI about the way this technology is being developed. And they themselves have been very public about this in any, in any respect. And that goes to the question that there are definitely risks associated with this technology. What matters here is that the safeguards, if you like, the guardrails that are being built around the technology are in advance of the building of the capability itself. And that is a point that has been made by the tech companies. It's certainly one that we support. It's literally at the heart of what the Prime Minister was saying when he was in New York during the course of the last week. If you look at Dario Amodei's essay that he wrote two weeks ago, it goes to exactly this point. Those guardrails, those safety measures need to lead the development of the capability itself. So, security is at the heart of the conversation that we are having. But I come back to what I said earlier: I mean, engaging here is the way in which we as a nation do the most in terms of shaping this technology so that it benefits humanity. We need to be in there and leading, not running away and hiding. And so, you know, we are seeking to engage with these companies, engaging in investment in Australia and engagement in Australia is, is an important economic opportunity. It is critically important for our national security. But fundamentally, if there is a lesson to be drawn from this last week, what it also will give us is much more agency in terms of shaping the way this technology is developed and making sure that it's developed in a way that is safe for humans.

CLENNELL: President Xi and Trump had this meeting a couple of days back where President Xi, it seems, talked more about security and human control of AI than the US President did. Can we trust China on this, though?

MARLES: Well, it is good that America and China are speaking about this issue. Again, I'm not about to speculate on the way in which China is developing the technology, other than to say that China is developing the technology. I mean, the technology that we will ultimately use in Australia is the- in a government sense- is the technology that is being developed by American tech companies. And it really is critically important that that technology is developed in the context of guardrails and security measures. And that's very much our message, and it is the message of those tech companies themselves. And so we think it's actually the leading technology in the world. But because it's being developed in that way, it should ultimately be the safest technology in the world. But that requires a lot more work. And what we've seen in the last week highlights that. I mean, the last week, really- whilst the impact, as I said, was minor, the seriousness of it is that it is a very significant warning. And that warning needs to be heeded and heeded in a way which makes sure that the guardrails and safeguards are built around this technology.

CLENNELL: Are you alarmed that Donald Trump seems to be so casual about the security aspects of AI?

MARLES: Well, Donald Trump will speak for Donald Trump. What's clear is our government's position, which I've been articulating, about the need for safeguards and guardrails. And the Prime Minister, along with a range of other world leaders at the UN last week put out a public statement specifically in this regard. And, what we've seen in the last week is concerning, I mean, and what we saw specifically in terms of an unauthorised access by an OpenAI agent into an Australian government website is clearly unacceptable. There are parts of what, you know, what occurred last week that was unacceptable. But I do take comfort from the fact that during last week, we also saw those same tech CEOs speak to the UN about the need for there being guardrails and safeguards. I took comfort from Dario Amodei’s essay in terms of how they were seeking to build this technology at Anthropic. You know, it is utterly essential that these guardrails are there. This is a technology which can be transformationally positive for humanity, but it comes with danger. It definitely does.

CLENNELL: It'd be nice to have the US president on side, though, wouldn't it? It'd be nice if we were on the same page as the US president on this, or he was on the same page as us. Should I say.

MARLES: Again, I mean, Donald Trump can certainly speak for himself. These are the companies that are developing the technology and we know what they are publicly saying. And I take heart from their words, I take concern from what occurred last week, but I take heart from their words. And we now need to be engaging as a country to shape this as best we can.

CLENNELL: Let me talk about the fire sale of Defence assets or ask you about that. The New South Wales Premier, Chris Minns, seems to have changed his position on the sale of Victoria Barracks in Sydney. He said last week, I'm throwing my weight behind the diggers. I think they're right on this one. This is a piece of national heritage and it needs to be held by the Commonwealth Government- it needs to be preserved by the military. What's your reaction to his comments? And what if the New South Wales government puts this on the State Heritage Register as they're trying to do?

