Television Interview, Sky News First Edition

SUBJECTS: Australia-China relationship; Taiwan; AUKUS; Defence Strategic Review; Australia’s sovereignty; AUKUS.

PETER STEFANOVIC, HOST: Joining me here live now in Canberra is the Defence Minister Richard Marles. Minister, plenty to catch up on over the last few weeks and months. Now, as you know, China has cooled its rhetoric over that time, over those previous weeks and months. Then it sends a suspected spy balloon over the United States over‑sensitive military sites. Can you trust them? 

RICHARD MARLES, DEPUTY PRIME MINISTER: Well, firstly, I think it's a very curious incident with the balloon. I think America reacted to this in a very measured way. The important point I think we need to take from this is that the rules of the road globally matter; I mean the global rules-based order matters. And this was clearly in breach of America's air space. And that's the fundamental thing, whatever it was doing, it was in American air space, and it didn't have permission to be there. And I think the way in which America went about this was very measured.

STEFANOVIC: Yep. There is heated conversations now taking place, particularly from higher‑ranking members of the American establishment. The US Air Force General recently spoke of conflict over Taiwan by 2025. The CIA Director recently warned of an invasion by 2027. Is that likely? 

DEPUTY PRIME MINISTER: I think it doesn't help to speculate. I mean I would say the frontline of what we seek to do as a country is to deploy our diplomacy and to try and create peaceful pathways, and we have a sense of confidence that we can contribute to that. At the same time we definitely live in a world which is much more fragile, less secure than it's been in the past. We talk about the fact that we face the most complex set of strategic circumstances that we have since the end of the Second World War. And there's a truth in that. And it's on the basis of that that while we deploy our diplomacy, we want to create pathways for peace, in fact we want to have the most productive relationship with China that we can, and we've sought to stabilise that. We also need to be very prudent about our own posture and about our own defence, and that's why we're going through a lot of steps in respect of that as well.

STEFANOVIC: Sure. I know you don't want to speculate, but that doesn't mean it's not potentially a reality. It's not very far away.

DEPUTY PRIME MINISTER: Well, I mean we talk about the idea, as I said, that we face very complex strategic circumstances, and the world is much more fragile now than it has been for a long time. That is the reality of the world in which we are living. And we are seeing a great power contest.

Now, we want that to play out in a way which is peaceful, clearly. We need to be prudent about our own security, and you can look at what we are doing in terms of building our own defence. We are seeing an increase in our defence spend, that makes sense, because, you know, in a rational world, defence spending is a function of strategic threat and strategic complexity, and we're rational people.

STEFANOVIC: So with that said, and pardon the bluntness of this question, are we ready for war in this region? 

DEPUTY PRIME MINISTER: So there's a few answers to that question. Again, I don't want to speculate about war, but I think we do have a really capable Defence Force. Australians should have a sense of confidence about that. It's not a large military, but it's a highly capable military, and it can do very significant things, and we should feel very proud of that, and we've seen that as our military has been deployed over the last couple of decades.

We do need to be thinking about whether or not the Defence Force we have now is fit in terms of the strategic landscape that we face, and it is very different. There is much greater threat. And that's why we're doing the Defence Strategic Review. And we'll let the Review do its work, and I don't want to pre‑empt it, but I think what you will see coming out of that is much more of a sense that we must have the ability to project, to project power. We need to be able to hold any potential adversary at risk at a greater distance from our shores, and so impactful projection is what will be at the heart, I think, of what the ‑‑

STEFANOVIC: So when you say that, you know, holding someone at bay essentially, what sort of a timeframe are you working towards here? I mean, is it back to that question, 2025, 2027? Do we have that much time? 

DEPUTY PRIME MINISTER: Well, I think what's important is that we are acting as quickly as we can to get the posture that we need for our Defence Force, and yeah, we need to be thinking about that over the course of the next few years, that's important, but when you think about strategic thought, it's not just that. You know, there are long lead times in respect of a lot of what we do. So we are thinking about the next few years. We're thinking about the 2030s and the 2040s. We're thinking about what the world might look like over that period of time, and in a sense the right analysis is to look at the worst case scenario and make sure that we have a Defence Force that can maintain our way of life over that period of time, no matter what we ‑‑

STEFANOVIC: Sure. Okay. But you know, China's certainly getting ready for war, it seems to be on a war footing at the moment. You've got the US and Japan, they've got rotations of troops that are off Okinawa, getting closer to Taiwan now as a form of deterrence, perhaps a form of protection, if it comes to that, over Taiwan. So in that sense, do we need to be ready for combat or conflict by 2030? 

DEPUTY PRIME MINISTER: What we need to do is to make sure that we maximise our Defence Force posture so as to protect our interests; that's really what we need to be focussed on, and that's what we're doing. Australians should have a sense of confidence that the Defence Force they've got right now is a highly capable one. But we do need to be thinking about what kind of assets do we need going forward which are going to maintain our national interest, no matter what circumstances we face. And that is why we're thinking about ensuring that we have long‑range capable submarines, which in the future is going to require them to be nuclear‑powered. That's a huge leap in terms of our capability.

STEFANOVIC: We've got a hell of a capability gap until they come on board though? 

DEPUTY PRIME MINISTER: Well, we do face the fact that over, you know, the last decade there was dithering around what we do with the successor to the Collins‑class submarines, and we really had a lost decade there, which has created an issue in terms of how we deal with the capability after the Collins comes to its end of life. I mean Collins, when it was originally built, was expected to come out of service in the middle of this decade. With a lost decade under the former government, we couldn't have had that at a more difficult time in terms of the strategic circumstances we face, and that really goes to the point that you're making.

