Interview with Annelise Nielsen, Sky News

ANNELISE NIELSEN, HOST: So, this is your first visit to the US since you became Defence Minister and Deputy Prime Minister.

DEPUTY PRIME MINISTER: Yep.

NIELSEN: The focus is obviously on AUKUS. What’s the progress there?

DEPUTY PRIME MINISTER: Well, we come here with whole lot of optimism about where the alliance is at, firstly, and specifically how AUKUS is progressing. We obviously want to make clear that from the new government’s point of view we see the alliance as completely central to our national security, to our world view. Our relationship with the United States is the single most important relationship that we have. So, this is a really important opportunity to make that clear. But in the here and now, AUKUS looms large in the agenda that we’ve got with the United States and particularly the process that is underway right now around narrowing down what submarine we actually do run with as the nuclear-powered submarine that we will eventually operate, and there’s a lot to talk with the US about that. As well as the other advanced capabilities that AUKUS seeks to develop, and in doing so building a much closer cooperation between the defence industrial bases of both countries. So, we feel pretty optimistic about all of those issues and about the conversations we’re going to have.

NIELSEN: I noticed in your speech that one of your missions this week was some asks of the US Government on sharing. What are you asking them to share?

DEPUTY PRIME MINISTER: Well, it’s really trying to make sure that export facilitation around defence industry technology happens in the most seamless way, perhaps the most expeditious way, possible. And obviously there is a significant amount of regulation, as there should be, which operates around this particular sector. But it’s really important that if we’re going to really take the opportunity of having much closer industrial bases between our two countries, if we’re going to make the most of that opportunity than we have to have a much more seamless and integrated pair of defence industries, and we really want to talk to the US about how we can do that.

NIELSEN: Where are we building these submarines? Are they going to be built in Australia?

DEPUTY PRIME MINISTER: Well, what’s really clear is that if we want to get the submarines as soon as we can, if we want to get those eight built, that it’s really important that we do develop a capability in Australia to build nuclear-powered submarines. In other words, we’ve got to make our contribution – really through AUKUS – to the totality of that industrial base between the three countries – Australia, the UK and the US. And so, it’s really important that we are walking down that path of building the industrial capability in Australia to build nuclear-powered submarines. And that’s a huge opportunity for Australia’s industrial base, particularly in South Australia, but it’s something that we really need to do.

NIELSEN: So that’s not a guarantee, though, that they’ll be built in Australia? You’re saying if the capability doesn’t hit where it needs to, we might have to build somewhere else –

DEPUTY PRIME MINISTER: I think inevitably we end up building nuclear submarines in Australia. That is the point that I’m trying to make. And it is actually developing that industrial base which will see us achieve this sooner.

NIELSEN: And so on that, it’s going to obviously take an increase in a percentage of GDP spending on defence. We’ve heard Albanese say – the Prime Minister – in the lead-up to the election that you were aiming for 2 per cent. Is that still the case? And how do we afford that in the current climate?

DEPUTY PRIME MINISTER: Well, there are challenges, and it’s right to point that out. I mean, we’ve come to power inheriting a trillion-dollar debt from the former Coalition Government. So, it’s right to observe that the federal budget going forward is under pressure because of that. But we’ve also made clear that defence spending is fundamentally important given the strategic circumstances, the complexity of those circumstances that we face right now, and we’ve committed to that spending being at 2 per cent, and we understand that walking down the path of developing nuclear-powered submarines is going to be an expensive endeavour. And answering the question of cost will be an important part of the announcements that we ultimately make around this in the early part of next year.

NIELSEN: What’s your target, then? Are you looking at 2.5 per cent? 3 per cent?

DEPUTY PRIME MINISTER: Look, I think it’s hard to answer the question in terms of those numbers. I think what matters here is that we are looking at the strategic circumstances that we face, and that we are building a Defence Force to meet those circumstances. That’s what happens in a rational process. And given the complexity of those strategic circumstances, I think inevitably we are going to see more capability rather than less.

NIELSEN: When we look at the current challenges in the Pacific. It’s an important moment with the Pacific Island Forum. The US has made a huge announcement there about increasing their diplomatic presence, reinstating the Peace Corps. How critical is that at this time, and is this going to antagonise China?

DEPUTY PRIME MINISTER: Look, I think it’s a really welcome announcement from the United States. It demonstrates their interest but more than that their willingness to back that interest up with real commitments and real engagement in the Pacific. And I’ve got to say as somebody who’s been interested in the Pacific for a long time it brings joy to my heart to see this announcement and what the US is doing here. And it’s really important that as the United States becomes engaged in the Pacific in this way that obviously we also step up. We certainly intend to. And you’ve seen a real focus from our government on the Pacific in the work that Penny Wong has been doing as Foreign Minister. It’s really important that we are working closely with the US, coordinating to make sure that we maximise their engagement and our own for the betterment of the people of the Pacific.

NIELSEN: Is China the biggest security threat to Australia?

DEPUTY PRIME MINISTER: Look, I think as China seeks to shape the world around it in a way that we’ve not seen before it does give rise to a number of challenges that we’ve not experienced in a long time. And it is a large part of why we say that we do face the most complex set of strategic circumstances that we have since the end of the Second World War. And that what means is that we’ve got to be a very clear eyed about what Australia’s national interest is, we’ve got to be very forthright in asserting that interest, and we’re doing all of that. We’ve got to be, as I say, very sober and professional and diplomatic in the way in which we speak with our international voice, and that’s the way in which you will see us go about our business.

ENDS.