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00:00We're getting indications that that could be an extension of the fragile truce by 60 days.
00:06Where are we with this Iran war?
00:08How optimistic are you that we're actually making progress?
00:11Well, obviously, we've been calling for a de-escalation in the conflict for some time.
00:17If we do see an extension of the truce, that would clearly be a positive step forward.
00:23So, you know, I take at face value what we are hearing, and that does sound positive.
00:27But I think it is really important that we are seeing a de-escalation and some stability being brought into
00:35this situation.
00:37Clearly, though, at the heart of it, we need to see the Strait of Hormuz be open.
00:42I mean, we need to see the global fuel supply chain return to normality.
00:48That's critically important for the world.
00:50It's particularly important for our region.
00:52What are the key lessons for Australia, for Asia, on the back of this Iran war?
00:58I think there are a few lessons, actually, that come out of it.
01:02Firstly, it really highlights how interconnected our world is.
01:07You know, we are seeing an event take place thousands of kilometres from here,
01:10which is having an impact on our part of the world, but in fact, the entire world.
01:15And, you know, we've known this for some time, but gone are the days where you can segment the world.
01:19We really literally live in a global village, and what's happening in Europe has an impact here and vice versa.
01:26And actually, I think that's why you're seeing an increasing number of European defence ministers attend Shangri-La,
01:32and why you get a whole lot of Indo-Pacific defence ministers attending, say, the Munich Security Conference.
01:38So there is a real interconnectedness.
01:41I think another critical point is just how significant sea lines of communication are.
01:47I mean, that's very important for Australia.
01:49I mean, for us, you know, most of our trade, the vast bulk of it goes by the sea.
01:56We're a country with an increasing proportion of our national prosperity based on trade.
02:01And we are seeing a sea line of communication being disrupted in the Strait of Hormuz,
02:07which is having an impact on petrol prices in Melbourne and Sydney.
02:13And it's a reminder, I think, for us, but I think for us Australia,
02:18but I think it's a reminder for the region just how important it is that the rules of the road
02:22at sea apply.
02:24The freedom of navigation, the UN Convention on the Law of the Sea,
02:27all of that is profoundly important to our collective prosperity,
02:32and with that, our collective peace and security.
02:35It's been so easy to shut the Strait of Hormuz, you know, just a couple of mines, cheap drones.
02:42Is that shaping the way you think about how you deploy your budget, your military budget?
02:47Well, there's a few things in that question.
02:49I mean, firstly, I think it does say, in terms specifically about sea lanes,
02:54that it's fragile and we can't take any of this for granted.
02:59And it is why we really need to, I feel, double down on the architecture of the global rules-based
03:05order
03:05and, in this instance, the UN Convention on the Law of the Sea.
03:08We are also seeing the nature of human conflict change, and we've seen that in Ukraine,
03:16we've seen that in the Middle East, particularly over the last few years,
03:19and particularly in respect of the growing place of autonomous systems and drone and counter-drone technology.
03:28From an Australian point of view, we have significantly increased our expenditure on those technologies.
03:35We see them as much more a central part of how we conceive of our defence force
03:41in a way that is totally different to how we would have imagined this 10 years ago.
03:46So it's reshaping our defence force, but I think it's reshaping defence forces around the world.
03:52And that is around the question of autonomous systems and drones,
03:56but also the economics of that, making sure that you have those cost-effective platforms operating
04:05and that you are dealing with the question of asymmetry.
04:10And it's got all of us thinking, and it really is reshaping human contests.
04:15When you take a look at your budget for 26 and 27,
04:18it does seem like a lot of allotment goes to platforms which will not be in service till the 2030s.
04:26How do you balance immediate risks and long-term planning?
04:31Good question.
04:32It's always a challenge.
04:34I mean, I think whilst there is a focus on these cheaper platforms,
04:42which can create asymmetry, we feel that it is also the case
04:47that those more exquisite large platforms still have a role.
04:52And so you need a defence force which can have both of those in play.
04:56If you are talking about really large, exquisite platforms,
05:00they do take years to build and develop.
05:02And so you have to be planning 10, 20 years in advance
05:06because that's simply the only way you can acquire those capabilities.
05:10And so it is a matter of balancing literally the present
05:14with what your future capability is.
05:16It is a question of balancing those cheaper systems
05:20which are able to be acquired more quickly
05:22with those more expensive, exquisite technologies.
05:27But I think getting that balance right is at the heart
05:29of how you construct the defence force which is trying to achieve what...
