Radio Interview, ABC Perth Mornings

SUBJECTS: OpenAI incident; Interest rates; Land Forces International Land Defence Exposition; SRF-West; Nuclear waste disposal; Defence Estate Audit; Immigration

NADIA MITSOPOULOS, HOST: Well, the Deputy PM, Richard Marles, is in town today. He’s found some time to drop by the studio. He’s also the Defence Minister and the Acting Home Affairs Minister. So there’s a lot to talk to him about this morning. Welcome back to Perth. Nice to see you. 

RICHARD MARLES, DEPUTY PRIME MINISTER: Great to be here, Nadia. 

MITSOPOULOS: Could we just first ask about AI. And if you put on your Acting Home Affairs Minister hat on, you’ve ordered the federal government departments to bolster cyber security defences after the OpenAI Medicare data breach. What do they actually have to do? 

MARLES: Well, actually this was work which started before that breach, which is to really look at all the IT systems that are across government, and a lot of them are older systems. To be fair, they’re protecting information which is not particularly sensitive. And I think this is a really important point that people need to understand, that, like in anything, we have some things that are more valuable than others and we put in place much greater protections around those things which have greater value. So, for example, when we look at what information was gained last week with that unauthorised access through the OpenAI artificial intelligence agent, it was pretty – it wasn’t very sensitive information. It was aggregate medical statistics. In fact, we’ve now made that information public anyway. If we were talking about something more sensitive, such as people’s personal data, you know, that sits in a much more secure environment and – 

MITSOPOULOS: But it could be. It could have been. Next time it could be more sensitive data. 

MARLES: Well, again, so this is the exercise that we’re doing now is to make sure that we have appropriate levels of security commensurate with what is being protected. But if we go to what occurred last week, I mean, the analogy that I’ve used is that the AI agent kind of climbed a fence which was around that information which wasn’t particularly sensitive. To continue that analogy, if we’re looking at people’s personal data, that sits inside a safe, and if you’re looking at, you know, our most significant national security information, I mean, that’s inside a fortress. So we have much greater protections, and that information, our most sensitive information – and I really want to reassure people on this point – is constantly under attention. There is constant efforts to probe it, and yet that security has been able to be maintained. So, actually, I have a pretty good sense of confidence about how our most sensitive information is being secured. And that includes people’s personal data. But there’s lots of other information around which is not as secure – not as sensitive, I should say, but which needs a level of security, and we’re just wanting to make sure that all of that is appropriate. 

MITSOPOULOS: So who does the audit and how long will it take? 

MARLES: Well, that’s – it will – it needs to be done quickly, but I’m not putting a time frame on it. I think last week was an important warning here. 

MITSOPOULOS: Do you know who’s doing it, though? Is it within government? 

MARLES: It’s within government, sorry. We are asking departments to do it themselves and to have a sense of where – what those systems are. So it’s internal to government. But we really need to be making sure that our house is in order here. And I think that is how we should see what occurred last week. Like, last week was a very serious incident in the sense of what occurred. I mean, this was an unintended, unauthorised access that was done by an artificial intelligence agent. Now, the actual information that was acquired was not at all sensitive, and so the impact is minor. But this is a serious incident. It’s a near miss in a sense, and we need to take it seriously and I think it is really important that this work is now being done. 

MITSOPOULOS: So then overnight we see Donald Trump hosted a meeting at the White House with AI bosses and said they’ve agreed to police themselves with a voluntary accord. I mean, that’s not good enough, is it? There must be more regulation than that? 

MARLES: I think how I’d answer that is our Prime Minister last week was in New York at the United Nations with a number of other leaders around the world calling for safeguards and guardrails in respect to the development of this technology. We are looking at that ourselves in terms of establishing AI standards here in Australia. It is really important that this technology – which offers so much opportunity for humanity – is developed in a manner which is safe. And that fundamentally means that the security and the guardrails outstrip or outpace the development of the capability itself. 

MITSOPOULOS: That’s the challenge. 

MARLES: That is the challenge. So that the capability can be managed as it becomes more capable. 