MARLES: Well, the site needs to be preserved, there's no doubt about that. That's not what's in question here. And actually, I think the site needs to be returned to Sydneysiders and Australians. I mean, people are conflating things here and getting them wrong, frankly. There's no possibility of any of these sites being impacted in terms of their heritage value. They are protected by law. And that is why, when you look at the overall value of the national, of all the 67 properties that are being disposed of, it's actually not a significant amount of money, as one might imagine, precisely because of the heritage overlays which exist over these properties.

CLENNELL: So, Chris Minns is wrong. Is he?

MARLES: Well, Victoria Barracks, Sydney should be returned to Sydneysiders and Australians. Sydneysiders have never been inside it- it is an incredible site. And Defence is obviously precisely the wrong organisation to manage this from a heritage point of view. I mean, just take a step back and think about this for one second. Every dollar that Defence spends on the heritage of the Victoria Barracks Sydney is in competition with a dollar that we would spend on defence capability, on making sure that we are giving our diggers the best protection possible to keep them safe- and that's my first priority, and giving them the best capability in order for them to defend Australia. And that is also the priority. It is not my priority for Defence to be a heritage organisation. It's not my priority to see Defence manage the oldest wine cellar in Australia. It's nice that it's a Victoria Barracks Sydney, but it's not core interest in terms of defending the country. And frankly, the idea that you would think that the Australian Defence Force is the entity which is best placed to manage the heritage value of this is plainly ridiculous. I mean, this is a site that should be returned to Sydneysiders. It needs people through it, like the Rocks. And that's the equivalency because it's of similar vintage to the Rocks. I mean the Rocks is an incredible iconic part of Sydney. Part of how its heritage value is maintained is that it's got people through it all the time, which generates the income to maintain the heritage value of the Rocks. There's no one- like the number of people at Victoria Barrack Sydney is minuscule. To be clear, Andrew, most members of the Australian army have never been to Victoria Barracks Sydney. So, to put this in the hands of the diggers is actually quite wrong. You know, there are a few former generals who liked hanging out there who were lamenting this. But in terms of diggers, in terms of the Privates and the like, the non-enlisted personnel in the Australian army, you know, they're in Townsville, they're in Darwin, they're in Brisbane- that's where our infantry brigades are. They're defending Australia. Victoria Barracks Sydney should be liberated for the people of Sydney and for the people of Australia. And in terms of heritage, it would enable us to celebrate the history of the Australian Army so much better if Australians had full access to it. We don't need it as a Defence Force, we don't need it as the Australian Army. And it is not that we are spending hundreds of thousands of dollars on maintaining this site. It is projected that over the next ten years we will be spending hundreds of millions of dollars on a site that we don't need. So, my focus is on defending the country and my focus is on keeping Australian diggers safe. And that requires capability and that requires money. And that is where my focus is, as it should be, as the Australian Defence Minister.

CLENNELL: Just finally, do you still want to be Prime Minister?

MARLES: I'm focused on being the Defence Minister. I'm focused on being Anthony Albanese’s Deputy. Anthony Albanese is doing a wonderful job as the Prime Minister of Australia and I think, you know, I'm very happy to be serving Anthony for as long as he seeks to be Prime Minister. 

CLENNELL: What if he retired as the Prime Minister? What if he retired?

MARLES: Oh, I really hope that Anthony continues in the job. Look, I feel incredibly grateful that, you know, at this part of my career I get to work with somebody like Anthony in this role. He is a fundamentally decent Australian who has an enormous amount of experience, who has great judgement, who is doing an incredible job as the Prime Minister of our country. And in my mind, may that long continue.

CLENNELL: So, your knapsack is bereft of a leadership baton?

MARLES: Well, I have only ever sought to be, you know, what I am and doing the roles that I'm doing and I seek to be Anthony's Deputy and his Defence Minister. And I think Anthony is doing a great job and I think our interest, as in Australian Labor's interest lies in Anthony continuing to do this job.

CLENNELL: Richard Marles, thank you so much for your time.

MARLES: Thanks, Andrew.