05:34which in our case is about having a defence force that can project,
05:38that can contribute to the collective peace and security
05:41of the region in which we live, which is very much in and around Southeast Asia.
05:45In nominal times, though, your defence budget for 26, 27 is shrinking.
05:50I don't accept that.
05:51No, we've...
05:53Well, in fact, in the financial year 25, 26,
05:56in the one year alone, we've increased our defence spending
05:59by $4.3 billion in one single year.
06:02That's the biggest defence acceleration of defence spending
06:07that we have seen in a single year in our country's history.
06:11And when you take a step back over the course of the next 10 years,
06:17we, in our most recent national defence strategy,
06:19increased our defence spending by $53 billion over that period of time.
06:23Since coming to government, the collective decisions that we've taken
06:26over the last four years actually has increased that spending
06:30by $117 billion relative to what we inherited
06:34when we came to office back in 2022.
06:36You know, that represents the biggest peacetime increase
06:39in Australia's defence spending in our nation's history.
06:42And, you know, right now,
06:44our defence spending is at around 2.8% of GDP.
06:48You know, that puts us ahead of most countries in European NATO.
06:52That would put us ahead of most countries in East Asia.
06:57So, you know, we are spending considerably on defence
07:00and we are very much ramping that up.
07:02Deputy Prime Minister Malz, I'm just wondering
07:04what role Australia sees itself playing in regional security?
07:09Because amid the Iran war and the attack on Venezuela,
07:12countries in this part of the world are reassessing
07:14the strategic alliances.
07:16What role do you see Australia playing?
07:18And I guess in the context of it being on closer towns to Japan,
07:22for instance?
07:24Well, it's a really good question again.
07:26And what I would say is it is impossible to conceive
07:29of the defence of Australia without thinking about
07:32the defence of South East Asia.
07:35And it's impossible to conceive of that
07:38without looking at the centrality of ASEAN.
07:40So, you know, for us, ASEAN's centrality
07:44goes to the very heart of defending Australia.
07:47Like, that's how we see it.
07:48We think that the defence of Australia
07:51is about Australia working with ASEAN
07:54to provide for the collective peace and security
07:56of this region of South East Asia.
07:58But we would say that also in respect of the North East Indian Ocean.
08:02We would say it in respect of the Pacific,
08:03in terms of the Pacific Island countries.
08:05And it does mean we're working much more closely
08:08with countries like Japan and Korea.
08:11And so we see that our defence lies in the collective security of this region.
08:19And that means that we need to have the capabilities to contribute to that.
08:24But we also need to build the relationships which allow that.
08:27And so, I mean, if you look at our defence relationship with Japan,
08:32but with countries like the Philippines, Indonesia, Singapore, Malaysia,
08:37really, you could go right through South East Asia.
08:40But also our defence relationship with a country like India.
08:43I mean, all of those are a high watermark.
08:44And we are working very, very closely with Papua New Guinea.
08:49We now are an alliance partner of Papua New Guinea.
08:52We are working very closely with our neighbouring countries
08:56to build those relationships
08:58because we see them fundamentally at the heart of our own national security.
09:02Are you looking to deepen your relationship with Japan?
09:05I mean, we're hearing talks that perhaps there could be a trilateral meeting,
09:08you know, involving Australia, Japan, as well as New Zealand.
09:13And we work really closely with Japan.
09:15And, I mean, the short answer is we have been deepening our relationship with Japan,
09:20not just here.
09:21How would you deepen it further?
09:23Well, we have in place a reciprocal access agreement
09:27which allows for us to operate from each other's bases.
09:30We're doing more exercises together.
09:33We are doing more cooperative activities in the region together.
09:36Clearly, defence industry has gone to the next level
09:39with us acquiring our next general-purpose frigate
09:43as the Megami-class vessel,
09:44which is produced by Mitsubishi Heavy Industry.
09:47So, be it defence industry,
09:48be it the way in which we're exercising the way we operate together,
09:52I mean, all of that is at a much deeper level than it has ever been.
09:56And that really, in the last four years,
09:59has gone forward dramatically.
10:02And there is actually a treaty-based architecture
10:05which underpins that as well.
10:07So, we see that relationship as profoundly important.
10:10But, again, I could run you through our relationship with the Philippines
10:14and there is a similar story
10:16of how we are doing more with the Philippines
10:19than we've ever done before.
10:20Indonesia, I mean, we signed the historic treaty of security
10:26with Indonesia in January.
10:29We have a defence cooperation agreement
10:31for the first time with Indonesia.
10:33I mean, we are doing more with Indonesia again
10:35than we've ever done.