MITSOPOULOS: But this approach is disappointing, surely? 

MARLES: Well, we are very clear about where we stand on this. We need to be seeing guardrails put in place, and we need to see that this technology is developed in a safe way. And, actually, I mean, that’s the position of the Australian government. I do take some heart from the tech companies themselves who were last week as well speaking to the United Nations about the need to develop this very carefully and, indeed, the essay that we saw from Dario Amodei, the CEO of Anthropic, two or three weeks ago now goes to the same point. Those guardrails, those safety measures, they have to be in place and they have to be at a higher level of capability than the fundamental capability itself. 

MITSOPOULOS: Well, my guest this morning is the Deputy Prime Minister and the Defence Minister and the Acting Home Affairs Minister, Richard Marles. Let’s look at interest rates. Yesterday the fourth interest rate hike this year, and the RBA Governor, Michele Bullock, has warned that it could take a recession to get inflation under control. Is this inevitable? Is a recession inevitable? 

MARLES: Well, no. 

MITSOPOULOS: You don’t accept her comments then? 

MARLES: Well, I mean, we – the RBA Governor will make her own comments. And obviously they act independently of government. Obviously we continue to work to manage the economy in a way where we continue to grow. I think, you know, the first thing I want to acknowledge is Australians are doing it tough, and this is going to make things harder. And we’re very mindful of that. We are very focused on putting in place cost-of-living measures as a government, be that, you know, easier access to bulk billing in terms of health care or urgent care clinics or the tax cuts that we’ve put in place or making medicines cheaper. There’s a raft of other measures that we’ve put in place. We are very focused on the challenge that people have in respect of cost of living. But we very much understand that this is a difficult decision and, you know, we need to be working together, and Australians are doing a really good job in getting through what is a very challenging time. 

MITSOPOULOS: So you don’t think a recession is inevitable? 

MARLES: I don’t. And certainly from the government’s point of view, you know, we continue to work to see that we have a growing economy. And, you know, where we continue to grow jobs in that economy and we continue to help people with the challenges in respect of cost of living. What we are seeing is an inflationary environment which is around the world right now. Most advanced economies have seen interest rate rises over the course of the last month as that inflation is being experienced around the world. Ultimately, you know, it stems from what we’ve seen play out in the Middle East earlier in the year. And that continues to be unresolved. But all of that represents a significant challenge for people here at home, and we are very mindful about standing with Australians in this difficult time and providing a pathway through. 

MITSOPOULOS: You know, people are really struggling under your government’s watch. And today we’ll see inflation figures. They’re probably going to be released at 9.30. What do you want to see in those inflation figures that would warrant yesterday’s rate hike? 

MARLES: Well, again, the decisions of the Reserve Bank are for the Reserve Bank. We will see what comes out in terms of the inflation figures today. Again, I’d just make it clear that what we are seeing around the world is an inflationary environment and we’re not immune from that. We have lot product that exists in Australia that comes from overseas, so obviously what is happening around the world flows through into our economy.  I think the fundamental point is here, we get Australians are doing it tough and we are standing with Australians in terms of doing everything we can within our power to ease the pressure of the cost of living. This is going to make things tougher. And we’re not shirking from that. 

MITSOPOULOS: Well, I’ve got quite a few text messages, like this one, that says, “The government can do all it wants to help Australians with the cost of living, but they’ve got to stop spending so much money.” And the governor did say that domestic contributors are also causing this rise, including the use of AI but also weak productivity. Do you have to take some of the responsibility?

MARLES: Well, we certainly take responsibility.

MITSOPOULOS: For the spending? 

MARLES: In terms of spending, we are managing the budget in a prudent way. The budget is relative to what we inherited somewhat $200 billion less in debt as a result of the prudent measures we’ve taken in respect of spending since we’ve come to government. I mean, that alone saves tens of billions of dollars in interest payments to the budget bottom line.  So, I mean, when you look at what we have done in respect of managing the budget, we are way ahead of the trajectory that we inherited from the former Coalition government. I mean, the path that they had us on had us an a much greater degree of spending than what we’ve, in fact, engaged in. And so, you know, each and every day we are thinking about how to rein in spending and manage that. 