That said, I'm actually confident that what we will announce with the United States, with the United Kingdom in the coming weeks is going to address the questions of capability.

STEFANOVIC: Okay. So on that point then, the submarines, are they going to be British‑made submarines with American weapons? 

DEPUTY PRIME MINISTER: You'll have to wait and see, what we announce –

STEFANOVIC: Right I knew you were going to say that.

DEPUTY PRIME MINISTER: But I will say this: I think at the outset of this process, there was- you know, some were speculating that maybe what this would be is some kind of contest between the US and the UK for who would provide us with a nuclear‑powered submarine. In fact the way it has evolved it has genuinely been a collaborative effort between the UK and the US. When this is announced you are going to see a three‑way joint solution for Australia, and it is a massive step change in terms of our capability. It's really probably the biggest leap forward in terms of what we can do as a nation that we've ever had, and that's really important.

STEFANOVIC: Do you feel like the Defence Strategic Review needs to shock the Australian public into knowing how serious the threat is and what urgent things need to be done in that time? 

DEPUTY PRIME MINISTER: I think it is important that we are having a conversation with the Australian people, which makes it clear that we live in a world which is more fragile than we have for a very long period of time, and that what that is going to require is a defence posture, a Defence Force which is in truth going to cost more than it has in the past. We're going to need to increase our defence spending.

PETER STEFANOVIC: How much? 

DEPUTY PRIME MINISTER: Well, again, I'm not going to put a number on it.

PETER STEFANOVIC: Okay, it's at 2 per cent now GDP. How much further has it got to go? 

DEPUTY PRIME MINISTER: Well, it is at 2 per cent, and there's been a rise to get it to that point, but I think we are going to see that defence spend increase.

STEFANOVIC: 3 per cent?

DEPUTY PRIME MINISTER: Again I'm not going to speculate on that.

STEFANOVIC: The late Senator Jim Molan had suggested it should be up near 4 per cent. That's how serious the threat is on our doorstep.

DEPUTY PRIME MINISTER: And you know, we take what Jim Molan says seriously, and obviously, I think understand it was his last interview –

STEFANOVIC: He did with us, yeah.

DEPUTY PRIME MINISTER: And it's perhaps, you know, we miss Jim a lot is what I'd say. But look, we're going to see an increase in our defence spend, and to go to your original question, that does require a conversation with the Australian people. Not for a moment do we take any of this for granted. I mean there's a lot of money being spent on capability which needs to be explained to the Australian people, so it is important that we're having that conversation.

PETER STEFANOVIC: So do you think there will be surprises in store when the Defence Strategic Review comes out? I mean there's been leaks recently about sea mines, there's been announcements as welcoming up to this point.

DEPUTY PRIME MINISTER: Well, I do hope that what the Defence Strategic Review does do is get that conversation going, or, I mean it is happening, but to increase the tempo of that conversation. Yeah, I think people will see surprises inevitably, because this is a wholesale review of the posture that we need to take given the circumstances that we face, and when we announced the review we talked about the fact that this is really the biggest review of our defence posture since Paul Dibb his review back in 1985-86. So this is kind of a once‑in‑a‑generation assessment, and inevitably you're going to see big questions looked at, and there will be, you know, very important reading for people to have there. And I do hope that it begins the kind of conversation you're describing, because the Australian public need to be aware of what we need to do.

PETER STEFANOVIC: You've got a speech today on sovereignty. Does, do we – or do you forecast us losing any of that with our attachment to the UK, or our attachment to the United States going forward? 

DEPUTY PRIME MINISTER: No, I don't, but I think it is an important question to address. I understand the legitimate question that people would raise. It is like a huge piece of technology which is being provided to us by the United Kingdom and the US, and so I understand that people would ask the question, what are the terms on which that technology is being provided? 

The important point to make is this: the moment that there is an Australian flag on the future submarine, it will be completely under Australian control, completely. So we have total sovereignty over that asset. And in fact because the asset is much more capable than anything we've had before, I'd argue that that builds our sovereignty, because it increases what we can do, and the capacity of the Australian people, therefore, to be able to determine our own future. But it matters to give that assurance to the Australian people, and in part that's why I'm making this speech today on the eve of the submarine announcement.

It's not just about submarines. We talk about all the activities we do with the United States, and indeed all of our partners, particularly where that activity occurs in Australia. But maintaining our sovereignty in all of this is fundamentally important.

STEFANOVIC: Okay. Let me close with this question. You've been in the job for nearly a year now. You've travelled the world, you've spoken to a lot of world leaders, you've had access to a lot of intelligence. What worries you the most? 

DEPUTY PRIME MINISTER: It’s a good question. And I've been asked this question a lot since I've become the Minister for Defence. Look, I think that the shape of the world, as it's been revealed to me in the kinds of briefings that you've described, is not particularly different to what I imagined before I took the chair. But perhaps what has been the most impactful on me is, whereas I thought maybe the volume was at three or four, it's really kind of at nine or 10.

We – the world is fragile, and we really do face a pretty significant moment in our history. And it really matters that at this moment we are doing everything we can to, firstly make the right decisions, secondly to deploy our diplomacy to try and create pathways for peace, but also to make sure that we are ready. Ready to be able to make sure that whatever scenario we face as a nation in the future, we're able to protect Australians and protect Australian interests.

STEFANOVIC: Okay. Defence Minister, Richard Marles. As always, appreciate your time. Thanks for sharing your thoughts with us this morning.

DEPUTY PRIME MINISTER: Thanks, Peter.

STEFANOVIC: We'll see you again.

ENDS