10:36And it goes to what I said before.
10:40Our conception of our own national security
10:43and the defence of Australia
10:45lies in the relationships that we build with our neighbours.
10:49Paul Keating once famously said
10:52that we see our security not from Asia but in Asia,
10:54and we very much live that.
10:57We are about building those relationships as much as possible
11:00and we see our security deeply embedded
11:03in the relationships that we have in Asia.
11:05You talk about ramping up exercises.
11:07The US is ramping up exercises in this part of the world as well.
11:11In fact, doubling down on it.
11:13Is that enough to allay concerns
11:14about US commitment in this part of the world?
11:17Look, I think we should take a step back here
11:20in terms of the US commitment.
11:21The Indo-Pacific Command is the biggest combatant command
11:26in the United States Armed Forces.
11:29So right there is a massive commitment
11:31of personnel and material by the United States.
11:34But of course there's a lot of anxiety
11:35because of how the US has moved, you know,
11:39their assets from this part of the world
11:40to the Middle East.
11:41Well, I mean, there is an immediate issue there.
11:43But, I mean, if we take a step back
11:45and just look at how America postures itself around the world,
11:51the Indo-Pacific Command is the largest combatant command it has.
11:54If you look at the key strategic documents
11:56that it handed down at the end of last year,
11:58its national security strategy, its national defence strategy,
12:01both place a real emphasis on the importance of the Indo-Pacific
12:05to America's national interest.
12:08When we look at our own selves
12:10in terms of our relationship with America,
12:11we're seeing an increased presence
12:14of American military in Australia.
12:17And we welcome that.
12:18That's something which is very much to the advantage
12:20of both the United States and Australia.
12:22So, you know, we're pretty comfortable, actually,
12:24with the way in which America is engaging
12:26with this part of the world.
12:27We see it as profoundly important
12:29that America continues to engage with this part of the world.
12:32When we say that as an American ally,
12:34and in doing so, we would observe that our alliance
12:37with the United States is as important today
12:39from an Australian perspective as it has ever been.
12:42But there are alternative alliances in play as well, do you think?
12:45I mean, are countries in this part of the world
12:48reassessing where alliances are?
12:50Well, I...
12:51ASEAN countries say that they're coming together in a bigger way.
12:56Sorry, the way I would put it is,
12:58our alliance with the United States
13:00is as important as it's ever been.
13:02We live in a much more...
13:03Is it because there's no plan B to the U.S.?
13:05We live in a much more challenging world.
13:10I think it is the most complex strategic landscape
13:12that Australia has faced since the end of the Second World War.
13:16And in that moment, it is a time to double down with friends.
13:20And we do see, as a government, the importance of our region
13:23and to be building our relationships with the countries of the region,
13:27collectively in the sense of with the architecture of ASEAN,
13:31but also bilaterally with each of the countries,
13:35because we see it as utterly central to Australia's own security.
13:40Now, none of that is an alternative
13:43to our alliance with the United States,
13:44or that is, I think, complementary to our alliance with the United States,
13:48but it is profoundly important.
13:50And we are placing an enormous emphasis on building those relationships,
13:54and we have seen a whole range of those
13:56go from strength to strength in the last four years.
13:59Deputy Prime Minister Molls,
14:00are you meeting with Pete Hexer,
14:02the Secretary of War of the U.S.?
14:04Look, I try not to go through my itinerary...
14:08We've been told that you are.
14:09I'm just wondering, what message are you sending him?
14:11What are you interested in hearing from him?
14:13Look, when I speak with Pete Hexer,
14:16firstly, I've only ever had good meetings with Pete Hexer,
14:21and that's, as you would expect,
14:23given how close our two countries are.
14:25I mean, there's lots for us to work through
14:27in terms of all the equities that we have
14:29within our alliance relationship,
14:31but all of that is tracking pretty well.
14:34I mean, AUKUS continues to be a major initiative
14:38for both the United States and Australia
14:41are working on together, clearly with the United Kingdom as well.
14:44But that is all tracking well,
14:46but there's a lot to go through with that.
14:49As I said earlier,
14:50we are seeing a growing American footprint
14:52on the Australian continent,
14:53and all of that requires a lot of conversation to work through
14:57and to look at how we can do that as best as possible,
15:00but what other opportunities exist.
15:02So I'm looking forward, when the opportunities arise,
15:05to be able to have all of those conversations with Pete.
15:07Are there marquee projects that will be announced
15:09under AUKUS, do you think?
15:12Whatever is announced under AUKUS
15:14will be announced when we announce it.
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