MITSOPOULOS: What about state governments? Because I’ve noticed – I’m going to get on to some defence issues next – but state governments, you know, quite a few commentators are saying today, well, they need to take some responsibility here with their big spending budgets on infrastructure, for instance. And that’s obviously creating huge demand in the construction sector. And we’ve had a very big spending government here in WA. Do you need to be saying to state governments, “Rein it in”? 

MARLES: Look, I mean, I think every government comes to this from the perspective of, you know, managing the challenges that they have within their own economy, and that will include putting in place infrastructure, and there are signature infrastructure demands that exist around the country, but doing so in a way where those budgets are managed in a prudent and fiscal way and in a way which is not, you know, contributing to inflation. And that’s the way in which we go about managing our own budget. And we’ve done that. As I say, we very much stand – put our record aside what we inherited over the 10 years previous. But what I mean by that is that the decisions in place which we’ve changed in a way which has meant that over the period that we’ve been in government we have been spending less and we have been saving money and, as a result, debt is much less than what was predicted. And we are saving money as a result. But there is still more work to do. I’m now talking about the federal budget. We are very mindful of that. And we continue to do that work. 

MITSOPOULOS: And mindful, I guess, that, you know, there’s probably Labor voters out there that are texting in very disappointed because they feel they are now worse off under your watch? 

MARLES: Well, we continue to stand side by side with Australians in what has been a very difficult environment, you know, around the world. And we are doing everything we can along with the way Australians are managing it themselves. I mean, we’d be the first to say that the people who are doing the heavy lifting are the Australian citizens themselves. But it is why we – the material impact that we can – I mean, we can affect this in terms of prudently managing the budget so we’re not contributing to inflation. We’re doing that. We can contribute to this by ensuring that where we are spending, we’re spending in ways which help people with the cost of living. And that’s why we’ve put in place income tax cuts for everyone. That’s why we are making medicines cheaper, as an example, why we’re making increasing bulk-billing rates so that people have access to health care, and we continue to take those steps. 

MITSOPOULOS: All right. Let’s look at a few defence issues. Now, you’re going to be back in Perth next week for the Land Forces Conference where weapons manufacturers basically showcase their arms. People do feel uncomfortable that Perth is becoming the centre of a weapons war and concerned that, you know, it’s putting a target on our back. 

MARLES: Well, we live in a very challenging global environment. And actually all of what we’re talking about is connected. We can see what’s played out in the conflict in the Middle East and how that flows into the global economy and how people are experiencing life. One of the things that comes from this from a defence point of view is that we need to be much more capable as a nation in terms of our Defence Force. And that’s what we – that’s why we are investing heavily in our Defence Force and why you do see the biggest peacetime increase in defence spending in our country’s history right now. But it is – like, in a rational world, defence spending is a function of strategic threat. We are in a very strategically complex world, which I think people can see. And we’re rational people, so that’s what we’re doing. In that context, you know, defence industry in Australia is really important in terms of supporting the Defence Force, and there’s huge opportunity, I might say, in relation to this as well. Here in Western Australia, defence industry represents really the biggest economic diversification of the Western Australian economy that we have seen in decades.

MITSOPOULOS: What could it be worth potentially for WA? 

MARLES: Well, perhaps the way to put that is that if you look at what we’re doing at HMAS Stirling in Rockingham, what we’re doing at the Henderson Defence Precinct, that’s just AUKUS alone. That right there will support in the next few years, 10,000 jobs in Perth across defence industry. These are high-tech jobs, high-skilled jobs, which will be enormously beneficial to the Western Australian economy. It’s a huge opportunity. What it does, though, is help build our nation’s capability. Now, I don’t think that makes us more of a target – to go back to your first question – I think it makes us less of a target. I think if we are able to build our own capability and put in place deterrents, that’s the best way we can act in order to keep all Australians, including Western Australians, safe. And people should see this Land Forces expo in that context. This is a really important defence industry event. You know, the event in Melbourne a couple of years ago had almost a thousand exhibitors, 25,000 people participated – 

MITSOPOULOS: And violent protests, too. 

MARLES: Well, there were protests, but small relative to what the convention and the expo was. But people just need to really bear in mind that this is about ensuring that Australia has capability, that we are building Australia’s sovereignty and that in the process we are keeping Australians safe. That’s what’s going on here. It is through building this capability that we seek to maintain peace. And it’s a very important point as people assess what’s going on. 

MITSOPOULOS: I’ll talk more about AUKUS in a moment, but back in May, Premier Roger Cook said his government was asking for expressions of interest for companies to build Defence Force manufacturing, potentially a hub, potentially in Collie, which is going to lose their coal mine soon. Is there any real interest? And besides weapons, what else could we build here? 

MARLES: Do you mean in terms of defence? 

MITSOPOULOS: Mmm-hmm. 

MARLES: So it’s difficult for me to speak to Collie specifically, but in terms of defence industry in Western Australia, actually, if you look at what’s going on in terms of the building of infrastructure at HMAS Stirling and at the Henderson Defence Precinct there’s a huge amount of work there in respect of construction. We will be seeing maintenance of our future submarines here and American and UK submarines when we establish the Submarine Rotation Force West at Stirling at the end of next year. All of that involves significant industry involvement in terms of maintaining really sophisticated equipment. Within the next five years, we will see commencement of the build of our new general-purpose frigate at the Henderson Defence Precinct, the Mogami-class vessel, again, massive jobs associated with that. So there are, you know, lots of jobs in all of that. But what you see is how that flows through into the supply chain within Perth. I mean, I visit lots of, I mean, small and medium companies, by which I mean companies that are employing, say, between, you know, kind of 20, 30, 40 people and a hundred people, that size of company, who are producing incredible technology which feeds into these bigger systems, or these bigger platforms. And, again, great opportunity for high-tech jobs in this state. 

MITSOPOULOS: With Submarine Rotation Force West, there seemed to be a bit of confusion about how long that arrangement will last. Is it just five years, as Pat Conroy alluded to? Or is it longer than that? 

MARLES: No, we’ve made this clear – this is intended to be an enduring rotation. So what we will see here is both US submarines and UK submarines rotating through HMAS Stirling, and that will be – we imagine that will be an enduring engagement. And it’s really important in terms of building our own skills and capabilities so that we can operate our own future submarines – the Virginia-class submarines that will bear Australian flags and, in time, the ones that we build in South Australia, which will be – which we’ll operate out of Western Australia. 

MITSOPOULOS: And have you worked out where the nuclear waste will go? 

MARLES: So, in terms of nuclear waste, there’s different levels of nuclear waste, and that’s a really important point to understand. Low-level nuclear waste, which is the kind of – which is really what’s being generated now – and think gloves, rags, the kind of thing that is actually generated in hospitals around Perth, and there would be low-level nuclear waste which is generated in those hospitals through nuclear medicine – that kind of material is being generated now. It’s being managed in an appropriate way, as it would be managed in hospitals around Perth. If we look at the high-level nuclear waste, which is really the nuclear reactors which will be in these submarines, that is obviously a much bigger issue in terms of dealing with that. We’ve made a commitment that we are dealing with that. But the important point to make here is we will not need to dispose of the first of those reactors until the early 2050s. 

MITSOPOULOS: Right. 

MARLES: So we’re a long way down the track. And we are – we’re starting the process of thinking about how we go to the determination of a site. We know that we’ve made it clear that wherever that happens it will be on a Defence-run site, either part of the current or future Defence estate. It clearly is going to need to be in a place that’s geologically stable, that is away from populations. But the point I’d make is we’ve got time to get that right, and we’re going to take that time. 

MITSOPOULOS: And now a lot of interest in the fact that you’re selling off Leeuwin and Irwin barracks here. So do you know how many expressions of interest you’ve received and what those properties will be worth? 

MARLES: So no and no is probably the short answer to that. 

MITSOPOULOS: The short answer, right. Any expressions of interest? 

MARLES: It’s a slower process than that. So if we wind it back a little bit, when we announced the Defence estate audit and the selling of I think it’s the 67 properties around Australia, the first step was for Defence to get out of them over the course of the next couple of years. And so we’re in the process of doing that. Those properties will then be transferred internally within government to the Department of Finance, and the responsibility for the disposal, the sale of those properties, will be in the hands of Finance. 

MARLES: Private developers will be itching to get to them. 

MARLES: Well, look, I wouldn’t speculate on that other than to say one thing, which is that the heritage overlays which exist in respect of all of these sites protect them by law. 

MITSOPOULOS: Yes. 

MARLES: So, in a sense, I’m not answering the question specifically about those two sites, but if I could do so in a way which aggregates this a little bit, across the 67 sites we are imagining that what that will return to the defence budget is only about $1.8 billion, across all of those sites. If you know what they all are, that feels like a small number. That is because of the heritage overlay which exists in respect of the sites. 

MITSOPOULOS: You have to protect those buildings. 

MARLES: They are protected by law, and they will be protected by law. And I think this is an issue which I, you know, really want to emphasise. Because I do get that people out there are maybe confused about that. None of these sites are going to be bulldozed. They are protected. In fact, I think what will happen with a lot of these heritage sites is that they will be opened up to the public much more and people will be able to enjoy them.  What we need to be – I mean, this whole exercise is making sure that our Defence estate is more fit for purpose for what Defence does. In respect of those two sites, what we are thinking mostly about is both reserves and cadets here until Perth and making sure that the outcome here, which will be different sites, are better sites, that it is ultimately a better outcome for our reservists and for our cadets. And a lot of the work that – a lot of the activity that is undertaken by cadets and reserves now – and this would include in respect of these two sites – are happening on old sites which are really not that fit-for-purpose for what they’re doing. We want to make this a much better experience for reservists and for cadets. And in that aspect, we’re very actually grateful to the West Australian branch of the RSL, who we’re working very closely with in respect of all of that. So there’s a bit of time to go here in terms of getting that solution. We want to make sure that we have a really good solution in place before any of those reserve units are moved. 

MITSOPOULOS: You’ve been really generous with your time. Thank you for that. Normally we’re rushed, and you’re not rushing us. Final question – because we are statewide – farmers, fruit pickers, tourist operators in regional areas, they’re struggling to get the skilled and unskilled workers they need because of your government’s go-slow approach to visa processing. It’s having serious impacts on their businesses. They’re not happy. Have you got this one wrong? 

MARLES: Well, we’re working with the – well, let me go back a step. Firstly, we have said in the budget that we will be bringing net overseas migration down. It was too high coming out of the pandemic and it was placing a lot of pressures on the economy generally in terms of making sure the infrastructure and services were keeping pace with the numbers of people that were coming to the country. And so managing that down has been an important step for us to take. Migration obviously plays a really important role within our economy, but it needs to be at a level which is commensurate with what services we have in place. So I want to make that point. But – 

MITSOPOULOS: But it’s hampering productivity right now. 

MARLES: Well, in respect of the specific that you ask, which is, you know, the agricultural sector and working holidaymakers being able to work on those farms, we are working closely with the National Farmers Federation right now where we’re talking about those in the agricultural sector who have particular needs and where we’ve got people coming in with particular skills that can meet those needs. We are trying to fast-track those visas so that we can get people out to those farmers. 

MITSOPOULOS: Like the grain growers who start their harvest next week? 

MARLES: Yes, and we’re very mindful of the harvest and getting those people the workers that they need. So the specific issue of agriculture and getting works out to them is one that we’re very alive to, and we’re working closely with the National Farmers Federation on speeding that up. 

MITSOPOULOS: All right. Great to have you in the studio. We got through a lot. Thank you so much. 

MARLES: Pleasure.

ENDS